Who Says Elephants Can't Dance? Inside IBM's Historic Turnaround

In 1990, IBM had its most profitable year ever. By 1993, the company was on a watch list for extinction -- victimized by its own lumbering size, an insular corporate culture, and the PC era IBM had itself helped invent.

Enter Lou Gerstner. The presumption was that Gerstner had joined IBM to preside over its continued dissolution into a confederation of autonomous business units -- effectively eliminating the corporation that had invented many of the industry's most important technologies. Instead, Gerstner took hold of the company, making the bold decision to keep it together, defiantly announcing, "The last thing IBM needs right now is a vision."

Told in Lou Gerstner's own words, this is a story of an extraordinary turnaround, a case study in managing a crisis, and a thoughtful reflection on the computer industry and the principles of leadership. Summing up his historic business achievement, Gerstner recounts high-level meetings, explains the no-turning-back decisions that had to be made, and offers his hard-won conclusions about the essence of what makes a great company run.

Read by Edward Herrmann

As a former IBM executive who took early retirement twenty years ago, just as the company's bureaucracy was beginning to strangle the organization, I was fascinated to learn how that bureaucracy spread and the extremes to which it went, creating a culture thst led to decisions (if any) by committee, conspiratorial compromise, and self-protective behavior. This is not the IBM I had known. Even more interesting is the rapidity with which Louis Gerstner diagnosed the sickness of the company and the speed and persistence with which he administered tough medicine.

Despite IBM's near-terminal condition Gerstner saw it correctly not only as a business enterprise but as a "national treasure" that was well worth the collossal efforts needed to restore it.

Unlike Jack Welch's adolescent "Jack: Straight from the Gut", this book focuses on the processes of leadership and management, strategic choice, and the decision process. But it speaks also to the essential importance of corporate culture, at IBM a way of life that is based on values rather than just on being first.

As a recovering IBMer I salute Mr. Gerstner for his remarkable achievements and as a reader applaud him for this exceptional contribution to the business book genre.

Don't miss it.


Must reading for IT professionals and business strategists   November 14, 2002
27 out of 36 found this review helpful

Lou Gerstner has succeeded in writing a book which both provides valuable insights into the computer industry and the situation and success of IBM, as well as providing a roadmap for leaders seeking to effect strategic change in any industry. He reveals that IBM was close to running out of cash in 1993 before he stepped in and kicked out the investment bankers (later pilloried as greedy suppliers of the "hooch for all of the wild speculative periods in our economic history") who were preparing to sell of IBM, a national treasure, in pieces.

The book is easy to read, non-technical, and laced with interesting anecdotes.

Turning around IBM was one of the greatest business achievements of our time. I have worked much of my career in companies that competed against IBM and have known many ex-IBMers. All continue to have great respect for the people and the organization. There is no question that IBM had, and has, some of the best people in the world. Yet, they became unable to execute appropriate strategies quickly, losing much of their market share in the process.

Lou Gerstner rejuvenated the company, a task which is rarely permanently successful in the high technology world. Today, IBM still sells mainframes (much less expensive now, but an extension of the basic architecture introduced in 1964). And, that technology is still at the center of the IT organizations of many of our largest companies. Introduced later, but now long gone, are the Digital VAX, the Intel 8080, the Zilog Z80 and various computer architectures from the likes of Prime, Wang, Data General, etc. Most have been replaced by Unix or Windows.

We have Lou Gerstner to thank for saving IBM. As the book describes, he did it by focusing on the customer, eliminating useless bureaucratic processes, and, as a non-engineer, understanding the business implications of technology change better than most within IBM. But, it was execution, focus on cash flow and profits over revenues, and constant attention to detail in strategic planning and monitoring, together with communications and leadership which saved the day for IBM.

The title is interesting. Elizabeth Moss Kanter, a Harvard Business School Professor, wrote Teaching Elephants to Dance in 1989. Gerstner refers to some of her other works late in the book, but not this one, which appears to have provided the inspiration for the title of his book.


'Lessons Learned' Chapters are Very Strong   December 3, 2002
19 out of 27 found this review helpful

One caveat: Lots of these reviews are really reviews of "do I like Lou Gerstner?" and not the ideas he offers in his book. My review is about the book and whether its arguments are useful to business people. On that basis alone, I rate it highly.

I thought his chapters on lessons learned are quite good, especially where he distinguishes between vision and strategy. In my opinion, he offers a lot of great insight on this in a small amount of text.

I couldn't get a clear picture of whether people were treated with dignity in the downsizings. On one hand, I've heard some pretty cold stuff outside of Lou's book. On the other hand, I worked at IBM in the late '80s as an intern and the culture was DEEPLY complacent and isolated from the real world. I suspect that the reality is somewhere in-between but the "numbers guys" argue one extreme while the people who paid the price argue just as forcefully the opposite extreme.

I also think his chapters on being willing to challenge the conventional wisdom were valuable. I remember when Gerstner went to IBM and the conventional wisdom really WAS that Gerstner should become a high-tech hipster who could talk client/server acronyms, should 'harvest' the 390 business, and break the company into a bunch of 'baby blues.' I think it underestimates his (and clearly IBM's) accomplishments to not acknowledge it took serious decision clarity and courage to go against that conventional wisdom at the time -- especially given the financial pressures on the firm.

So the bottom line is I think the book offers good insight for how to think clearly about your business, what your franchise really is, what your opportunities really are, and how to make clear decisions based on trusting a clear thought process that filters out lots of background noise.


What Life at the Top is Really Like--As Told By a Superb Leader   August 15, 2007
Bill Lampton, Ph.D. (Gainesville, GA United States)
1 out of 1 found this review helpful

Having spent twenty-three years in management before I became an entrepreneur, I recognize that moving from one side of the desk to the other side may be the longest journey a professional person ever makes. When we shift into a leadership spot, not only do we find that our prior perceptions might have been totally inaccurate, we have to address personal and professional challenges we would have never imagined.

I applaud this book as one man's record of what life at the top is really like. He won me over immediately when he decided to wear a blue shirt because everyone else was wearing white. Thoreau would have applauded his individualism.

With my current profession dedicated to improving individual and corporate communication, I agree with Gerstner's assertion that "No institutional transformation takes place, I believe, without a multi-year commitment by the CEO to put himself or herself constantly in front of employees and speak in plain, simple, compelling language that drives conviction and action throughout the organization."

Another striking bit of Gerstner wisdom: "Success in a company comes foremost from success with the customer, nothing else."

He's right on target again when he observes that "lack of focus is the most common cause of corporate mediocrity."

Yet Gerstner goes beyond mere platitudes: "Execution--getting the task done, making it happen--is the most unappreciated skill of an effective business leader."

Possibly two of Gerstner's words capsule his approach to awakening IBM to its possibilities: "constructive impatience."

In my judgment, Louis Gerstner should rank alongside Jack Welch as a take-no-prisoners leader. Read this book, and you will agree that he was the right man at the right time for IBM.The Complete Communicator: Change Your Communication-change Your Life!


A CEO's Account of an "Historic Turnaround"   February 26, 2003
Robert Morris (Dallas, Texas)
4 out of 6 found this review helpful

At the outset, it is important to understand that this volume is not an autobiography; rather, in response to apparently substantial curiosity, Gerstner offers his explanation of how he and his associates achieved what he calls "IBM's historic turnaround." In process, he also explains how and why he became CEO, what his initial assumptions about the company were, to what extent they proved wrong (and why), and finally, what he had learned by the time he resigned as CEO after guiding IBM from April 1993 until March 2002. Having carefully observed Gerstner during the infrequent interviews to which he reluctantly agreed, the book seems to have been written by him without assistance except stenographic. The style and tone as well as the observations are clearly his. This is important. More often than not, a book bearing the name of a CEO as its author has been rigorously edited and thoroughly sanitized by one or more "manuscript doctors" before publication. Not so with this one.

Its title was perhaps suggested by that of a book written by Rosabeth Moss Kanter (When Giants Learn to Dance, 1989) and implies that it may be unlikely but is nonetheless possible for an organization as large and as cumbersome as IBM once was to become "quick on its feet" again. Soon after becoming CEO, Gerstner realized that IBM's culture -- not its core strategies -- prevented it from being able to "dance." As Gerstner observes, "[IBM's] decades-long run of uninterrupted success ties in with the other closely related, and vitally important, aspect of IBM's recent history. This is about its corporate culture -- specifically, the kind of culture that arises in an environment without intense competitive pressure or threats." By the time Gerstner had become CEO, the company and its people had lost touch with external realities. It was widely believed that what was happening in the marketplace was essentially irrelevant to the success of the company. "IBM's dominant position had created a self-contained, self-sustaining world for the company. IBM had ridden one horse, and ridden it well. But that horse could carry it only so far before it broke down.

This was the corporate culture which Gerstner encountered as he assumed his duties, a culture the product of two predominant forces: the runaway success of the System/360, and, the impact of the antitrust suit filed against IBM by the United States Department of Justice on January 31, 1969, the final day of the Lyndon B. Johnson administration. "For thirteen years IBM lived under the specter of a federally mandated breakup."

It would be a mistake to assume that most of the credit for what was accomplished at IBM during Gerstner's tenure as CEO should be given to him. He dedicated this book to "the thousands of IBMers who never gave up on their company, their colleagues, and themselves. They are the real heroes of the reinvention of IBM." This book explains how that was accomplished, a transformation whose objective was to re-establish "the high-performance cultured that animated IBM under both Watsons."

Having relinquished his duties as CEO to Sam Palmisano, Gerstner suggests that his successor has an opportunity to make connections to IBM's past which Gerstner had not. "His challenge will be to make them without going backward; to know that the centrifugal forces that drove IBm to be inward-looking and self-absorbed still lie powerful in the company. Continuing to drive change while building on the best (and [in italics] only the best) of the past is the ultimate description of the job of Chief Executive Officer, International Business Machines Corporation." It is probably too early to take full measure of Gerstner's performance in that position. However, now having his own account of those critically important years in IBM's history, we can at least appreciate the nature and extent of what he and his associates experienced...and what together they eventually accomplished.

Those who share my high regard for this book are urged to check out Kevin Maney's The Maverick and the Machine: Thomas Watson, Sr. and the Making of IBM as well as Thomas Watson, Jr. and Peter Petre's Father, Son & Co: My Life at IBM and Beyond.