Report From the Past - Jane Harper

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.