It’s already clear that a networked world raises many issues, such as the confidentiality of medical or financial records, or the freedom of expression v. protections of personal privacy. Think about the privacy implications of what’s coming. What happens to personal privacy in a world of Internet-enabled cars that monitor our move-ments at all times; cell phones that continuously report their location; or Net-connected pacemakers and other medical devices that are gathering real-time data on our heartbeat or blood pressure, choles-terol level or blood-alcohol content? Who’s going to have access to that most personal profile of you—your physician alone? Law enforcement agencies? An insurance provider? Your employer or a potential employer?
Earlier I mentioned the very real chasm that exists between the information haves and have-nots, and I expressed my hope that we might actually apply ourselves and these technologies to bridge that digital divide. As we do that work, however, I wonder if we’re not in the process of creating a new, potentially unbridgeable genetic divide, where some people can afford the cost of preventing a birth defect or avoiding prolonged suffering, and some can’t.
When advances in diagnosis and treatment converge to deliver on the promise of a longer, healthier life, have we merely created the priceless luxury of more time for the people and things we love?
Or is there more to the equation? When that’s possible—or well before it’s
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possible—shouldn’t we be thinking about the effect on social structures, the medical establishment, pension systems, and the environmental implications of having to produce more food and create more shelter?
Finally, after the events of September 11, 2001, we’ve all been forced to think about the greatest threats to our way of life, wherever we live in the world. Is it traditional military aggression? A rogue or state-sponsored terrorist attack? The danger of internal attack from a disenfranchised fringe element? There’s no longer any need to say a lot about state-sponsored terrorism. We all view the world through a different lens now. One by-product of this new world view is a basic rethinking of the nature of the threats we face—in all their forms.
Even after September 11 law enforcement and security agencies remained convinced that the greatest threat to people and societies was still posed not by weapons of mass destruction but by broad-based information warfare and what they call weapons of mass effect.
No one equates the loss of human life with the loss of some computer equipment. At issue is the ability of cyber terrorists to cripple increasingly IT-intensive military infrastructures, national power grids, water supplies, or telecommunications systems.
The Leadership Challenge
This book has made the point repeatedly that leaders in both commercial endeavors and the public sector face a closely related set of strategic decisions about their exploitation of these technologies, their willingness to break with the status quo, their investment policies, and the readiness of their own leadership teams to embrace new ways of thinking and working.
That’s front and center. Those choices are being made today. To-morrow the agenda is going to shift to a set of considerations that
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revolve around what this networked world means for our existing geopolitical structures and all their underlying economic assumptions.
A networked world doesn’t respect the fact that we’ve organized the world into nation-states and have adapted nearly every convention of life and society to that model. The course and development of a networked world is not governed by our concepts of national borders, regional alliances, or political structure. It’s already dissolving many of the barriers that have historically separated peoples, nations, and cultures. And I believe it will drive a concomitant set of challenges to the ability of political institutions to control the most important thing they have always controlled—their citizens’ access to information, education, and knowledge. In the process, we may see a shift in the way democracies behave.
How will governments arrive at workable policy frameworks in this globally, politically, and culturally connected world? On the issue of personal privacy, the European Union has a policy framework that’s different from that of the United States, and both are markedly different from the Chinese approach.
Now take a step down from that level of global governance, to the way any individual anywhere in the world might express his or her political preferences. Not that long ago the thought of buying a book from your home or the office would have been considered revolutionary. So what happens if there comes a day when we can vote from the comfort of our den or the convenience of our workplace? Set aside what this might do to boost citizen participation in a representative form of government. Why not envision global ref-erenda that are representative of a global populace voting without regard for political affiliations or national allegiances. What might it mean for individual governments when a world community expresses an opinion on issues like global warming or an agreement like GATT (General Agreement on Tariffs and Trade)?
I think that very soon, if we’re not there already, there’s going to
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be increasing conflict between what we would define as national interests and global interests. So we’re going to be in a situation in which reaching agreement will require a new level of international cooperation and global public policy. But how?
Once again, our institutions are running well behind the rate of technological advancement. Some universities are starting to build e-business into their business management curricula. But what about political sciences, ethics, or the law schools? The United States Congress is one of the most powerful law-making bodies on the planet. To its credit there are a few committees and a handful of task forces examining issues like cyber-security, export controls, and intellectual property rights. But, for the most part, there’s a fundamental lack of understanding about what it’s going to take to build a workable policy framework for things like an appropriate tax regime for e-commerce.
In the second half of the twentieth century, the nations of the world came together to create multilateral institutions designed to foster economic growth, raise living standards, and forestall armed conflict. The United Nations, the Organization for Economic Cooperation and Development (OECD), the International Monetary Fund, and the World Bank are examples. I addressed the OECD in 1998.
Much of my talk focused on the following questions: What is the global parallel of those organizations for the challenges of the Information Age? What global institutions do we need to create in order to play a similar stabilizing and enabling role in the twenty-first century?
All this leads me to consider whether we’re looking at the requirement for what we might view as a new kind of leadership competency. It won’t render obsolete the traits of successful leaders in the physical world. The Net is going to change many things, but not everything. Passion, confidence, and intelligence will always matter.
As I’ve already noted in the discussion of the current crisis on confidence in business in general, integrity will matter more than ever before.
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Yet I think it’s typically the case that people who aren’t forced to deal with the technology rarely make the effort to understand either its possibilities or its limitations. In the nuclear era, maybe that was all right. But for technologies as pervasive as the ones we’re dealing with today, I believe we’re going to need leaders in government, business, and policy-making roles who commit themselves to the challenge of lifelong learning in order to bring society into sync with the science.
This next generation of leaders—in both the public and private sectors—will have to expand its thinking around a set of economic, political, and social considerations. These leaders will be:
• Much more able to deal with the relentless, discontinuous change that this technology is creating.
• Much more global in outlook and practice.
• Much more able to strike an appropriate balance between the instinct for cultural preservation and the promise of regional or global cooperation.
• Much more able to embrace the fact that the world is moving to a model in which the “default” in every endeavor will be openness and integration, not isolation.
As someone who’s just spent a decade inside the high-tech industry, I can say with confidence that its technologies are magnificent creations. But never believe that the technologies themselves come to us as self-contained answers. They are not mystical solutions to the most difficult and most important problems—like bias, poverty, intolerance, and fear—that have been with peoples and societies for all time. Those problems yield only to the most intensely human solutions—the kind that are devised by people of free will and self-determination, who possess the ability to choose and to decide, to think and to reason, and to apply the tools at their disposal to generate the greatest benefits, for the greatest number of people.
Appendix B
Financial overview of the IBM Transformation The charts in this Appendix summarize IBM’s operational and financial performance for the years 1992-2001.
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International Business Machines Corporation and Subsidiary Companies
Revenue ($ billions)
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International Business Machines Corporation and Subsidiary Companies
Net Income ($ in billions)
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International Business Machines Corporation and Subsidiary Companies
Earnings per Share-Diluted
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International Business Machines Corporation and subsidiary Companies
Cash Flow from Operations ($ in billions)
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International Business Machines Corporation and Subsidiary Companies
Return on Stockholders’ Equity
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International Business Machines Corporation and Subsidiary Companies
Employees
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International Business Machines Corporation and Subsidiary Companies
Stock Price
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International Business Machines Corporation and Subsidiary Companies
Revenue ($ in billions)
Index
account control
accountability
administrative assistants
Advantis
advertising:
agency consolidation
brand revival
Charlie Chaplin commercials
e-business campaign
Ogilvy & Mather
“Solutions for a Small Planet,”
Advertising Age
Akers, John
Amdahl
American Express:
acquisitions by
compensation in
customer service in
Gerstner’s exit
Gerstner’s experience
Harvard Business School cases on
Travel Related Services
American Express Card
annual report
antitrust scrutiny
AOL Time Warner
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application software
Associated Press
AT&T
autonomic computing
Barbarians at the Gate (Burroughs and Helyar) Barron’s
Basic Beliefs
Black, Cathie
Bossidy, Larry
Bouchard, Tom, foreword
BUNCH
Burdick, Walt
Burke, Jim
Burroughs, as competitor
Burroughs, Bryan
Business Week
California Public Employees’ Retirement System (CalPERS) Carnegie, Andrew
Carroll, Paul
cash flow:
importance of
centralization VS. decentralization
CEOs (Chief Executive Officers):
leadership
qualities
visibility
CEO (Chief Financial Officer), search for
Chenault, Ken
chip lithography
CIOs (Chief Information Officers)
Cisco
Citibank
client/server
Clinton, Bill
CMOS technology
Coca-Cola
WHO SAYS ELEPHANTS CAN’T DANCE? / 289
Comdex trade show, Las Vegas
community service
Compaq Computer
compensation
benefits
bonuses
differentiation in
of IBM executives
incentive programs
performance-based
stock ownership
variable pay
Computer Associates
Computer Wars (Morris and Ferguson) Congress, U.S.
connectivity
contention system
Control Data
convergence
corporate culture
bureaucratic
changing
codification of
community service in
performance-based
Corporate Executive Committee (CEC)
Corporate Management Board
corporate marketing
corporate officerships
Cummins, Isabelle
Customer Forum, Chantilly, Va.
customers:
IBM focus on
integrating solutions for
quality ratings by
satisfaction of
cyber terrorism
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Czarnecki, Gerry
DaimlerChrysler
Data General
“Dear Colleague” memos
decentralization VS. centralization
Deep Blue
Dell
deregulation
digital divide
Digital Equipment Corporation (DEC)
Dinah Shore Golf Tournament
Disney Company
divestitures
Domino Web Server
Donofrio, Nick, foreword
Dormann, Juergen
dot-com mania
DRAMs
dress code
Eastman Kodak
e-business
ad campaign
coining of term
future direction
IBM as agenda setter in
information infrastructure of
Economist, The
Ellison, Larry
EMC
EMEA (Europe, Middle East, and Africa)
employee communications
entrepreneurship
European Union
excellence
execution:
accountability for
WHO SAYS ELEPHANTS CAN’T DANCE? / 291
clarity in
in high-performance culture
and IBM’s turnaround
and inspection
leadership in
of shared activities
translation of strategies into
Executive Committee
executives:
compensation
evaluation
leadership qualities of
leading by example
Exley, Chuck
Father, Son, and Co. (Watson)
Federal Systems Company
Ferguson, Charles
Financial Times
First Data Resources
Fisher, George
focus
on acquisitions
allocating resources in
on competitive analysis
on core business
on strategies VS. vision
foils
Ford, Henry
FORTRAN
Fortune
Fujitsu computers
Gates, Bill
GATT (General Agreement on Tariffs and Trade) General Electric (GE)
General Motors (GM)
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genome mapping
Gerstner, Dick
Gerstner, Louis V., Jr.:
birth and family background
challenges
decision to join IBM
early career
employment contract with IBM
first days at IBM
lessons learned, see also observations management philosophy
as outsider
reflections on first year at IBM
retirement
strategy of, see strategy
Global Network
Global Services
globalization
go-to-market model
grid computing
Grove, Andy
Hammer, Michael
Harvard Business School
Heidrick & Struggles International, Inc.
Helyar, John
Hewlett Packard (HP)
high-bandwidth networks
Hitach:
competition from
hard-disk-drive business divested to
Home Depot, The
Honeywell, as competitor
IBM:
acquisitions
as American icon
antitrust scrutiny
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brand
breakup
bureaucracy
cash position
changing economic model
community service
as counterintuitive corporation
culture of, see corporate culture
customer focus
decline
as global institution
go-to-market model
history
image, see also media
as industry leader
media stories
morale
operational and financial performance (1992-2001) right-sizing
strategy of, see strategy
survival
IBM Board of Directors
IBM principles
IBMers:
CEO’s communication with
compensation of, see compensation
culture of, see corporate culture
increases in workforce
layoffs of
morale
information superhighway
Who Says Elephants Can't Dance?: Leading a Great Enterprise through Dramatic Change Page 26