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organizational shake-ups

Ubiquity, Volume 2000 Issue August, August 1 - August 31, 2000 | BY Louis V. Gerstner 


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IBM chief executive Louis V. Gerstner says:

"I am a big believer in forcing change on large institutions just for the sake of forcing change. The longer an organization stays intact, the less successful it is. I've been absolutely convinced that you've got to blow things up and start over again every few years, and that puts a whole new face on people's jobs. It gets people focused externally rather than internally."

Don't just blow things up, make some really radical changes

Let me begin by saying that I am a retired IBMer, having served Big Blue from 1968 to 1992. During this period, I witnessed many organizational changes at both local and corporate levels. The changes were always billed as necessary for the department or division or corporation to achieve its goals. In too many cases, however, it was apparent that management was reorganizing for other reasons, such as to hide incompetence or to address perceived threats, often from other groups within the corporation. In many cases, organizational churning resulted, at great cost to effectiveness in the marketplace. I do not disagree with Mr. Gerstner's view on the need for change, but I do question the assumption that it is an executive's duty to "blow things up." This assumption flows from an assumed "divine right of management" to rule their petty baronies. We now understand that creative, successful societies are the result of people freely pursuing their own dreams. We have seen too many examples of central planning bringing entire nations to their knees. So too with business enterprises; paternalistic, military-style hierarchies governed and structured by fiat from the top need to be replaced with self-organizing units that evolve in response to market forces. If Mr. Gerstner really wants to force change, he should consider something really radical. How about granting all employees rights to control some portion of the assets of the corporation? Call them "control shares" as opposed to traditional "ownership shares." Make compensation based at least partially on the number of control shares held, and allow employees to freely associate (i.e., organize) to meet the goals of the corporation. Success for individual employees consists of obtaining additional control. Failure to do so automatically eliminates the incompetent. No performance plans and reviews, or other such fruitless HR systems are necessary. The overall corporation self-organizes to meet the needs of the real world. And no executive needs to "blow things up and start over."

� -- Richard A. Demers

Deadwood: They will survive

I do agree with Gerstner, however it's easier said than done. By this I mean IBM has made many changes, however there are still many deadwood management players in positions that they should not be in. Also there are younger professionals being put into management slots that do not have the management skills. IBM is famous for this here in Toronto. While cleaning house is good, it adds stress to the performers, and jolts the useless, who still seem to survive. As they say, it's who you know, not what you know.

-- Albert Bissember

Give me a good reason and I'll think about it

I believe change for its own sake is not healthy for organizations. However, motivated change can be good. An organization that has not changed for years is probably due, or past due, for change. However, the first objective should be to identify why change is needed, such as to respond to something that has happened, or to prepare for something that can be foreseen. People can accept change and figure out how to change if they understand why it is needed. They are much more positive about change when they see a substantial reason for doing it. Change for no apparent reason is often upsetting or even demoralizing to people.

-- Tom Bajzek


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