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In today’s business world

In today’s business world, leadership style is normally monitored, evaluated and described by external customer’s satisfaction which is generated by front-line staff of any company. As Gerstner believes that satisfaction should be transferred from internal customers to external customers, he tried to develop IBM from inside at the first place by overseeing the company from different angels then make the decisions consequently. Hence, Gerstner by his visit across IBM branches, he delivered a clear message to all employees that change is happening soon and it started by that CEO is stepping in each regional and global office of IBM. Such visits make employees questioning the reasons behind that and sometimes prepare them to expect an event to happen which means their mindset is moving toward a change.
Changing culture can be described as a cold war since it divides the employees into groups of acceptors, neutrals and resistors. Culture change might lift up the company or force it to collapse depending on the leaders taking the initiative across the company and then cascade it among each group of individuals. Hence, IBM started to promote teamwork by rewarding scheme and initiated messages to all employees that competitors are outside IBM not within the company itself. The new philosophy of IBM is to reward for getting things done fast and with minimum effort. Such a culture will help the organization to direct the focus of the employees from being busy with the small things and instead be busy to get things done quickly. Gerstner’s leadership style seems to be difficult to accept but effective in result, as his top priority was to make IBM profitable which reflects high concern for production, he also paid high attention to people which was proved by the willingness to change and adopt new work environment culture.
Gerstner focused on putting employees first rather than treating them as machines for mass production and utilize their energy without concentrating on what outputs they are making. Generally, People are more in favor of leaders who treat human as tangible, vital and resourceful. Such a kind of mentality proves the deep application of the contingency theory which argued that leaders might practice two styles of leadership either task-oriented or people-oriented depending on which style fits better in which situations ; circumstances.
“An organization is nothing more than the collective capacity of its people to create value.” Gerstner commented. Placing people as the backbone of any organization will always work in favor for achieving the aims and targets in terms of revenues and profits along with the workforce stability. Whenever an employer values their employees then they are gaining the satisfactions of both internal and external customers. As said, a satisfied employee is a satisfied customer, which means that employees tend to attract customers whenever they feel valued and appreciated. Gerstner’s style of leadership tends to eliminate all resources that are consuming IBM time and money. These resources included inactive employees who are enjoying the comfort zone by staying non-productive with very less reliability or maybe non-reliable at all.
From integration & decentralization to the Worldwide Management Council (WMC), lots of changes happened in between which helped IBM to move forward faster than ever. For the sake of quality management and monitoring, Gerstner found that IBM should get together and form one single entity but with decentralized management having delegated authorities to take decisions regarding the regular operations of their units. Such a decision gives these units some space to make the suitable decisions knowing that they have a better understanding and a closer eye to the real situation of their units. Also, Gerstner had a vision to build the company form “outside in” by assigning his top 250 managers to meet customers across IBM’s network. The outcomes of these meetings resulted in pushing IBM forward by understanding the need and expectations of its customers and providing the best solutions to them as well the personal gain of the 250 managers being understood the value that they can add to their customers in return. In general, customers feel more respected and appreciated whenever the senior management of the company come across and have conversations with them in face-to-face basis. Aside of that, companies are more to be accepted by the customers when they work closely with them to accurately fulfill their needs up to the level of expectations of theirs. That can be obtained and sustained with the support of strong teams who are thirsty to achieve and perform at the maximum level so they can be part of the successful story of the company. So, Gerstner made the biggest change in IMB with respect to policies and systems. He eliminated the lifetime employment policy which initiated to higher the level of employee’s loyalty but Gerstner’s focus was on building the environment where employees feel motivated to come up with initiatives, ideas and thinks more than doing daily duties to get paid for that only. Now we have employees who wants to sustain their seats in IBM as the lifetime policy is gone with more than 100,000 laid off employees.
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• Q2: The examination of the initiatives adapted by IBM to build the leadership competencies.
Although that some academics argued that the most powerful influences are transferred through leaders to their followers, some others said the opposite. In IBM, Gerstner was eager to bring IBM together and stabilize the company by putting an end to the practices done by IBM employees which made the company lacking the motivational atmosphere for work. Therefore, and a part of the teamwork initiative of Gerstner, he decided to consolidate all 11 entities of IBM under one unified operating unit. So, the aim was to make IBMers start speaking the same language and be aligned all together which will help adopting the initiatives of Gerstner to re-distinguish IBM. “Digging down in the organization and finding great talent is a difficult thing to do”. Gerstner said. Therefore, around 300 top executives have been appointed to act as change agents to help IBM with the transformation program. Such a program works for the interest of the organization and the employees as well as it prepares the young talented employees to be ready to sit in the chairs of their coaches once they are retired. By implementing such a plan, the company shall be ready for the next change and equipped with the needed resources to fill the gaps in the executive positions. Those developed talents had the chance to be a part of IBM’s Advanced Leadership Series which allow them to access the classes of Global Development Center and Global Business Management. Accordingly, such practices allow the company to spread the thought of everyone have the chance to grow up in IBM in which employees feel motivated to do more as they know that their hard work and efforts are in position of appreciation of IBM. Having that said, we are again emphasizing the theories which proves that a satisfied employee is a satisfied customer. Hence, IBM was in a big move toward the culture change by developing leadership initiatives and programs which resulted in the program of NEXTGENS, the one meant to achieve the above discussed leadership initiative and to support the development of IBM at the same time.
On the other hand, IBM extended its leadership initiatives to its global network. IBM’s Executive Assistants Program focused on developing those Executive Assistants who served the top global executives. This initiative carried out by the Worldwide Management Council (WMC) to shed the lights on guiding the Executive Assistants in learnings to provide them with the right exposure to IBM’s business and challenges. Furthermore, the program focused on identifying the strongest people of IBM across its worldwide network and inject them with the appropriate exposure which will serve the company to build a strong network accordingly. IBM was building the leadership culture across its network where employees feel how important they became to their employers. In such cases, the results of an approach like that can be seen in the overall performance and productivity of the employees. In addition, it promotes the loyalty of the employees when they see how the company is involving its first line staff to be part of the corporate level and business challenges which proves the researches that say people are more loyal when they are more involved and vice versa.
As most academics deep-rooted that the development of competencies is linked to how much the company is investing in people to grow them up and equip them with the needed skills and knowledge so they can see themselves in advanced levels in the company in the next coming couple of years. “Productivity isn’t everything, but in the long run it is almost everything,”. In relation to the above-said statement, IBM needed to bring back the legacy of its financial position maintained over the past decades. So, Gerstner continued laying off and reducing the workforce along with a high focus on the application of performance driven culture at IBM with high priority to the results. All of the taken actions and initiative helped IBM to continue and grow steadily once again. Not only that, the changes that Gerstner started to implement in IBM did touch the executive level of the company where they all got aware of the impact of the overall performance on their bonuses not only their individual performance. The applications of this philosophy helped Gerstner to deliver the change which allowed employees to became aware about the effect of one’s low performance on the overall performance across the company. The moment people feel danger toward their income the more responsible and serious they become.
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• Q3: Discussion of the effectiveness of IBM’s Leadership Development Programs in the context of changing business environment.
IBM initiated one of the best-in-class leadership development program from within the company and across its network. The program focused on spreading the characters of its role-model leaders among its employees. Additionally, the same characters where used as a benchmark for the process of developing leadership skills for its graduate joiners. “The advantage of our competency-based approach is that it is so transparent. The competencies are based on the behaviors shown by our global role-model leaders. What this means is that from the moment someone joins IBM, they know exactly what is expected of them,” Jean Kerr, Manager, Leadership Development in the UK and member of IBM’s Global Leadership Development Organization who emphasized in the importance of having the right role-model to ease the application of the leadership programs.
Candidates are more open and motivated toward the employers who tend to place the right person for the right job. Hence, IBM leadership program identified a clear process for the new joiners who will spend their first two years in IBM going through training program regardless their degree. During that two years, candidates will be put in job rotation to fit them in the best role against their capabilities and competencies. Furthermore, and after completion of the first two years, candidates will spend another two years building and developing their expertise in the related field. As most employers lack the advantage of having a clear career path and development plan for their existing and new joiners, IBM succeeded to develop a complete set of employment package where employees – existing or new – know where they will go and what is expected from them toward the company. Such an advantage helps IBM to attract smart and extraordinary people in the market to join the company and be part of the success story which as well benefits IBM build the environment that everyone else is looking forward to achieve as a competitor or to join as a family member of IBM.
In the second stage of the leadership development program, potential candidates with the leadership skills will be engaged in the Leadership Foundation of IBM where they will be having a learning program and their leaders will be teaching and developing them closely. Such a tool seems to be very powerful as IBM believes. People tend to easily accept the instructions and feedback from their direct leaders and role-models. Hence, IBM believed that by initiating the foundation which plays the role of developing leadership skills for potential leaders, will help the company to build the culture of in-house coaching and empowerment. Accordingly, those who prove themselves to be genuine leaders will be taken to the next level of leadership program which is called Emerging Leaders. The name itself has the courage and excitement which will inspire the candidates to impulse the wheel forward as they will be deeply involved in different topics like leaders’ emotional intelligence and so on.
IBM’s leadership development program has been continuously evolving, the moment the candidates complete the Emerging Leaders program then they will be entitled to join the Basic Blue program. At this stage, candidates will have the first hands on the management level. The Basic Blue program focuses on intensive examination to strengthen the managerial skills of the candidates as it is considered to be the very first gateway to the actual management positions for the candidates. Kind of programs work successfully in developing and monitoring the next generation executives of IBM since it starts from scratch and goes through the crafting stage and ends up with the well-shaped executive who continue the journey of their ex-leaders in IBM.
IBM new leadership approach have accidentally applied the Contingency Theory where the leader was able to identify the situation and then select the most appropriate style to manage that situation and overcome obstacles and achieve the goals set to lift up the company and bring it back on track. On the other side, the subordinates in IBM were highly skilled since the company was performing very well for decades and only just few years before Gerstner joining, the company was suffering huge losses. So, it was easier for the new CEO to immediately implement the approach of leading by example where new leaders appointed to discover the potential future leaders of IBM and engage them in the leadership program accordingly. The combination of the two elements, the right leader and the willing to achieve subordinates, helped IBM to quickly bring in the leadership initiatives and programs that allowed the employees to truly see the change coming on the horizon.
The general rule of thumb, it cost time and effort to develop certain skills or change a behavior of a person. IBM have invested a quite big amount of time and money to accomplish the target they set for the company. Hence, the plan that was set by IBM to build the leadership competencies is one of the most powerful plans in which lots of big organizations are following nowadays. IBM followed different approaches in developing people. Instead of sending their developed managers to the emerging markets, IBM sent its emerging managers to the developed markets in order to allow them getting hand-on experience in matured economies. Such a practice supported the leadership approach of IBM by having those emerging managers prepared for the future in terms of widening their view to discover the opportunities within their markets.
In summary, Gerstner believed that IBM should do the opposite of what people believe in, and what became a belief among the employees due to the repetitive practices – wrong or right – which built the culture of the IBMers over the course of the 30 years. Hence, and as Gerstner commented, the corporate culture of IBM was not a part of the game, it was actually the game itself. Therefore, all of his plans changed the focus from trying to achieve financial figures into achieving the environment and suitable corporate culture which will generate money at the long-run of the company and Gerstner achieved that with the assistance of all IBMers who really wanted their company to be back at the top of the best financially performing companies.

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