June 12, 2006 10:04 AM PDT

IBM boss spells out a better future

Forget the multinational, says IBM chief executive Sam Palmisano. "Global integration" is now the way to go for large organizations.

Normally taciturn, Palmisano this week aligned himself with those who predict a backlash against large multinational companies, such as IBM itself.

In what the Financial Times described as "a rare public intervention," Palmisano expounded on the theme that to prosper, multinationals need to change and indeed stop being multinational companies.

Palmisano's remarks came less than a week after IBM announced a massive $6 billion investment in India.

In his open letter published Monday, Palmisano called for a new kind of organization. "At IBM, we call it 'the globally integrated enterprise,'" Palmisano said, adding he prefers that term to "multinationals," which many "mistakenly project onto 21st century global reality."

"I believe the globally integrated enterprise is a better and more profitable way to organise business activities," said Palmisano, who went on to outline his plans for this new kind of organization, although he was short on specifics.

Shifting to this model presents big challenges for leaders, Palmisano said. He outlined two such challenges. The first is skills, where Palmisano says the biggest problem will be "securing a supply of high-value skills." Second, is a company's standards of governance, transparency, privacy, security and quality. These need to be maintained, even when products and organizations are handled by a dozen different organizations, he said.

The latter challenge is one that IBM has come across before, such as when executives in its subsidiaries in different parts of the world faced corruption charges over government contracts.

"The alternative to global integration is not appealing: Left unaddressed, the issues surrounding globalization will only grow," Palmisano said. "People may ultimately choose to elect governments that impose strict regulations on trade or labor, perhaps of a highly protectionist sort."

IBM's employees may scratch their heads at this latest intervention from Palmisano, who has overseen a downgrading of their pensions during his time in office.

Palmisano has portrayed himself as the quiet man of IBM. He rarely speaks in public and even more rarely speaks to journalists. When he has wanted to give a piece of his mind in the past, he has used the same technique that he used this time: Talking only to one newspaper, and then with no journalists present.

Colin Barker reported for ZDNet UK.

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That "Palmisano has portrayed...
... himself as the quiet man of IBM. He rarely speaks in public and even more rarely speaks to journalists..."; why does he not speak much more - was he one of the "dudes" that were on the "TET OFFENSIVE" or what! Whis it that he is keeping to himself...
Posted by Captain_Spock (894 comments )
Reply Link Flag
That "Palmisano has portrayed...
... himself as the quiet man of IBM. He rarely speaks in public and even more rarely speaks to journalists..."; why does he not speak much more - was he one of the "dudes" that were on the "TET OFFENSIVE" or what! Whis it that he is keeping to himself...
Posted by Captain_Spock (894 comments )
Reply Link Flag
Oops!
I had forgotten to add; "perhaps, all is being kept quiet so that it will not be known when the shots will be fired over the "ship" from Redmond's bow". WOW - some secret order guy that is good for such missions!
Posted by Captain_Spock (894 comments )
Reply Link Flag
Oops!
I had forgotten to add; "perhaps, all is being kept quiet so that it will not be known when the shots will be fired over the "ship" from Redmond's bow". WOW - some secret order guy that is good for such missions!
Posted by Captain_Spock (894 comments )
Reply Link Flag
Sam is quiet for a reason...
What he says can and will be used against him in future lawsuits by former employees, labor unions, and shareholders. The less he says, the less of an excuse for a lawsuit that will utimately cost millions to defend.

With respect to his "globalization" speech, there is nothing wrong with opening up labs in developing companies to take advantage of cheap labor.
You *do* get what you pay for... and its not a good sign.

Of course when you open a lab in India, and then remove labs from places like the UK, you will face labor issues ...
Posted by dargon19888 (412 comments )
Reply Link Flag
Sam is quiet for a reason...
What he says can and will be used against him in future lawsuits by former employees, labor unions, and shareholders. The less he says, the less of an excuse for a lawsuit that will utimately cost millions to defend.

With respect to his "globalization" speech, there is nothing wrong with opening up labs in developing companies to take advantage of cheap labor.
You *do* get what you pay for... and its not a good sign.

Of course when you open a lab in India, and then remove labs from places like the UK, you will face labor issues ...
Posted by dargon19888 (412 comments )
Reply Link Flag
"there is nothing wrong....
... with opening up labs in developing companies to take advantage of cheap labor.
You *do* get what you pay for... and its not a good sign.

Of course when you open a lab in India, and then remove labs from places like the UK, you will face labor issues ....."; can you justify the retention of the "labs" in "places like the UK" from financial and economic; scientific and technical perspectives; and, from a consumer's as well as a shareholder's standpoint!
Posted by Captain_Spock (894 comments )
Reply Link Flag
"there is nothing wrong....
... with opening up labs in developing companies to take advantage of cheap labor.
You *do* get what you pay for... and its not a good sign.

Of course when you open a lab in India, and then remove labs from places like the UK, you will face labor issues ....."; can you justify the retention of the "labs" in "places like the UK" from financial and economic; scientific and technical perspectives; and, from a consumer's as well as a shareholder's standpoint!
Posted by Captain_Spock (894 comments )
Reply Link Flag
Gee Whiz; Again, "With....
... respect to his "globalization" speech, there is nothing wrong with opening up labs in developing companies to take advantage of cheap labor.
You *do* get what you pay for... and its not a good sign.

Of course when you open a lab in India, and then remove labs from places like the UK, you will face labor issues ..."; on second thoughts - a number of points... one reads where the Japanese are planning to try their "skills" at what was once called the "CONCORDE" which must certainly have been rooted in "labs from places like the UK" and I am still perplexed at the fact that the Japanese are now preparing to better the performance of not only the workers from the "labs from places like the UK"; but, apparently will be outperform the aeronautical and other engineer personnel; and, all the other professional staff that are required to keep an aircraft such as the "CONCORDE" in the air - flying the newly affordable executives and tourists from India to destinations around the world - something that s from the"the worker "labs from places like the UK" (and others from around Europe) were apparently unable to do. Gee Whiz, if some other people from around the world can perform better that your own why not hire them. The proof of the pudding is in the eating! Besides, being concerned about Sam's company opening up a lab in India... if I were you I would quickly open up some language labs in India also to teach those milions upon millions on Indian Nationals who would want to master the usage of the English Language thus guaranteeing the employment of a large number of the worker from the "labs from places like the UK" whose jobs might have been outsourced to India. Last but not least, how about the "labs from places like the UK" show companies in India, IBM and all the hundreds of thousands of companies around the world how to financially, economically; and, scientifically and technically run their companies for a fee. This should something they all will be willing to pay for since it has to be good coming from the "labs from places like the UK"!
Posted by Captain_Spock (894 comments )
Reply Link Flag
Gee Whiz; Again, "With....
... respect to his "globalization" speech, there is nothing wrong with opening up labs in developing companies to take advantage of cheap labor.
You *do* get what you pay for... and its not a good sign.

Of course when you open a lab in India, and then remove labs from places like the UK, you will face labor issues ..."; on second thoughts - a number of points... one reads where the Japanese are planning to try their "skills" at what was once called the "CONCORDE" which must certainly have been rooted in "labs from places like the UK" and I am still perplexed at the fact that the Japanese are now preparing to better the performance of not only the workers from the "labs from places like the UK"; but, apparently will be outperform the aeronautical and other engineer personnel; and, all the other professional staff that are required to keep an aircraft such as the "CONCORDE" in the air - flying the newly affordable executives and tourists from India to destinations around the world - something that s from the"the worker "labs from places like the UK" (and others from around Europe) were apparently unable to do. Gee Whiz, if some other people from around the world can perform better that your own why not hire them. The proof of the pudding is in the eating! Besides, being concerned about Sam's company opening up a lab in India... if I were you I would quickly open up some language labs in India also to teach those milions upon millions on Indian Nationals who would want to master the usage of the English Language thus guaranteeing the employment of a large number of the worker from the "labs from places like the UK" whose jobs might have been outsourced to India. Last but not least, how about the "labs from places like the UK" show companies in India, IBM and all the hundreds of thousands of companies around the world how to financially, economically; and, scientifically and technically run their companies for a fee. This should something they all will be willing to pay for since it has to be good coming from the "labs from places like the UK"!
Posted by Captain_Spock (894 comments )
Reply Link Flag
huh?
[quote] "The alternative to global integration is not appealing: Left unaddressed, the issues surrounding globalization will only grow," Palmisano said. "People may ultimately choose to elect governments that impose strict regulations on trade or labor, perhaps of a highly protectionist sort."
<p>
IBM's employees may scratch their heads at this latest intervention from Palmisano, who has overseen a downgrading of their pensions during his time in office.[/QUOTE]

--- almost as if there's a contradiction in these points... duh!

downgrading of pensions IS an economic reality in the global business world, as France and its ilk will find out, too, let alone the UK.

unions have ramped wages so high in developed countries which could afford them until now, and the global competition is going to blow them right off the face of the planet.

if an equally-educated and equally-skilled person can be hired for $10 an hour [or day?], which Board of Directors in its right mind would argue a nationalistic position to pay its equivalent workers $25 and hour?????! business suicide!

it's the new world reality. get used to it, adapt or die!

remember: protectionist laws helped PROLONG the "Great Depression." ! or have you rewritten that part of history in your minds?

+af
www.plusaf.com
Posted by plusaf (17 comments )
Reply Link Flag
huh?
[quote] "The alternative to global integration is not appealing: Left unaddressed, the issues surrounding globalization will only grow," Palmisano said. "People may ultimately choose to elect governments that impose strict regulations on trade or labor, perhaps of a highly protectionist sort."
<p>
IBM's employees may scratch their heads at this latest intervention from Palmisano, who has overseen a downgrading of their pensions during his time in office.[/QUOTE]

--- almost as if there's a contradiction in these points... duh!

downgrading of pensions IS an economic reality in the global business world, as France and its ilk will find out, too, let alone the UK.

unions have ramped wages so high in developed countries which could afford them until now, and the global competition is going to blow them right off the face of the planet.

if an equally-educated and equally-skilled person can be hired for $10 an hour [or day?], which Board of Directors in its right mind would argue a nationalistic position to pay its equivalent workers $25 and hour?????! business suicide!

it's the new world reality. get used to it, adapt or die!

remember: protectionist laws helped PROLONG the "Great Depression." ! or have you rewritten that part of history in your minds?

+af
www.plusaf.com
Posted by plusaf (17 comments )
Reply Link Flag
Palmisano and Trust
Palmisano's letter is intriguing, coming from a technology company.
For some reason, your article misidentifies the second of two key issues he points to (the first being skills). That issue, he says directly, is trust.
Now that's unusual. The head of global tech company is saying that the key to the future is not better processes, or growth models, or cost structures, or strategies--but trust.
Furthermore, he says "we need new ways of establishing trust based on shared values."

Palmisano is absolutely right. In an increasingly interdependent world where every variable is in play, reliance on impersonal systems and rules is unworkabale.
Furthermore, he is saying that, despite a tendency on the part of webheads to wish so, trust is not scalable without diminishing its scope.
Palmisano is saying the future of global organizations is not going be based on the models of eBay, or Amazon, or mySpace, or Linux; it's going to be based on shared values of human beings. It is only this kind of "high bandwidth" sharing that will work to transcend boundaries.
-Charles H. Green
co-author, The Trusted Advisor
author, Trusr-based Selling
www.trustedadvisor.com
Posted by cgreen23 (16 comments )
Reply Link Flag
Palmisano and Trust
Palmisano's letter is intriguing, coming from a technology company.
For some reason, your article misidentifies the second of two key issues he points to (the first being skills). That issue, he says directly, is trust.
Now that's unusual. The head of global tech company is saying that the key to the future is not better processes, or growth models, or cost structures, or strategies--but trust.
Furthermore, he says "we need new ways of establishing trust based on shared values."

Palmisano is absolutely right. In an increasingly interdependent world where every variable is in play, reliance on impersonal systems and rules is unworkabale.
Furthermore, he is saying that, despite a tendency on the part of webheads to wish so, trust is not scalable without diminishing its scope.
Palmisano is saying the future of global organizations is not going be based on the models of eBay, or Amazon, or mySpace, or Linux; it's going to be based on shared values of human beings. It is only this kind of "high bandwidth" sharing that will work to transcend boundaries.
-Charles H. Green
co-author, The Trusted Advisor
author, Trusr-based Selling
www.trustedadvisor.com
Posted by cgreen23 (16 comments )
Reply Link Flag
 

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