Miles and snow's adaptive strategies

BEST PRACTICE Waking Up IBM How a Gang of Unlikely Rebels Transformed Big Blue Six years ogo, IBM was a hasbeen. Today, it's an e-business powerhouse. It didn't turn around by imposing change from the top. It let ideas, initiatives, and enthusiasm bubble Lip from below. Maybeyour company should do the same. BYGARYHAMEL D o YOU REMEMBER WHEN IBM was a case study in complacency? Insulated from the real work! by layer upon layer of dutiful manaj;ers and obsequious staff, IBM's executives were too busy fighting their endless turf battles to notice that the company's once unassailable leadership position was crumbling around them. The company that held the top spot on fortune's list of most admired corporations for four years running in the mid-T98os was in dire need of saving by the early 1990s. Fujitsu, Digital Equipment, and Compaq were hammering down hardware margins. EDS and Andersen Consulting were stealing the hearts of CIOs. Intel and Microsoft were running HARVARD BUSINESS REVIEW July-August 2000 137 BEST P R A C T I C E • Watting Up fBM that the data was being provided by Sun. And IBM didn't have a clue as to what was happening on the open Internet. It bothered me." The fact that IBM's mucketymucks were clueless about the Web Missing an Olympic wasn't exactly news to Grossman. Opportunity When he had landed at IBM a few years earlier, everyone was still usThe first match was struck in 1994 ing mainframe terminals. "I was in the backwoods of IBM's empire, shocked/' he remembers. "1 came on a hilltop in Ithaca, New York, by from a progressive computing envia typical self-absorbed programmer. ronment and was telling people at David Grossman was a midlevel IBM that there was this thing called IBMer stationed at Cornell UniverUNIX-there was an Internet. No sity's Theory Center, a nondescript one knew what I was talking about." builditig hidden away in the southThis time, though, he felt embareast corner of the engineering quad. rassed for IBM, and he was irked. He Using a supercomputer connected logged on to the corporate directory to an early version of the Internet, and looked up tbe name of the senior executive in of all IBM marketing, How did a company that had lagged behind every computer charge Abby Kohnstamm. Then he trend since the mainframe catch the Internet wave-a wave sent her a message informing her that IBM's Olympic feed was being ripped off. A that even Bill Gates and Microsoft originally missed? few days later, one of her minions working in Lillehammer Grossman was one of the first people sieged box maker to a dominant sercalled Grossman back. At the end of in the world to download the Mosaic vice provider. Its Global Services a frustrating conversation, Grossbrowser and experience the graphiunit, once a backwater, grew into a man had tbe feeling tbat one of them cal world of the Web. Grossman's $30 billion business with more than was living on another planet. Ever fecund imagination quickly con135,000 employees, and corporapersistent, Gtosstnan tried to send jured up a wealth of interesting applitions flocked to IBM consultants for some screen shots from Sun's Web cations for tbe nascent technology. help in capitalizing on the Internet. site to IBM's marketing staff in LilleBut it was an event in February, as By the end of 1998, IBM bad comhammer, but IBM's internal e-mail snow dusted the groxmd around tbe pleted 18,000 e-business consulting system coukln't cope with the Web Theory Center, that hardened his deengagements, and about a quarter of software. Tbat didn't stop IBM's dilitermination to help get IBM out in its $82 billion iti revenues was Net gent legal department from sending front of wbat he knew would at the related. Sun a cease-and-desist letter, which very least be the Next Big ThingHow did a company that bad lagged succeeded in shutting down the site. and might very well be the Ultimate behind every computer trend since Most frontline employees would Big Thing.