Who Says Elephants Can't Dance?: Leading a Great Enterprise through Dramatic Change Read Online Free

many challenges can run out of cash very quickly.
    I told Burke that I wanted to meet with Paul Rizzo. Paul had been an executive at IBM in the 1980s. I had met him on several occa WHO SAYS ELEPHANTS CAN’T DANCE? / 15
    sions and admired him greatly. He had retired from IBM in 1987 but had been called back by the IBM Board of Directors in December 1992 to work with John Akers to stem the decline of the company.
    I told Burke during that February phone call that I wanted to go over the budget and plans for 1993 and 1994 with Rizzo.
    Jim moved quickly, and on February 24, at the Park Hyatt hotel in Washington, D.C., where I was attending a meeting of The Business Council, I broke away for an hour and a half to meet secretly with Paul in my hotel room. He had brought me the current financials and budgets for the company.
    The discussion that ensued was very sobering. IBM’s sales and profits were declining at an alarming rate. More important, its cash position was getting scary. We went over each product line. A lot of the information was difficult to evaluate. However, Paul clearly underscored the make-or-break issue for the company: He said that mainframe revenue had dropped from $13 billion in 1990 to a projection of less than $7 billion in 1993, and if it did not level off in the next year or so, all would be lost. He also confirmed that the reports in the press about IBM pursuing a strategy of breaking up the company into independent operating units was true. I thanked Paul for his honesty and insight and promised to treat the material with total confidentiality.
    When he left the room, I was convinced that, on the basis of those documents, the odds were no better than one in five that IBM could be saved and that I should never take the position. A consumer products company has long-term brands that go on forever. However, that was clearly not the case in a technology company in the 1990s. There, a product could be born, rise, succeed wildly, crash, disappear, and be forgotten all within a few years. When I woke up the next morning, I was convinced IBM was not in my future. The company was slipping rapidly, and whether that decline could be arrested in time—by anyone—was at issue.
    Still, Jim Burke would not give up. His persistence may have 16 / LOUIS V. GERSTNER, JR.
    had more to do with a growing desperation to get anyone to take this job than it did with a particular conviction that I was the right candidate. I wondered at this point if he was just trying to keep a warm body in play.
    Two weeks later I was back in Florida for a brief vacation. Burke and Murphy insisted on a meeting to pursue the issue one last time.
    We met in a new house that headhunter Gerry Roche and his wife had just built in a community near my own. Roche only played the role of host. In his new living room, it was Burke, Murphy, and me alone. I remember that it was a long afternoon.
    Burke introduced the most novel recruitment argument I have ever heard: “You owe it to America to take the job.” He said IBM
    was such a national treasure that it was my obligation to fix it.
    I responded that what he said might be true only if I felt confident I could do it. However, I remained convinced the job was not doable—at least not by me.
    Burke persisted. He said he was going to have President Bill Clinton call me and tell me that I had to take the job.
    Tom Murphy, who tended to let Burke do most of the talking in our previous meetings, spoke up more frequently this time. Murph, as he is called by his friends, was quite persuasive in arguing that my track record as a change agent (his term) was exactly what IBM
    needed and that he believed there was a reasonable chance that, with the right leadership, the company could be saved. He reiterated what I’d heard from Burke, and even Paul Rizzo. The company didn’t lack for smart, talented people. Its problems weren’t fundamentally technical in nature. It had file drawers full of winning