IBM's Management Makeover

Riley's team is now training IBM's executives in the new competencies. This year, only top management will be assessed against them. The next group -- some 4,000 executives -- will have a year to study the goals before being held accountable. But the new approach has already spurred some more flexible, collaborative efforts. Cross-functional teams from IBM's global services, software, and systems groups have helped Mobil Travel Guides transform itself from a travel content provider to a real-time, customized travel-planning service; a team of staffers from Big Blue's research, software, and consulting services helped Nextel dramatically improve its customer-care services.

In an interconnected world, such horizontal, collaborative networks of people clearly make more sense than rigid hierarchies. And leading in such a challenging environment is an acquired skill. "Leadership is a personal journey for each person," says Riley, "but I think having a culture that says this stuff matters -- particularly when it's linked to your business strategy -- is a very powerful combination."

IBM's New Leadership Traits

If you were a leader at IBM, here's what you would be graded on.

Innovation that matters -- for our company and for the world

Thinking horizontally: Leverages IBM's enterprise capability to address client or market opportunities in new ways.

Informed judgment: Synthesizes disparate sources of information to make an informed judgment regarding a strategic decision with both immediate and long-term implications.

Strategic risk-taking: Innovates to create exponential growth, using multiple resources from around IBM.

Dedication to every client's success

Building client partnerships: Builds ongoing, collegial relationships with key clients based on mutual strategic interests.

Collaborative influence: Creates interdependence, building genuine commitment across organizational boundaries to a common purpose.

Embracing challenge: Proactively builds in others the belief that they can innovate and grow the business.

Trust and personal responsibility in all relationships

Earning trust: Does what is right for the long-term good of relationships inside and outside of IBM.

Enabling growth: Changes systems or processes that impede growth and performance.

Passion for IBM's future: Gets others energized to realize IBM's unique potential.

Developing IBM people and community: Takes accountability for investing in the future leadership of IBM.

Linda Tischler is a Fast Company senior writer.