Broken Promises: An Unconventional View of What Went Wrong at IBM

Overview

Once the world's most admired corporations, IBM stumbled badly in the early 1990s. At the depth of the crisis, the company suffered its first ever operating loss and eliminated nearly 200,000 jobs. What went wrong? Contrary to popular wisdom, the authors argue that the root cause of IBM's difficulties was not that it fell behind in technology, but rather that it disregarded its customers and misled its employees. In this book, Mills and Friesen draw on extensive interviews with IBM executives, access to company ...
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Overview

Once the world's most admired corporations, IBM stumbled badly in the early 1990s. At the depth of the crisis, the company suffered its first ever operating loss and eliminated nearly 200,000 jobs. What went wrong? Contrary to popular wisdom, the authors argue that the root cause of IBM's difficulties was not that it fell behind in technology, but rather that it disregarded its customers and misled its employees. In this book, Mills and Friesen draw on extensive interviews with IBM executives, access to company files, and surveys of the company's customers to explain why, despite its advantages, IBM's executives failed to maintain its leadership. The authors show that IBM developed an overly optimistic strategic plan based more on pride than on reality; made a financing decision that eventually crippled its industry-leading marketing franchise; destroyed its long-term relationship with customers, to whom it had guaranteed high-quality product and close service support; broke its implied commitment to employees of lifetime employment security; and executed a massive corporate reorganization that left the subsequent strategic crisis unresolved. Telling the story of IBM's downfall in the context of the company's history, the authors also outline the challenges that lie ahead for current leadership, even in the face of IBM's apparent rebound. Broken Promises is a cautionary tale of strategic miscalculation, managerial error, and a loss of confidence that demonstrates for executives at any large company the risks of neglecting customer and employee relationships in the face of large-scale change.
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Editorial Reviews

Publishers Weekly - Publisher's Weekly
In this incisive analysis of what happened to IBM, Quinn, a professor at Harvard Business School, and Friesen, a "knowledge manager" at Arthur Andersen, trace the ups and downs of this "long-term player in a short-term industry" and offer a mixed message concerning IBM's future prospects. Theirs is the story of an icon of American business fighting for survival, not because it failed to keep up with technological advances or lacked organizational flexibility, but because it let down both its customers and its employees. Drawing from several months of on-site research at IBM's headquarters, Quinn and Friesen argue convincingly that errors by recent management dislodged the two foundation stones of IBM's past success: its compact with customers to be the single-source supplier and caretaker of their information-processing needs and its compact with employees to guarantee their job security. The lessons they draw recapitulate contemporary management wisdom-e.g., remember that the customer comes first, understand your business, struggle unceasingly against bureaucracy, pay attention to employees. Unfortunately, the authors fail to delve into some fundamental issues: How might companies resist the short-term mentality that guides the operation of our capital markets? How wise is it to place strategic decision-making in the hands of one or a very few people when the lives of hundreds of thousands of people can be affected? This omission unnecessarily limits their contribution. (June)
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Product Details

  • ISBN-13: 9780875846545
  • Publisher: Harvard Business Review Press
  • Publication date: 6/1/1996
  • Pages: 210
  • Product dimensions: 6.41 (w) x 9.42 (h) x 0.93 (d)

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