Who Says Elephants Cant Dance - Essay Example

An Analysis of the Strategy Used By IBM to Raise and Achieve Business Success This book describes how IBM was turned from a dying company into a successful venture through efficient management and strong leadership by Louis Gerstner. In 1990, IBM registered its best profits ever. This changed in 1993 when the computer industry underwent a massive change and shift to the dot era of mini computers and personal computers. IBM was losing big due to the huge size of the machines they produced. The future of IT was seen to belong to small companies and it was suggested that IBM could only succeed by disintegrating the company to smaller separate units so that the shareholders’ interest would be protected.

Louis saw this weakness as an opportunity and demanded that the management work together to re-establish IBM as a provider who is centered at offering IT solutions to customers. Louis Gerstner changed the entire organization through use of a strong strategy that involved mainly changing the company’s culture. This was mainly through use of a well-established strategy that focused on culture, human resource and technology. This paper will focus on how human resource systems and technology were used to influence organization change and success.

The OD diagnostic Process will used to analyze these two aspects. This process focuses on inputs that include the business environment. The design components that assist in processing data are business culture and structure, technology and human resource systems to give output that improves performance and efficiency. Success of the strategy and the systems relied heavily execution which refers to carrying out the laid down core activities in a timely and efficient manner. Execution of the plan is closely monitored to ensure that deviations are detected in good time and corrected accordingly.

In execution, Louis focused on decision rights, structure, motivators and information. He focused on changing the structure and hierarchy to establish closer links and lines and ensure that the responsibility and accountability for actions were clearly outlined for management. He also defined the decision rights i.e. who makes what decisions and the number of people involved in the process. A clear definition of the authority to make decisions was also established. He redefined the incentives and objectives that motivate people to give their best efforts to the company’s goals.

In focusing on information, measures of performance, coordination of activities and ways of transferring knowledge were established (Gerstner 2003). There was a drastic change in the human resource systems. Louis made a move that made him very unpopular among the former IBM employees. He decided to carry out a right sizing exercise across the organization. This involves evaluating the levels of skills for various categories of employees. This exercise aimed to determine the relevance of those skills to the company.

Employees’ performance was evaluated too to determine their contribution to the success of the company. Following these two exercises, a large number of employees were laid off. The effect of this was a huge reduction in the company’s operating costs. The people who remained in the organization had the relevant skills required to steer the vision of the company forward. The organization also had to change management structure by laying off incompetent managers. Incompetence was based on performance and levels of skills possessed by the managers.

The leadership qualities were also evaluated to determine how the managers were able to influence employees to perform their duties well. These managers were replaced with other individuals who possess the right set of skills, leadership qualities and experience needed to manage human resource and the core business processes (Gerstner 2002). The structure was changed to a leaner one where the management possessed multiple skills and thus there was no need to have so many line managers. This facilitated decision making process, execution efficiency, and a stronger grip in responsibility and accountability amongst the managers.

A change in motivational factors enabled the employees to own the vision of the company better. Incentives that were more valuable to the employees were introduced. This included among others changing the dress code to a more informal one that was flexible for most employees. Employee promotions and training were based on merit and this motivated them to work harder to earn their positions in the company. Involvement of the employees in decision making made them feel valued. They were able to work harder to achieve the goals they had helped establish since they were meaningful to them.

A change of technology was also a huge strategic move that steered the company to success. The company shifted their vision to center on providing IT solutions to its customers. To achieve this, the company had to change its major products to suit customers’ needs. The industry in 1993 was changing towards the dot.com era of technology. This technology aimed to produce smaller machines that were suitable to individuals such as the personal computer. IBM at that time was a major producer of huge business machines such as mainframes and other centralized computing machines.

They changed these products to smaller ones as needed by their customers. This saw the company gaining its lost glory by changing their strategy, vision and products to address specific needs for their customers. Louis had little technical expertise in IT technologies. He employed experts in technology to achieve the vision of the organization. Market research was done on customer technological preferences. The experts with the help of the employees were able to produce the products that were technologically appropriate for their customers.

A major reason for right sizing in human resource was to ensure that the current employees had the right skills to match the technological requirements of the market. He worked with the people who had mastered technology to achieve the company’s objectives and goals. Another technological move was focused on producing machines that were affordable. This was to ensure that all customers could obtain an IBM machine. The aim was to make IBM the preferred choice for business machines. The technology used had user friendly features.

These features allowed for the user to interact freely with the machines. This set the machines as unique among competing brands in the market. A change of technology enabled IBM to stay ahead of competition by focusing on their customers. Work Cited Gerstner, Louis V., and Edward Herrmann. Who says elephants cant dance? Harper Audio, 2002. Print Gerstner, Louis V.:. “ Who says elephants cant dance?” leading a great enterprise through dramatic change. Harper Paperbacks (2003). Print