- IBM used to be a powerhouse in technology
- Since the early 1990’s, their downfall has been spectacular
- IBM has seen revenues fall for 19 straight quarters (as of early 2017)
- They recently ordered all employees must work in one of six cities
- The employees who are not in one of those locations must either move or will be fired
- This is exactly the opposite of what most tech employees want
- IBM is going to have a hard time retaining their top employees with this new policy
When I was a young lad, IBM was this amazing super company that was the leader and innovator. Even when I started working in technology, the standard mantra was executives who felt safe using IBM for their new systems “…could not go wrong.” Ah, the mighty have fallen. Scan the pages of technology websites and search for articles on IBM. Buried in the thousands of articles about Google, Facebook, Tesla, and even Microsoft are only a few side articles about IBM. The Watson program does look very interesting but IBM has been incapable of capitalizing on it.
IBM Fell Down
From their beginning, in 1911 IBM set standards in computer hardware and software and it looked like they could not be stopped. They were a patent factory for years inventing all kinds of new systems and methods of obtaining and delivering business. Among other many products, IBM invented the UPC barcode which is used in almost every grocery store to check out items. That was an amazing invention which has saved the retail businesses billions in costs.
Starting in the 1990’s, IBM started to spin off businesses (e.g., printers, personal computers, and computer chip manufacturing). They were conceding they could not compete with other companies in those areas and decided to move more towards consulting.
They still have employees turning out amazing products but they cannot convert those products into market leaders. There are still over 380,000 employees and revenues in 2016 was almost $80 billion (US). But, their revenues have fallen every quarter for almost 5 years.
Panic Hits the Executive Suite
I have been a fan of psychology methodologies and enjoy reading magazines like Psychology Today. One trait a person will exhibit when under incredible pressure is to revert to childhood activities.
The same can be said for businesses. When in trouble, these businesses revert to a previous state hoping to catch the magic again. Or, the CEO will go back to something they did in another company.
That methodology is riddled with holes, it is almost laughable. I personally cannot go back to my childhood and my carefree ways 40 years later. The world has changed and my life has changed. I must live in reality and face the current world.
Same for businesses, they must live in the current world which has significantly changed – even in the last 5 years.
However, this has not prevented IBM from trying to go back to their glory days. The CEO, Ginni Rometty, decided that most employees must work in either Atlanta, Austin, Boston, New York, Raleigh, or San Francisco. For those employees that don’t move, they get to take their skills to another company. Following Yahoo’s disastrous moving of everyone back into the office and the subsequent plunge to the bottom, you would think companies would be hesitant to dump employees that don’t move to one of their offices. Apparently, IBM does not care about the skills of their employees.
The outcome is certain. The most skilled employees will not move and the minimal employees, who cannot get a job elsewhere, will move to one of these locations. After scraping off the cream of the top of the company talent, IBM will be left with a second-grade team. Good luck!
The Future of IBM
I have no idea how IBM will succeed in this new world. However, draconian decisions like this indicate that IBM management is reverting back to the old days. I cannot see how this will succeed.
It is possible that thousands of employees and their families have been hurt by this policy. Lifestyle is important to the current workforce (especially younger workers) but forcing the employees to move to a location against their will not be acceptable. That policy worked fine in the 1960’s but will not work today. Big mistake.
I predict that several years from now, this policy will be relaxed or reversed and remote work will be permissible – or IBM will continue to sink like a stone.