GERSTNER: There’s certainly a need for IBM people and shareholders to see some cohesiveness to what we’re trying to do. But there’s also a tendency to be kind of loose with the word vision. A vision is often what somebody turns to when it gets hard doing what’s required, namely, good, solid blocking and tackling. Remember, the Wizard of OZ was a vision.
I didn’t start out with a clean slate here. Nobody asked me to design a brand-new computer company where the initial requirement would be to figure out what sectors of the industry you want to be in. That’s what you do with a new business. I started 100-odd days ago with a company with $60 billion in sales that was losing billions of dollars. Spending a lot of time right now thinking about what parts of the computer business we should be in is not the best thing I could be doing with my time.
I want to deal with what’s here. IBM is the largest hardware company, the largest software company and the largest information-services company in the world. it seems to me that if you’re No. I in the market and you’re not making money, the first priority is to fix what you’ve got before thinking about another portfolio of businesses.
Well, when we get to the point that we’ve got a very competitive set of economics, then we’ll have to make choices that say, “You know what? Even though we’re competitive in this business, this doesn’t look like a good business for our shareholders.” At that point, maybe we’ll get out.
I haven’t seen any great evidence that the pieces of IBM are much better on a stand alone basis than they are in IBM. The world is full of piece-parts makers. There are plenty of storage companies, printer companies and mainframe companies. There isn’t a great unfulfilled demand out there for more of these pieces. What IBM has alone is its ability to pull it all together. Now, if the customers don’t want that, we may have to go to the parts strategy.
When I got here, I had no idea what IBM’s problems were or the cause of those problems. What became apparent to me very quickly was that the most important thing we had to do was to complete the resizing of the company and it was important to move on it as quickly as possible. I’m referring to the kind of sausage slicing that we’ve done here in terms of [reducing the size of the work force]. A company that isn’t profitable and is always working under the threat of cutbacks comes under pressures that permeates everything it does. it affects morale, the behavior of customers and long-term thinking.
I didn’t see any sort of indication that there was more to go.
No. One reason is that our U.S. business was able to move more quickly in the last year than certain operations outside the U.S. But that has nothing to do with economic demand. It takes longer to carry out restructuring of this kind in some countries than it does in the United States.
I don’t think there’s anything different going on here that doesn’t go on at all corporations. You rejuvenate your board when people retire. We wouldn’t be comfortable with everybody sitting around the table being a technologist. We want smart people who do their homework and recognize that being a board member today is a tough assignment and that we run this company for the shareholders.
