As competitors like Gateway and Hewlett-Packard sag under the weight of fourth-quarter sales slumps, IBM is standing stock-straight and enjoying the view. Earlier this month, Big Blue punctured the gloom and doom of Wall Street with a ray of sunshine: an end-of-year earnings report that actually exceeded analyst projections.
In part, IBM's recent triumphs validate the work of the company's Speed Team, a passionate posse of employees hell-bent on internal velocity and efficiency. Fast Company reported the Speed Team's mission statement and immediate goals in Faster Company last May, shortly before IBM stock soared to $134 a share. Last December, that number plummeted to about $80; it now hovers between $90 and $110.
The market has changed enormously since "Faster Company" first appeared in print. But at IBM, little else has. In the following interview, Speed Team leader Jane Harper explains why being fast is more important than ever, how IBM plans to dominate Act II of the new economy, and why it's still about the people, stupid.
Last year, you said the Speed Team would be a failure if it still existed six months after its formation. So, was it a success?
Yes. We were an ad hoc group that came together for a short time for one purpose: to make speed a way of life at IBM. Our strategy was to look at various realities in our organization, weed out the problem spots, and become catalysts for change.
Our goals — improving speed, encouraging teamwork, and improving communications — weren't rocket science, but they were difficult to achieve because we had to stir things up and stitch change into the fabric of IBM. For six months, we worked as teachers and helpers, encouraging speed and putting into place some basic processes to support a faster company. Once the team lit a few fires, we broke up and returned to our disparate day jobs last summer.
What were the Speed Team's most profound discoveries and changes?
You can't achieve great speed without great people. And great people can't make a real difference without powerful leaders to motivate them along the way.
During the course of our Speed Team work, we found many people working at less than 50% of their potential. We saw a lot of action, and we saw things moving really fast, but we didn't see people conceiving great ideas. We dug deeper and discovered that people didn't feel empowered. They understood the processes, but they didn't feel they had any leverage to change or improve them.
So we taughts our leaders how to draw the greatest potential out of their people. We helped them understand that they must unleash the power of their teams to achieve the kind of speed we expected. Make your people feel that anything is possible, and they will blow your mind.
How have the definition and significance of "speed" changed at IBM in the past year?
Five years ago, we thought speed was important. One year ago, we knew speed was important. Now speed is survival — especially in the war for talent.
The new economy is powered by an Internet generation — a generation that moves at breakneck speed and plays by a different set of rules. IBM doesn't make the rules anymore; the people make the rules. To compete in the talent war, IBM must create a work environment that is completely different than what we had six months ago. People want flexibility, a free flow of information, continuous learning opportunities, and the best projects in the world. And they have no tolerance for bad management.
The great leadership challenge moving forward will be creating an environment based on empowerment rather than fear. On the Speed Team, we found that people were failing to live up to their potential because they were afraid of making a mistake, of looking foolish, of taking an idea all the way. As leaders, we must blow up those speed bumps and ignite the passion of our people. Because great people are not just 2 or 3 times better than average people — they're a 100 times better, and they can make a business move at the speed of light.
Talent has been a long-running priority for IBM. In Faster Company, you talked about your Extreme Blue program for recruiting top college graduates. What's the update on IBM recruiting?
Once we attracted great, innovative students to IBM, we were faced with important questions: How do you unleash new recruits' potential and power? How do you get great Internet technology developed and into your customers' hands fast? Our answer is Blue Works.
Blue Works is a concept we're launching this year. It's a program that will help our smart, ambitious recruits start developing leading-edge Internet applications and solutions for our customers. Last year, our focus was internal. Now we are letting our speed loose on our customers.
We think Extreme Blue will attract people to IBM, but we also think it will keep them excited about their jobs. Today, young graduates want to know that their projects will be exciting and fast-paced.
What are the coolest projects looming on IBM's horizon?
IBM wants to help its customers become premier e-businesses. That's our vision — period. In order to do that, we are embracing open standards.
Back in the early days of the Internet, TCPIP was the standard. Now we need standards that are going to make it easier for businesses to connect their backend systems. Business is no longer about working in a little cocoon, creating your technology in secret, and letting it leak out little by little. The new economy requires a completely different mind-set of openness.
Think about the drawbacks to closed standards: When you leave the United States, you can't drive on the same side of the street, you can't plug in your computer without an adapter, and you can't use your cell-phone 99% of the time. That's not productive! IBM is working to rid our industry of roadblocks like that by promoting open-source technologies like Linux, XML, and UDDI.
For the next six months, we will focus on the idea of Web services as a way of sharing and integrating applications. The Web isn't going to be people talking to servers anymore; it's going to be servers talking to servers. If we make it easier to complete transactions between servers, all of our lives become easier. Web services is an exciting area that IBM plans to participate in heavily — working to create open standards during this crucial, early stage. IBM knows it can compete on customer service and quality. Now we need to create an open environment where our competitive strengths can really shine.