Who Says Elephants Can't Dance? Inside IBM's Historic Turnaround

IBM should thank its lucky stars that Louis Gerstner, Jr. was there to save the day. His strategic and complex scheme to save the country was utter genius. In his book, "Who Says Elephants Can't Dance", Gerstner explains how he took IBM by the throat and shook its economical and technological foundations until a dramatic metamorphosis occurred. I liked the fact that Gerstner went solo to write this book because that helped me to understand what he was thinking when he made his different choices. Everything from reintegrating the IBM management team to unveiling IBM's e-business idea was so precise in a book that lacks length (being under 300 pages long). This book will inspire anyone with the hopes of being management material. It's definitely worthy of a five-star rating.

Most MBA programs utilize case studies to one degree or another. As you work through them you develop mental habits of analysis that help you get to the nut of the case fairly quickly so you can get prepared for class. One of the problems is that most cases are oriented as marketing cases, or operations cases, or strategy, or finance, or organizational behavior, or accounting, or whatever cases. A few are used by multiple disciplines, but very few integrate all the management disciplines.

This book is a terrific integrated case. I enjoyed it tremendously and feel I have learned a lot from it. What I enjoyed most was the way Mr. Gerstner demonstrated the way all the disciplines are important in leading a great corporation. And especially the difference between the emergency room behavior he had to engage in when he first joined the company and had to start the bleeding and the different emphases he had to have in transforming IBM into an organization that could thrive in today's marketplace while remaining a great corporation.

I am glad to read about his emphasis on corporate culture while retaining a fierce focus on operations and backing strategy with constant, continuous analysis with hard numbers. All fueled with passion to win. I think this is a winning recipe. And it is very easy to write down, but almost impossible to really execute. Mr. Gerstner did a great job and we all owe him thanks for keeping IBM together and making it competitive once more.

People who are angry that the old IBM is gone shouldn't blame Mr. Gerstner. The old IBM was dying and was going to be broken up. Finding the right markets for the organization to compete in and remain together was a bet not many would have made. Certainly, it is not likely that Mr. Gerstner made perfect decisions nor did the people who worked for him act with transcendent brilliance either. The point is not perfection; it is competing effectively, actively, and with some intelligence. Mr. Gerstner shows us how he and his team did that in the 1990s and I thank him for this great book that I encourage all students of business to read closely.

Gerstner's drastic changes may have disrupted the lives of many employees, but far more would have suffered if IBM had continued down the road to dissolution he diverted it from. In this book Gerstner distills his insights into modern business imperatives in a clear, readable, lively style open to the vast majority of us citizens who do not subsist on electrons and silicon chips.

"Who Says Elephants Can't Dance" is the history of Louis Gerstner, Jr.'s tenure at IBM. Mr. Gerstner joined IBM at a critical time when sales were slumping and the behemoth of a company was laying people off almost every quarter. What they needed was someone who could turn the company around and take it to new heights. What they had was a complex bureaucracy that allowed little change and tended to support the continued decline of the company. Of course we all know now that Mr. Gerstner was able to change IBM and produce a viable thriving company able to compete in the world markets once again. This is the story of what happened from Louis Gerstner's own hand.

Mr. Gerstner provides insight into his viewpoint of what was happening in the company and his own fears and concerns from before the day he was named CEO until his retirement in 2002. If you want to know what was happening at the top and what he was thinking as he went along, you will want to read this book. If you read and liked Lee Iococca's book on his turnaround of Chrysler you will find this book similar and also very interesting in its own right. A study in tough management and changing direction with a company that has its own momentum, "Who Says Elephants Can't Dance" is a recommended read.

This is the story of IBM's miraculous turnaround in Lou's own words. I use "Lou's own words" with intent here, as there was no ghost writer or co-author. The story of the revival of an American icon is written from the viewpoint of the man picked to do it himself.

The book is organized into 4 sections: Getting Hold, Strategy, Culture, Lessons Learned and Observations. (ok, so that's 5 sections)

Getting Hold covers Gerstner's initial immersion into the new environment, and his analysis of the problems. He also covers his famous comment that "the last thing IBM needs is vision" and explains his view in the need for tactics and execution. This flies in the face of what one might expect from a former consultant, and is consistent with other recent books such as "Execution" by Charan and Bossidy.

Strategy covers how Gerstner came to the belief that IBM should not be broken up. This was in contrast to the spinoff frenzy of the times, and came from his view as a former customer that the market needed someone to pull all the technology pieces together, and that was IBM's only competitive advantage. The strategy is covered in business terms accessible to people outside the industry.

Perhaps the biggest "Aha" in the book is the story of Gerstner battling the legendary IBM culture. This is covered in the Culture section, along with his stories of how he tried to insure that his changes are permanent. The importance of this culture change is highlighted in Gerstner's pride that his successor is a blue bleeding IBM life. (Ultimately Lou admits that even after 10 years he was still an outsider)

The lessons learned and observations sections are less a narrative of the IBM turnaround, and more lessons on turnarounds in general, and the computing industry. For students of management, this will hold the most value.

There were two downsides of the book. First is coming to grips with some of the inconsistencies in the methods used to turn around IBM. For a while, Gerstner rails against processes, instead challenging people to focus on customer needs. While reading it, one wonders how a complex organization can integrated many businesses without good processes. Later on Gerstner extols the virtues of his re-engineering project, especially along several key processes vital for turning around IBM. Makes sense, but contradicts his earlier writing.

The other downside is answering why IBM needed an outsider to change it. Gerstner points out several times that IBM was a great company that just appeared stuck in some bad behaviors. Current management wisdom holds that insiders are better turnaround artists than outsiders. Why is this the exception that proves the rule? Is modesty the answer? (It is generally left to the reader to assume that a customer's viewpoint was needed)

I would not let these detract from what was otherwise an interesting (and overdue) story of one of today's great turnarounds. The material comes straight from the source (as compared to the story of Ghosn's turnaround of Nissan) and from an individual of much higher personal integrity than Sunbeam's Al Dunlap.