Lessons of the century: IBM’s Chief Executive discusses 100 years of successful business

By Tanya Gubbay
Friday 28 October 2011

The Chairman of the world’s largest IT and consulting services company shared his experiences and thoughts on the company’s success yesterday, as he delivered a speech in honour of IBM’s centennial hosted by Imperial College Business School.

Samuel J. Palmisano, Chairman of the Board, President and Chief Executive Officer of IBM, gave his talk to a packed lecture theatre of staff, students and visitors as part of the Business School’s Distinguished Guest Lecture series. IBM manufactures and sells computer hardware and software, as well as offering infrastructure, hosting and consulting services in areas ranging from mainframe computers to nanotechnology. Headquartered in New York, IBM operates in over 170 countries and employs around 426,000 people.

Mr. Palmisano looked back at lessons of the last 100 years and how we can work towards building a smarter, more secure and more sustainable planet.

He began by referring back to a speech given in 1962 by Tom Watson Jr., IBM’s then chairman and the son of its founder. "Tom was right – success is fleeting," Mr. Palmisano said. "Of the top 25 companies on the Fortune 500 at the time of Watson’s lecture, only six remained in 2010."

Mr. Palmisano contended that IBM’s continued success is a result of the company’s ability to change. "We started off making clocks, scales and, believe it or not, cheese slicers," he said, "but I would argue that the need for a foundation of belief and values is greater today than ever before – precisely because we are all moving to the future with such incredible speed."

He went on to describe IBM’s strategy as one that looks to move to "where value will be greatest – and profits will be highest." He added: "Of course, every great company holds unique beliefs, but translating those beliefs into action is what separates the company from all others, and that is what keeps those beliefs alive."

In the next part of the speech, he addressed the two challenges that will drive change in the future – technology and the rebalancing of economies. He discussed IBM’s Corporate Service Corps as one example of how the company is thinking globally. Modelled on America’s Peace Corps, the scheme links up diverse IBM teams from around the world and sends them to emerging markets around the world, such as Ghana, the Philippines, Turkey and Vietnam for a month. The teams work in the communities with non-governmental organisations and local leaders to help boost their economies and make their cities smarter. Mr. Palmisano said that the results had been very positive: "These targeted interventions are having a transformative impact, both on local communities and on the IBMers themselves. Most say it is one of the most meaningful experiences of their lives."

Summing up, Mr. Palmisano explained that a key factor in any company’s success is its values and that "to keep that front of mind, the CEO has to set the pace." Referring to his own working life, he said: "I come to work every day with the mindset that IBM will outlive me and with a determination that I and my colleagues will pass on a better IBM than the one we inherited. One thing that leading a company like IBM teaches you is not to see yourself as a ’captain of industry’ but as the temporary steward of a great enterprise."