Tivoli is playing for higher stakes within IBM as well. Its culture is rubbing off on other parts of the parent company, creating ripples of change throughout the organization. IBM's other software groups are copying Tivoli's market-driven focus, its solution-oriented sales approach, and, occasionally, even its beer bashes. And IBM's hardware groups are working with Tivoli to make their products Tivoli-ready. These days, in fact, Tivoli is often the one that approaches IBM with suggestions -- rather than the other way around. "IBM gave Tivoli a lot, and we're just trying to give a little back," says Neath.

Indeed, things are looking more purple every day. "For those customers who say, 'I want to know that you're part of the IBM team and the IBM solution,' we can be that," says Steve Basile, 39, director of technical evangelism. "And for those customers who say, 'I want Tivoli, the independent software company,' we can be that as well. We can use whatever persona helps the customer -- without betraying one persona or the other. It's the best possible relationship."

Sidebar

IBM and Tivoli Systems are setting the agenda for fast change -- blending the power of a corporate giant with the agility of a startup. Here are some of the principles that guide the work of this billion-dollar "small" company.

1. The front line drives the bottom line.

One reason that Tivoli moves so fast is that Tivolians are comfortable with taking stands, speaking their minds, and challenging authority. And that's because the company's senior executives believe that the most valuable ideas often come from the people with the least seniority -- the people who actually create Tivoli's software. "The smartest employees are the ones on the front lines," says Mark McClain, 36, vice president of marketing.

2. Business is not a spectator sport.

One of the big problems with big companies, argues Tom Bishop, 45, chief technology officer and vice president of the embedded-solutions business unit, is that their size creates too many opportunities for people to sit and watch. "You have too many fans watching too few people play the game," he says. "You have to look at your people and ask, 'Are they just going to meetings and writing reports -- or are they actually writing code, doing work?' "

3. Just the (minimal) facts, ma'am.

The software business, like most businesses, is a moving target. Wait too long to introduce a new product, and it will be obsolete before it arrives. That's why Tivoli doesn't overstudy or overanalyze a problem. Instead, it defines the "minimum set of facts" that it needs to make a product decision, and then it hustles the software to market -- after which it adjusts the product as necessary.

4. Focus on the real enemy.

The reality inside most big companies is that lots of people spend time jousting with internal rivals rather than battling competitors in the marketplace. Why haven't such internal divisions emerged at IBM and Tivoli -- two companies with vastly different cultures? Because people from both companies rallied around a shared passion: beating their archrival, Computer Associates (CA).

After the 1996 acquisition announcement, for example, CA ran an ad in Austin inviting Tivoli employees to a recruiting event. "Tivoli just lost its independence," the ad declared. "That doesn't mean you have to." Tivoli fought back. Some of its newest employees flew in from Raleigh to make signs that read, "CA? No way!" The signs lined the road to the hotel where CA was holding the recruiting party -- and where Tivoli threw a party of its own at the same time.

5. Compete with yourself -- before someone else does.

It's hard for big companies to get beyond their first big success. That's why Tivoli created "the courtyard gang," a small team of marketers and developers who are charged with scrutinizing the company from the perspective of its competition.

The team strives to find vulnerabilities in Tivoli's products or in its business strategy before another company finds -- and exploits -- them. "The courtyard gang tries to create a scenario that would put Tivoli out of business," says Mike Turner, 33, vice president of Tivoli's enterprise business. "After all, if we don't come up with it, someone else will."

Chuck Salter (csalter@bcpl.net), a Fast Company contributing editor, is based in Baltimore. To learn more about Tivoli Systems inc., visit the Web (www.tivoli.com).