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The Virtues of Near Death: IBM versus GM

Posted by: Michelle Conlin on January 7, 2009

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For more than a decade now, my boys over at Future of Work, those uber-youthful sages Jim Ware and Charlie Grantham, have been preaching the virtues of geographic agnosticism: work—and corporations—that are place neutral. Location independent. Post geographic. Ideally, this allows employees to work anywhere at anytime, so long as they hit their targets. Such is the managerial religion at companies like Best Buy.

In a recent blog post, Jim and Charlie pointed out that this very depressing time comes with some very encouraging opportunities. For example, this economic crunch could really be the tipping point for work—and workplaces—going post geographic.

For those whose moods are sour, who are stewing, cubicle-side, in their juices of negativity, take heart. Jim and Charlie remind us: plenty of others have faced down the darkness:

“The benefits of near death? You heard us right; we may be hopeless optimists (when we’re not being hard-core cynics), but we’re actually convinced that near-death may be the only pathway to survival.

Here’s why.

We’ve been whining for what seems like forever about why companies don’t change and move towards more efficient and effective ways of doing business.

Well, in these dark days we’ve come to realize that organizations (and nation-states, for that matter) actually behave very similarly to human beings. They don’t change until, and unless, the pain of staying where they are dramatically exceeds the pain of changing.

Put another way, we all avoid significant change until we really, really have to bite the bullet and do it. An addicted person; someone trapped in a horrible personal relationship; a person in spiritual crisis – they all move toward change only when their pain goes off the scale.

Consider this example. In the mid-1990’s IBM actually came within two weeks of failing to make its payroll. You may remember that the company that once graced the cover of Fortune Magazine as the “best managed company in the world” fell on hard times as it failed to react quickly enough to the emergence of the personal computer, the microchip, the Internet, and open-source computing.

Interestingly, IBM today is once again a strong, healthy organization that is actually a global leader in open-source computing, and it’s become known more for it’s innovative technology leadership and consulting/outsourcing service capabilities than for it’s “big box” mainframe computers. It took a near-death experience to drive IBM’s executives to embrace the Information Age with actual enthusiasm. They literally had no choice; it was change or die.

And, yes, many organizations (and individuals) never reach that point; they end up self-destructing. Will GM self-destruct? Is its pain great enough to drive radical change in its business model? To shed its onerous cost structure? To get a brain transplant – er, we mean a new management team? We’ll see.”



How can you manage smarter? Bloomberg Businessweek contributors synthesize insights from the brightest business thinkers, critique the latest management trends, and comment on leaders in the news.

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