Be the first to know about new episodes of The SparkCom Podcast and insights from Spark Partners!

Sign up for our newsletter to stay informed!
Thank you! Your submission has been received!
Oops! Something went wrong while submitting the form.

The SparkCom Podcast

Click to Follow the SparkCom Podcast!

The Death of IBM - How To Avoid Your Demise

Adam Hartung, Manny Teran
value proposition, leadership, market, ibm, trends, business,

Listen to the SparkCom Podcast on

spark partners podcastspark partners podcastspark partners podcastspark partners podcastspark partners podcastspark partners podcastspark partners podcast

IBM is well on its way to becoming the next Sun Microsystems, Wang or Digital Equipment Corp (DEC.)  Despite an incredible legacy, today IBM is irrelevant in the marketplace, and its sales have been declining for nearly a decade.  Since 2000 the value of Apple has risen 14,900%, while IBM’s  value has risen 5.7%.

This happened because IBM forgot its Value Proposition.  Instead of focusing on how it could add value to customers by aligning with trends and bringing new solutions, IBM’s leadership focused on the internal operations of the company and how to manage costs.  Instead of investing in solutions, it bought back shares.  Instead of creating revenues, it managed earnings.  It forgot that the sales dog wags the earnings tail – and focusing on the tail let the dog get very sick.

IBM’s leadership failed to look at its markets and trends.  Lou Gerstner came in from outside and turned around a failing IBM in the late 1980s by refocusing its Value Proposition on the overwhelming need to manage the tools of automation.  But Rometty looked at how to “engineer earnings” and treated customers as an afterthought, thus missing market shifts in hardware, software and solutions.    As leaders we must remain focused on external markets and invest in trends or our companies will become as irrelevant as IBM

Thought Points:

  • Are you focused on Sales, or Earnings? Only the former focus will succeed.
  • Are you spending most of your time thinking about markets and how they are shifting, or are you spending your time optimizing your business model?
  • How do you maintain an “outsider’s perspective” on your business?