"Elephants can dance" refers to the story of IBM or the story of General Motors?

Who says elephants can't dance is an autobiography written by Lou Guo Shina (Guo Shina), the former chairman of IBM, which tells the story of IBM's successful transformation.

Here are some related information for your reference!

Guo Shina's successful experience in IBM reflects the successful process of enterprise reorganization and transformation, in which change management is very important.

IBM is a leader in the computer industry. However, the popularity of personal computers and the rise of companies such as Microsoft and Intel in the 1980s and 1990s posed a positive challenge to IBM. Since then, IBM's performance has gradually declined, with a loss of $5 billion from 65438 to 0992. The industry is rumored that IBM is about to close down.

In this case, IBM invited Guo Shina 1993 in March. Guo Shina has worked successfully in McKinsey & Company, American Express Company and RJR· Baker Company. Taking over IBM is a great challenge for Guo Shina. Unexpectedly, however, Guo Shina stayed at IBM for nine years. When he left in March 2002, IBM became a leader in IT services, hardware, enterprise software (excluding personal computers), custom design and high-performance computer chips. So how did Guo Shina complete the strategic transformation of IBM and make the "elephant" dance?

IBM's Change Management Process

Guo Shina knows that as an outsider, it takes courage and art to implement change management in a deep-rooted large enterprise. Therefore, his first task is to make IBM employees and management accept himself. At the beginning of his tenure, he claimed to reuse old employees, and frequently visited branches and sub-branches to have face-to-face communication with employees. In fact, this is not only a thorough investigation process, but also a measure to stabilize the morale of the army and make full preparations for future reforms.

Reform means uncertainty and potential pain. Guo Shina believes that the CEO's job is to find out the crisis and communicate with employees, telling them the scope and seriousness of the crisis and how to end it. After that, Guo Shina planned the reform process in order of priority. He first set out to solve IBM's financial problems and determined five priority tasks after taking office, namely: temporarily freezing working capital; Ensure that it can achieve profitability in 1994; Formulate and implement the key account strategy of 1993 ~ 1994; Complete the task of streamlining layoffs at the beginning of the third quarter; Formulate a medium-term business strategy.

Opening up sources and reducing expenditure is the focus of Guo Shina's work after taking office. First of all, he implemented the leading product price reduction measures, which greatly reduced the cost and made the sales volume and sales profit rise rapidly. Secondly, he sold unproductive assets, and then implemented the layoff strategy in time, thus fundamentally improving the company's financial situation.

Guo Shina's Strategic Thought

In Who Says Elephants Can't Dance, Guo Shina tells more about his strategic thinking on IBM's transformation.

1. Split or maintain integrity. In the case that both inside and outside the company advocated splitting IBM, Guo Shina insisted on maintaining the integrity of the company. He believes that although the professional development of the IT industry has the upper hand for the time being, providing diversified products and services is IBM's competitive advantage, and splitting IBM is actually self-defeating.

2. Centralization and authorization. When Guo Shina took office, IBM had two important forces: overseas business department and Product Division. In order to carry out the reform measures smoothly, he reformed the company organization, broke the situation of geographical division and compartmentalization, canceled the management Committee and established the executive Committee, thus changing the basic power structure within IBM. At the same time, he advocated recruiting senior managers such as chief financial officer and human resources director and giving them full authorization, thus laying a solid foundation for reform.

3. Product orientation or customer orientation. Although IBM has led the IT industry for many years, its main income comes from mainframe, server business and related service products. Because it has always occupied a monopoly position in the market, its so-called customer service has become an empty talk. In the early 1990s, IBM's business strategy was actually product-oriented. Guo Shina insists on customer orientation, and turns IBM into a market-driven company, instead of an enterprise that only focuses on the inside and takes the process as the driving force. At the same time, he changed the definition of service to "the assistance and extension of the main product business that represents the interests of customers and provides customers with a package of solutions".

4. Whether the strategic direction is independent computing or giving way to networked computing. Although personal computers were in the limelight at that time, Guo Shina thought that a very fast and high-bandwidth network could realize many functions of personal computers, so he resolutely gave up direct competition with Microsoft and Intel, gave up the development and promotion of OS/2 operating system, and concentrated on developing network computing equipment and corresponding software which he called "intermediate components". In addition, Guo Shina also made a gambling decision. He decided to sell its technical components and rewrite all the original incompatible software. This is a very wise move. Selling its technical components can not only make up for the shortage of R&D funds and retain key talents, but also improve the influence and popularity of its technical components.

Changes of corporate culture

The original corporate culture of IBM was deeply influenced by the founder Watson Sr, and its basic beliefs were: excellent, high-quality customer service and respect for individuals.

Guo Shina found that IBM's original corporate culture has gradually turned into dogma, and gradually lost its original meaning. Take clothing culture as an example. The most impressive thing about IBM is that its employees are all wearing black suits and white shirts. The original intention of this system is to send a message, that is, to respect customers. But as time went on, the dress code remained, but the customer-related information sent by Watson was forgotten. After entering IBM, Guo Shina abolished the dress code of 1995, and instead emphasized that you should decide your dress according to the time and place and the people you want to meet. Guo Shina has gradually formed a new corporate culture concept of IBM: 1. Essence is more important than form; 2. Guided by principles rather than rules; 3. Employees change their own culture. In a sense, the successful transformation of corporate culture has made great contributions to the successful transformation of IBM.

Reform of salary mechanism

IBM used to implement paternalistic salary and welfare system, average wage system, fixed bonus, internal benchmark and allowance. This compensation mechanism is compatible with IBM's market position and operating conditions at that time. However, in 1993, IBM's operation was already very difficult, with poor sales and declining performance. The original welfare system is no longer suitable for the development of the company. Therefore, Guo Shina began to reform the compensation mechanism. He implements a performance-based salary system, with external as the benchmark and performance as the benchmark. The floating salary of employees is directly linked to the overall performance of the company. At the same time, he released stock options, granted stock options to tens of thousands of employees for the first time, and used them to retain important employees. On the other hand, the implementation of the new compensation mechanism has once again promoted the implementation of the company's strategic decision.

The successful transformation of IBM can be said to be a miracle, and the creator of this miracle is Guo Shina. An excellent manager does not lie in whether he is a professional or a layman, but in his ability to carry out his management thoughts and strategic thinking strategically and step by step.

I hope the above answers are helpful to you!