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Making the World Work Better: The Ideas That Shaped a Century and a Company (IBM Press) Paperback – 10 Jun 2011
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“IBM doesn’t just THINK, it thinks big. The story of these big ideas illustrates how 100 years of innovation have shaped the way we live and work today.”
--Kenneth Chenault, Chairman and CEO, American Express
“Making the World Work Better convincingly documents IBM’s enormous impact on business and the world. Its history provides vital lessons for organizations of all sizes, and IBM’s future promises to continue to innovate the way we work, and even think.”
--Henry Chesbrough, Executive Director, Center for Open Innovation, Haas School of Business, University of California, Berkeley
"The history of every great, enduring company includes a triumphant struggle to remain relevant in the marketplace without abandoning a core purpose and values. At 100, IBM is one of a handful of organizations with so much to teach us about this unique journey."
--Howard Schultz, Chairman, President and CEO, Starbucks
"Innovation, resilience, and great leadership are the key ingredients of the IBM story. Making the World Work Better tells that story exceptionally well. Ultimately, it reveals that IBM is not simply a technology company; it is a company of ideas and the future those ideas have created."
--John Hollar, President and CEO, Computer History Museum
From the Back Cover
One hundred years ago, the company that would become IBM took its first steps into an unknown future. In Making the World Work Better: The Ideas That Shaped a Century and a Company, journalists Kevin Maney, Steve Hamm and Jeffrey M. O’Brien tell a story of progress that illuminates, and transcends, the rich history of a single enterprise.
Through extensive research, they explore IBM’s impact on technology, on the evolving role of the modern corporation and on the way our world literally works. Most intriguingly, they uncover a set of compelling ideas whose greatest impact may lie not in the previous century, but in the next one―ideas with the power to shape a surprising future, and to change the way we think.
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First of all, for anyone who has the slightest interest in the way that information technology has transformed society, this book is a Good Read. It tells the stories of how many of the developments we take for granted came about. Many of us old enough to remember the introduction of these, may have forgotten their origins as IBM inventions. Examples are the Universal Product Code or UPC barcode seen on virtually every item sold in shops; the PC; the relational database; automated teller machines (ATMs); airline computer booking system; floppy disks and others.
Other areas are still evolving such as mass storage where solid-state devices are getting smaller, denser and cheaper; supercomputers more powerful, faster and more capable; software more complex, more intuitive to use, and more analytical; networking more comprehensive, faster and intelligent.
The book describes these but also gives the anecdotes behind the stories of the first computer center (at Columbia University), Deep Blue, the chess playing computer, Watson, the intelligence system that won the Jeopardy contest, how the company gambled its future on developing the world-changing System/360 computer as well as scores of solutions to systems problems around the world.
The failures of IBM are also covered: how it missed out on timesharing, over-promoted one of the founder's sons, how corporate bureaucracy periodically constipated the company including near death in 1990-1.
Like many other distinguished and successful corporations, IBM has developed an identity and promotes a culture. Its employees are known as IBMers. Thomas Watson, the founder was never a hire-and-fire man like Henry Ford for example. IBM was also surprisingly early to take women into its fold with equal pay in 1935 and the first female vice-president appointed in 1943.
Although it seems strange today, the company had a strong dress code: white shirt, necktie, blue suit and shined shoes. Yet that conformity contrasted with a readiness to examine and develop revolutionary technology. The creation of the IBM Research Laboratories, now nine strong and presently employing 3,000 scientists, has kept the company in the forefront of technology as well as earning five Nobel prizes and becoming the world's largest patent creator.
The book dwells at some length on the contribution made by certain of its CEO's: Thomas Watson, Thomas Watson Jnr, Lou Gerstner and Sam Palmisano. It discusses the trials and ambiguities involved in seeking to translate enlightened American management practices to countries better known for oppression.
In the retelling of these stories, the authors do not stick with IBM. They bring in the importance of Bell Labs, Intel, Texas Instruments, Honeywell, Apple, Cray, Sun Microsystems, Microsoft and many others. But IBM, of course, is always there and is the main focus of the story. And that is at it should be. There is really no other information technology company in existence today that can boast a century of achievement. Many are much younger and others have been absorbed, merged and dismembered. Companies like General Electric and Siemens may have a longer history in technology but not in the development of intelligent systems the way that IBM has.
The book is a fund of information about how the global IT industry has developed with IBM as its constant champion. I enjoyed it.
Making the World Work Better looks at the history of innovation at IBM and the computing world in general. It's really quite an amazing journey. A hundred years ago, punch cards were useful for collecting data for time cards and the like but they couldn't do anything with that data and they sure couldn't manipulate it or analyze it. For the most part, industry was built while trying to make these systems more useful. Continuing to make them faster, more memory, greater computing power, and user friendly until people started to realize the potential of such systems.
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The book is well-written and easy to read. The three authors have backgrounds writing for publications like Business Week, USA Today, Fortune and Wired, so there's no overly technical stuff. As you'd expect to see in magazines such as these, there are plenty of photos, some of which are bound to bring back memories for many readers: (very) old computers, "IBM cards," big tape drives, typewriters, early PCs, etc.
There is a short forward written by Sam Palmisano, the current chairman and CEO, and then the book is broken into three parts corresponding to the three authors. Although others may come to a different conclusion, I found the first part, by Kevin Maney, to be the most interesting. Maney develops the stories associated with much of IBM's advancement of information processing technology. He groups his part of the book into six categories:
1. Sensing: The mechanisms by which information gets into computers.
2. Memory: The way computers store and access information. Anyone past puberty has seen enormous strides in this area.
3. Processing: The core speed and capabilities of computers. Ditto on the enormous strides.
4. Logic: The software and languages computers use. Anyone remember ALGOL? Or what FORTRAN stood for?
5. Connecting: The ways computers communicate with us (and other machines).
6. Architecture: The ways advances come together to create new systems.
Again, I found Maney's part of the book the most interesting. On the other hand, if I were a business major, I think I might have preferred Steve Hamm's part, "Reinventing the Modern Corporation," because Hamm develops the long and interesting story about IBM's intentional creation of a major business culture. If you know anything about this company, you know what I mean. Hamm address topics like:
1. How does a company define and manage itself?
2. How does an organization create value?
3. How does an organization operate in a global economy?
4. How does an organization engage with society?
Okay, now the third and last part of the book, by Jeffrey O'Brien. If I were a long-time, loyal IBMer, this might be my favorite part of the book. O'Brien covers numerous examples of how IBM has affected the world we live in. This part of the book reminds me of all those "I'm an IBMer" commercials you see on TV nowadays. To be fair, IBM has done a lot, and it's no surprise that the company wants to celebrate (through this book) some of its accomplishments.
In short, this book is both an excellent history and a celebration of the successes of one of the most influential companies in history. If you want to know more--given an understanding of the book's objectives--then it certainly merits your consideration.
Not sure if there are better books out there on this subject, but I would skip this one.
Sam Palmisano in his foreword emphasizes "The date of this volume's publication, June 16, 2011 is a meaningful one for IBM. On it, we celebrate our centennial as corporation....there is much to learn from IBM's experience."
Emerson W. Pugh, in my mind the best IBM historian, opened his excellent book "Building IBM" in 1995 with the following statement: "No company of the twentieth century achieved greater success and engendered more admiration, respect, envy, feat, and hatred than IBM."
I fully agree that there is much to learn IN IBM as well as FROM IBM's experience: working in IBM - a unique global corporation - with excellent IBM colleagues and IBM partners for demanding IBM customers, studying and understanding the deep roots and history of IBM result in many very valuable lessons in the following areas: entrepreneurship, leadership with business culture and business ethics, human resource management responsibilities, relentless innovation, strategy development and execution, business and technology management, risk taking, salesmanship, market coverage, customer relationship cultivation, coping with competitive dynamics, business partnerships, global view, adhering to business principles and practices, taking care of corporate social responsibilities etc. etc. IBM lessons are superior to some dry business management theories taught in business schools and business books by scholars and so called gurus. Providing the best possible solutions and services for IBM customers are part of the IBM DNA. IBM employees knowing the IBM history can better identify themselves with the company and represent the company outside than those who only work for the company to earn a living. IBM corporate executives and their managers are responsible for taking care for the various stakeholder interests in a balanced way with a long term view.
This book - Making the World Work Better - covers the following areas:
Pioneering the Science of Information: sensing, memory, processing, logic, connecting, architecture.
Reinventing the Modern Corporation: the intentional creation of culture, creating economic value from knowledge, becoming global, how organizations engage with society.
Making the World Work Better: seeing, mapping, understanding, believing, acting.
It is very interesting, written in a lively, journalistic style; readers find excellent pictures, photos, graphs, interesting background information even for insiders, it contains a spectrum of IBM's outstanding achievements, the "IBM Way", mistakes made in the past etc. etc. The three writers were fed with excellent material provided by IBM and IBM's huge archive. See "IBM Icons of Progress" on IBM's Website.
Sam Palmisano of Gerstner: "Without him, I don't think we would have survived. We needed somebody with that tough mind and analytical skill." For further details I refer to Gerstner's excellent book "Who Says Elephants can't dance".
Gerstner of Palmisano: "What Sam has done is the hardest thing to do - to take a successful platform and continually evolve it; Sam took a successful company and made it far more successful."
"IBMers like to think that the work they do is important to the world. There is the ethic of progress guiding how we think," said James Cortada, a member of the IBM Institute for Business Value and the author of dozens of books and articles on the history and management of information technologies.
On the pages 329-338 you find 351 notes providing a rich set of references to further sources.
One historic detail on page 39 raises some doubts: "On July 6, 1911, Hollerith agreed to sell his Tabulating Machine Company to financier Charles Flint for $2.312.100, and the company became part of Flint's Computing Tabulating-Recording-Company." This statement is misrepresenting the process resulting in the creation of CTR.
There is no such statement in the autobiography of Charles R. Flint "Memories of an Active Life" (1923), who describes himself as "The Father of Trusts", bestowed on him by the Chicago newspapers ... continuing "...in the light of thirty years' experience, during which time I have acted as organizer or industrial expert in the formation of twenty-four consolidations, let me review the general advantage of this form of industrial economy....In 1911 I made a departure from the practice of bringing about consolidations of allied interests, that is by consolidating the manufacturers of similar but not identical products. The Computing-Tabulating-Recording Co. is of this class; and although it is not the largest of the consolidations in which I have acted as organizer, it has been and is the most successful. At the outset of this organization, I pointed out to the Guarantee Trust Co. that proposed `allied consolidation', instead of being dependent for earnings upon a single industry, would own three separate and distinct lines of business...On the several but not joint responsibility of my syndicate subscribers, the Guaranty Trust loaned over $4.000.000....The Company started with an aggregate bonded indebtedness of $6.500.000 three times its then net current assets.
G. D. Austrian, in Herman Hollerith (1982), quotes Roebling writing to Hollerith: "Mr. Flint is a gentleman I have known for good many years, and his business is putting together industrial consolidations."
IBM describes Charles R. Flint as follows:
"Charles R. Flint was the founder of the Computing-Tabulating-Recording Company, the forerunner of IBM. A businessman and financier, Flint brought together in 1907 the principals of three companies -- the International Time Recording Company of Endicott, N.Y.; the Computing Scale Company of America, of Dayton, Ohio; and the Tabulating Machine Company of Washington, D.C. -- to propose a merger. Talks and detailed planning among the parties continued until June 6, 1911, when the Computing-Tabulating-Recording Company (C-T-R) was incorporated as a holding company controlling the three separate firms. Flint remained a member of C-T-R's board of directors until his retirement in 1930."
In a nutshell: Hollerith did not sell to Flint, it was a complicated financially engineered consolidation of companies with shareholders, of which Flint was not the owner but the orchestrator.
Therefore, this book does not replace studying prior books about IBM and the IT history, e.g. by Samuel Crowther (1926), Thomas Watson Sr., in Men-Minutes-Money published in 1934, Herman H. Goldstine (1972), G.D. Austrian, Thomas Watson Jr., Louis V. Gerstner, Jr., James Cortada (1993), Emerson Pugh, Paul E. Ceruzzi, Martin Campbell-Kelly and William Aspray, Alfred D. Chandler, Richard S. Tedlow etc. etc. Kevin Maney, one of the authors, wrote the excellent book about Thomas Watson, Sr., "The Maverick and his Machine" published in 2003.
In 1995 Emerson Pugh explained in Chapter 2 - Origins of IBM - on Page 28:
"It is traditional in IBM to honor Watson by equating the founding of the company with his arrival as general manager of CTR." Under Note 23 on page 336 you find: "The view that IBM was founded when T.J. Watson, Sr., became general manager of CTR in 1914 is broadly accepted. For example, the anticipated announcement of the appointment of Louis V. Gerstner, Jr., as chief executive of IBM was reported by the New York Times on 26 March 1993, p.1D as follows: "Mr. Gerstner, 51, who is chairman of the RJR Nabisco Holdings Corporation, would be the sixth chief executive in the 79-year history of the International Business Machines Corporation, and the first picked from outside the company's ranks."
In fact, I remember that IBM under John F. Akers celebrated its 75th anniversary in 1989!
Pugh continues on Page 28: "From a historical perspective, however, the founding of IBM might better be dated to the founding of Hollerith's business. Although other candidates for the `founding event' exist, winning the contract in late 1889 to process data from the upcoming census literally put Hollerith in business."
Thus, the year of 2014 is the next big opportunity to celebrate IBM's rich history: 100th anniversary of Thomas Watson, Sr., joining CTR and 100th birthday of Thomas Watson, Jr., Jan. 14th, 1914!
This is my favorite year of the birth of IBM, because it was Watson Sr. who had the IBM vision and was the longest of the long-term thinkers as Tedlow formulates correctly in chapter 10 headlined "The Watson Way".
We should never forget that the success of IBM has always been produced by generations of hundreds of thousands IBMers with their families who were proud of being with IBM, who sacrificed a lot to contribute, who gained tangible and intangible benefits being with this company. Time and again, starting with the almost forgotten man Arthur K. Watson, we encounter IBMers in IBM's history who considered themselves not being appropriately rewarded or respected. Arthur K. Watson's performance and contributions are described in [...]. The pressure on IBM's workforce was culminating during the downsizing from 405.000 to 301.000 employees during the Akers term and further down to 220.000 year end 1994 during the Gerstner term, an incredible reduction by 185.000 IBM employees within less than a decade. IBM made huge investments in separation allowances to support these dramatic reductions. However, we must not forget, that companies like Wang Laboratories, Digital Equipment and eventually Compaq disappeared or were acquired.Lou Gerstner wrote to all IBM employees on April 6, 1993, six days after his start: "I can only assure you that I will do everything I can to get this painful period behind us as quickly as possible, so that we can begin looking to our future and to building our business. I want you to know that I do not believe that those who are leaving IBM are in any way less important, less qualified, or that they made fewer contributions than others. Rather, we ALL owe those who are leaving an enormous debt of gratitude and appreciation for their contributins to IBM." Gerstner and his team brought IBM back into a leading and respected position; when he left year end 2001 IBM was back to a workforce of 320.000 employees.
Today the IBM workforce comprises more than 430.000 women and men.