Leadership Styles Of Steve Jobs Commerce Essay
Steve Jobs was born on February 24, 1955 in the city of San Francisco. He was born to an unwed graduate student and put up for adoption. Paul and Clara Jobs adopted Steve and were a middle-class family that settled in the Bay Area after the war, which later became known as the Silicon Valley. With an interest in liberal arts, Steve enrolled in Reed College for one semester only to drop out and move to Oregon where he took on more of a “hippie” lifestyle and cultivated apples. In an attempt to find a real job, Steve moved back to California where he began to work on electronics with his older friend Stephen Wozniak, commonly referred to as Woz. Woz had a strong interest in computers and early personal computing. After attending many computer hobbyist meetings, Woz gained the knowledge to build his own personal computer board. Steve Jobs took interest, and he quickly understood that his friend's brilliant invention could be sold to software hobbyists, who wanted to write software without the hassle of assembling a computer kit.
Jobs convinced Wozniak to start a company for that purpose: Apple Computer was born on April 1, 1976. The following months were spent in the Jobs’ garage assembling computer boards for the Apple I, as it was known. However, Wozniak had begun to work on a much better computer, known as the Apple II which would support color graphics. Jobs and Wozniak knew deep down how successful this product could be so they began to seek venture capital. Jobs eventually convinced former Intel executive, Mike Markkula to invest $250,000 in Apple, in January of 1977. Markkula was a big believer in the personal computing revolution and thanks to the Apple II, said their company could be one of the Fortune 500 in less than two years.
In 1981, Steve Jobs became the head of the project called Macintosh, which was a small and cheap pc that was complete with a guided user interface of folders, icons and drop-down menus, and a mouse. However, in 1985 sales began to plummet for apple. Steve Jobs tried to convince the board of directors that the fault was within the CEO, John Sculley, but the board did not believe him. Instead, they sided with Sculley and Steve Jobs was was to have no operational duty with the company. At this time, Steve was devastated and left the company.
In 1986, Steve Jobs bought a small group of computer scientists and incorporated it as Pixar. Pixar became a software company that designed animations and became valued by Disney. In 1995, Disney’s marketing machine for the hit Toy Story went public with the use of Pixar animation and Steve Jobs net worth rose to over $1.5 billion, which is five times more money than what he accumulated at Apple in the 1980s. In 1996, Apple was losing money and the current CEO by the name of Gil Amelio arrived to save the company. Ultimately, Steve Jobs persuaded him to buy NeXTSTEP, which was a company that was producing an operating system, and Steve became a member once again of the company he formed. Unfortunately, Apple lost $700 million in the first quarter and Gil Amelio was removed from the CEO position. Steve Jobs became the interim CEO at this time. He had gotten rid of the old board of directors, and made a deal with Microsoft to settle patent disputes and invest $150 million in the struggling Silicon Valley icon. “The few months after Steve Jobs came back at Apple were among the hardest-working in his life. He reviewed every team at Apple and asked them to justify why they were important to the future of the company. If they couldn't, their product would get canceled, and there was a high probability they'd have to leave, too. Jobs also brought with him his executive team from NeXT, and installed them in key positions” (Moisecot, 2012). Design innovations continued throughout 1998 and 1999. Colored iMacs and the iBook, Apple's consumer notebook became increasingly popular. After three years as CEO, Steve Jobs had stabilized the Apple Company. In 2000, Steve Jobs announced that Apple would use a new operating system derived from NeXTSTEP called Mac OS X, and that he officially accepted Apple’s offer has CEO of the company. Once stabilized, Steve Jobs began to focus on how to make the company’s shrinking market share grow. His response was as follows: “Apple would write software for the Mac to edit and store all the new digital content that consumers created — and these apps would be so powerful, delightful and easy to use, that they would entice PC users to switch to the Mac” (Moisecot, 2012). This included movies as well as music. With the release of the iPod, sales began to rocket for Apple. The iPod dominated the market reaching 80% of all mp3 player sales. This influenced consumers to purchase Mac computers as well, and by 2005 Apples became the preference over PCs. The production of the iPod made Steve Jobs realize that Apple could be the greatest consumer electronics company in the world. Taking it one step further Steve Jobs, after about two years, integrated Mac OS X with the cellular phone. This was introduced in Macworld on January 9th of 2007. This was often noted as the best and most memorable keynotes of Steve Jobs’ career.
As the company progressed, his health started to deteriorate. He was diagnosed with pancreatic cancer. On October 24th of 2011, the day after the introduction of the iPhone 4s, Steve Jobs deceased. His work and brilliant insight as a businessman will live on forever. The leadership tactics that saved a dying company will never be forgotten.2.2 Leadership Style
The leadership style of Steve jobs is a so complex and unconventional that it is difficult to categorize him into one or more specific leadership style.
• A cold and demanding leader
The great development of apple products was a good integral result of his cold and demanding character. According to Jony Ive, Steve Jobs was quick to give opinion and if he didn’t like the idea, he would just tell in front of the employee’s face “This is shit” (Issacson, 2011). In July 1997, Jobs invited Lee Clow’s team to create an ad for Apple and when Clow’s team submitted a version of the text to Jobs, Jobs yelled out directly, “This is shit!” “It’s advertising agency shit and I hate it.” The young copywriter who just met Jobs stayed mute and he never went back. In fact, when he returned to Apple as iCEO in 1997, he was trying to review and cut the product lines of Apple. When he found out that there were so many product lines in Apple and some of them were repetitive and undistinguishable, he even told a group that “not to waste time in such crappy products” In his first year back to Apple, greater than three thousand people were laid off (Issacson, 2011). Another example would be when Apples launched MobileMe, which was supposed to serve as a cloud storage space. However, this device didn’t work well and customers lost data by using that. And Walt Mossberg’s on Wall Street Journal described MobileMe as “Apple’s MobileMe is far too flawed to be reliable.” Jobs gathered the MobileMe team and berated on them. In the biography written by Isaacson, he is quoted as saying “Why the fuck doesn’t it do that?” “You’ve tarnished Apple’s reputation” “You should hate each other for having let each other down.” Immediately, he replaced the team leader with Eddy Cue (Issacson, 2011).In the biography written by Isaacson, he is quoted as saying "If something sucks, I tell people to their face,""It's my job to be honest. I know what I'm talking about, and I usually turn out to be right."
• An unconventional risk taker
Steve Jobs was never afraid to take risk to carry out his innovative ideas. In late 1999, he decided to develop a string of Apple retail stores. At that time, it was considered not a smart idea to open a tech store in the malls or on Main Streets. Because computers were not considered as a frequent purchase for customers, it was not profitable to have stores on Main Streets. Most companies would put their products on the shelves of Best buy or other retail stores. However, Jobs didn’t agree with that. And he believed opening Apple’s own retail stores would be helpful to increase customers’ shopping experience and therefore increase Apple’s sales. Job’s movement was really risk taker especially at that time Gateway Computers were going down after opening suburban stores. Most outside experts also disagreed Job’s decision. They all thought that Apple stores would not last long. A retail consultant David Goldstein said that Apple would shut down its expensive store in two years. Once again, Steve Jobs proved to the world that his courage to take risk turned out to be worthy (Issacson, 2011). Now, Apple has over 370 retail stores in the world and it earns more than $6,000 per square foot of floor space. It is one of the most successful retail stores in the United States (Thoelcke, 2012).
The priority on Job’s mind after he returned to Apple was to make Apple’s business focus. He believed that deciding what not to do is as important as deciding what to do. His focus saved Apple and salvaged the company’s balance sheet. As it was mentioned in this article before, Jobs started to do product review. He found out that that Apple had a lot of versions of the Macintosh and each with a different number. Even Jobs could not understand the significant differences among them after he had the staff explained to him for three weeks. Immediately he decided to cut 70% of them. Some employees reacted angrily, but others were excited because they could finally figure out what they were doing. There was a “The Top 100” retreat program, which was at each year Jobs would go to a retreat with the top 100 employees at Apple. At the end of the retreat, he would ask them what they think Apple should focus next year. After they came down with 10 greatest ideas, Jobs would cross out the bottom three and told everyone they would focus on the top 3.
• A Strong Corporate culture builder
After Jobs returned to Apple, he made a clear and attractive vision of the future for the company. He made an ad “Think different” and right now “Think different” becomes a unique signature for Apple products. Also, he used “customer” “pro” and “computer” “portable” as guidelines and cleared expressed that Apple should focus on these four as for the future. This directly gave Apple a clear vision what the company should focus (Issacson, 2011). And the Apple products today are exactly the consequences of these four guidelines.
Steve Jobs has always been trying to get his team motivated and be creative. He had been putting his effort to build a team with motivation to produce great products in the world and this was even more important than profit (Foroohar, 2002). And his demanding for perfectionism also always drives employees to think different and be innovative. When Steve Jobs gathered his team and announced that he wanted to make a tablet that don’t have a keyboard or a stylus (Issacson, 2011).And his team came up with the idea of multi-touch and touch-sensitive display creative idea. Many of the little functions today of the iphone resulted of Jobs pursue of perfectionism and his inspiration to his team’s innovative: such as “Swipe to Open” instead of on-off switches (Issacson, 2011).
• A controlling leader and perfectionist
Jobs hated to cede control of anything. Apple licensed out the Macintosh operating system to other companies before 1997. When Jobs returned to Apple, he considered licensing out the system violated his principle which was that hardware and software should be tightly integrated. He needed to control the user experience from end to end so that he could control every aspect. Eventually, he terminated the licenses of the cloners (Issacson, 2011). Also, Jobs decided to have Apple’s retail store to control the customers’ buying experience. Although the architectural firm designed the signature stores, Jobs made all of the major decisions. He stayed involved with every detail, even the hue of color the restroom signs should be. Jobs was dedicated to making every wood, stone,steel and glass right. He insisted to get the color right and it had to be a material with high integrity (Issacson, 2011). As for iPhone, when it was almost near completion, Jobs didn’t like the the design of the iPhone. He didn’t like that the glass screen set into an aluminum case. So Jobs pressed the “Pause” button in the iPhone project and revised the design again. His team agreed with Jobs and revised the design to be “a thin stainless steel bezel that allowed the gorilla glass display to right to the edge. (Issacson, 2011)” Fadell, one of the iPhone team said that other companies might have just shipped with the old design; However, Jobs would restart again. From all these examples, we can see that Job’s desire to control really rose from his perfectionism. Besides, Jobs was well known for his manipulative style. He had many meetings from all levels of the firm: executive staff, market strategy session, and endless product report session (Issacson, 2011). He controls every detail about his products and from Joy Story, Apple store, to iphone (Issacson, 2011). Even the color of the floor or the glass of the Apple store needed to be approved by Jobs. Right before the completion of the iphone, Jobs stopped the process because he didn’t like the display of the design. Although his autocratic style, Jobs worked hard to cultivate an environment of collaboration at Apple (Issacson,2011). He preferred different division of the companies, such as engineering, designing, and marketing teams, work together to develop a product at the same time.
A persistent Leader
First of all, Steve Jobs was a highly persistent leader who never gave up and was prepared to face any obstacles in his life. Before the rise of Apple Computers, Jobs and his partner, Steve Wozniak experienced a very difficult time to develop the first Apple computer. Money was such a big issue for them to launch the enterprise. But instead of giving in, Jobs and Wozniak continued their business by selling many of their favorite personal belongings like Volkswagen minibus of Jobs and programmable HP calculator of Wozniak to raise $1300. As a result, in 1976 the first single-board computer with onboard Read Only Memory was produced in the garage of Steve jobs (Coats, 2012).But this is not the only obstacle that Steve jobs need to face in his life; in 1981, an airplane crash that seriously injured Wozniak head forced him to leave the company. And only four years later, Steve quit the company either since a power struggle with the board of directors (Monte, 2011). But a range of setbacks never drained away his keenness. After the left of Apple, Steve jobs still achieved a huge commercial success both by establishing a new computer company known as NeXT and by switching Pixar Studios into a feature film-making powerhouse. Steve’s persistent and never- say- die personality also played a significant role in his team building. He was always persistent to motivate his teams to make a difference and demanded excellence from his teams. It is commonly accepted that his persistent leadership style not only created highly efficient team that achieved a range of revolutionary apple products but also encouraged everyone in the team to better himself or herself, to be A player, and to explore more potential to be successful.
A strong corporate culture Builder
Steve Jobs created strong corporate cultures. First of all, excellent teamwork depends on flat management. Flat management structure is not something new. This management structure indicates that the company can be more productive and efficient by getting rid of many layers of management to encourage direct communication between workers and managers. But Steve jobs establish a flat organization in more creative ways. Steve encouraged not only his team to express their new ideas to higher layer of management directly but also free and convenient communication among team members. That is the reason why most of teams in Apple Company have worked at wide open spaces. He encouraged free expression and communication of ideas and opinions among his teams and allowed teams to come up with the best measures by debating. Obviously, the leadership style of Steve emphasized that the interpersonal relationship among managers and teams and within teams was very essential for company development. The second corporate culture is inspirational motivation. He created a prospect for his teams and made them believe that they are able to turn that vision into a practical reality. Steve jobs implemented such strong corporate culture to establish strong, stable relationships and a sense of loyalty within Apple Company. As a result, the feeling of belonging made teams of Steve Jobs felt that they were an important part of something greater than themselves and had strong incentive to work better.
The personality of Steve Jobs was a combination of real genius with highly flawed character. And his unique personality had significant effect on her special leadership style. He was such a perfectionist that he brought perfectionism into the whole company. He really expected the excellence and perfection to be achieved in every team and in every individual. He always drove his team crazy both to make apple products more user- friendly and to achieve detailed perfection. Because Jobs believed that every parts of apple product must be perfect, even if some parts consumers cannot see. For example, it took six months for his team to develop the scroll bars in OS X that Steve Jobs Satisfied with. According to the Malcolm Gladwell, he describe Steve Jobs as the type of person who needed things to be perfect, and it took time to figure out what perfect was (Gladwel,2011). When it comes to the leadership style of Steve jobs, he set the high bar for his employees to make the most of their potentials and skills. That is the reason why his teams are so efficient and creative that they have always produced life-changing apple products.
A Risk taker
Leadership style of Steve Jobs had been described as a cold, demanding, and even abusive leader. Moreover, the unusually self- confidence made Steve jobs become a risk taker. Steve was a man with considerable insight and unique talents. As a risk taker, Steve Jobs was willing to take on projects that are very revolutionary but also have high risk of failure. Some people believe that his risk taking personality became one of strongest motivator for Steve Jobs to invite more revolutionary technical innovations that other companies would never undertake, or never imagine, such as building the Apple store in the main street of a city and focusing on only few products. Others argue that Steve Jobs was such a risk taker that his leadership style didn’t have completely positive impact on the apple company. However, people have witnessed huge increase in Apple’s revenue comes from His courage to take the risk.
A cold and demanding leader
His cold and demanding character had positive effect on the development of Apple products, but just like a coin, Steve jobs also had two sides. The dark side of his demanding and cold characteristic was also well-documented. He was accused of impatience and nastiness. He is also a perfectionist and sets high standards not only for himself but also for entire teams. According to the report of New York Times, Steve threw out two prototypes of the iPhone before accepting the third within one year (McInerney,2011l) Steve Jobs also paid too much attention on a lot of meaningless and tiny details in the procedure of development, manufacturing, and marketing .Steve Jobs has been harshly criticized for wasting a large amount of revenue to better some details that neither made customer more satisfactory nor increased the sales of products. And his persistent leadership style encourages him to pursue technical innovation so consistently that Steve was always described as a demanding leader.
A controlling leader
Moreover, as a controlling leader, Steve Jobs controlled a range of things from the personal lives of his employees to many aspects of even unrelated to the products. Steve Jobs also established Worldwide Loyalty Team to monitor any suspected leaks. The Worldwide Loyalty Team came up with a range of measures to catch leakers from confiscation of mobile phones to search of personal laptops. On the other hand, Steve Jobs exerted authority over the control of every aspect of the business in order to pursue perfection or excellence. An investigation into the workplace culture of Apple published in May by Fortune magazine found that his control even extended as far as the design of the company bus and the food served at the cafeteria (McInerney, 2011).Obviously, his persistent leadership style is one of the strongest motivator for both his teams and himself to achieve huge success. But on the other hand, all the team had to work hard and under big pressure. People decided to join and stay because they believe the experiences of Apple Company will be more helpful in their future career path, even if they must sacrifice personally life.
Selfish and dishonest
The examination of the interpersonal relationship of Steve jobs shows that he is neither a nice boss nor honest partner. Steve Wozniak, one of the most important partner and friend of Steve jobs, left him eventually. According to the story Steve Wozniak told others, Jobs began to hide truth from him in some years before the production of Apple in a California garage. Jobs and Wozniak were hired by Atari to develop a video game .Wozniak contributed mostly to the development of the video game that worth $5000 bonus, And the company gave the money to Jobs. But Jobs told Wozniak that the payment for their work is only $750, Wozniak ended up getting$375 because he needed split the money with his partner. Steve Jobs was a really talented leader; the creation of so many life- changing apple products is closely related to his exordianary way to manage both people and business. Employees who joined the company are very talented specialists and Steve put them in the position that took the best advantage of their specific skills and talents. Steve also offered his employees so considerate and free work environment that his teams can be more concentrated and express themselves freely. But on the other hand, although the leadership style of Steve Jobs put much more emphasis on the free communication and cooperation, he basically only cared about his own self-interest and abandoned a lot of person who had helped him in his career path. His management style was not based on assumption that top leaders and various layers of management and other specialists in the company should have equal relationship. As a leader of such huge company, Steve Jobs was more like a rock star. He felt more enjoyable to stand on then center of the stage and surrounded by followers who admire him so much.
3. Louis Gerstner Jr.
Louis Gersnter Jr. was born on March 1, 1952 in Mineola, New York. He was an intellectual business oriented person who attended Dartmouth College and graduated with a Bachelor’s Associate degree in 1963. After that, he went to Harvard Business School, where he earned his Master’s in Business Administration (MBA) in 1965.
After 1965, Gerstner joined the Mckinsey& Co. firm where he became a director of management. He remained at this company until moving to American Express in 1978 where he served as executive vice president and head of its charge card business. In 1980, many department stores were not accepting the American Express credit card. As a response to this, Gerstner attacked. Corporations started issuing cards as a more effective way of tracking business expenses. Furthermore, Gerstner created marketing hooks for new cards. The gold card carried an annual fee of $65 and offered a $2,000 line of credit. The platinum card had a $250 annual fee, a $10,000 check-cashing benefit, and private club memberships for traveling executives. Gerstner’s division became the most profitable out of the entire company. After 11 years at this company, Gersnter moved to chief executive officer of RJR Nabisco, a tobacco company. His tenure at this time increased from $8.6 million to $30.7 million.
“At RJR Nabisco, Gerstner earned the praise at the executive level for steadying a company that previously lacked financial discipline” (Tim Halpern, 2012). Gerstner’s tactics was getting everybody in the division on board with a strategy, and then implementing that strategy without micromanaging. In total, Gerstner spent only 4 years at this company. In this time, he helped increase market share by pushing more aggressively into the low-end cigarette market, which seemed to be in higher demand. This strategy proved to be successful. As pricing wars between tobacco companies rose, and lawsuits increased, the company started to take a turn for the worst, and Gerstner went to his next corporation.
Gerstner became chairman and chief executive officer of IBM in April 1993 as declining sales of mainframe computers led to crippling losses. The year, in which Gerstner was hired, IBM lost $8 billion alone. Initially skeptical about taking the job, Gerstner was persuaded, and believed he could change the company’s performance. Many employees even began questioning why IBM remained in business, but ultimately Gerstner was able to turn the company around.
Instead of disassembling the company into separate pieces, which has been done before, Gerstner decided it would be wiser to keep it as a whole, where he repositioned IBM as a company that would run other corporations’ information technology systems with as much IBM hardware and software as possible. “Gerstner cut long-term debt from $14.6 billion to $9.9 billion and boosted IBM's share price from less than $140 to $168” (Tim Halpern, 2012). By 1995, the company stabilized and one year later it had the potential to grow. Gerstner’s contract at IBM was extended five years in 1997. And in 1999, Gersnter was leading one of the most respected and robust companies in the country. “The key to IBM's overall turnaround was Gerstner's decision to take the company away from its roots as a hardware manufacturer and lead it into services, which included everything from consulting on the design of corporate systems to running a company's e-commerce operation. The company's global services unit, which Gerstner started, was an industry paragon” (Tim Halpern, 2012).
Gerstner had a tough management style, which was a shock to many IBM employees. He encouraged customers to question the new executive team and called employees with queries, not questions. In return, Gersnter showed his approval through employee compensation plans. Overall, he was an extremely visible executive who kept an active schedule where he remained in contact with clients and employees.
Gerstner resigned in 2002, and became renowned for his turnaround of IBM. With an interest in current trends in teaching styles, cancer research, and further education reform, he contributed to efforts to better the lives of others. In recognition of these efforts, on behalf of public education and for his business accomplishments, Gerstner was designated honorary Knight of the British Empire by Queen Elizabeth II in June of 2001. In January 2003 Gerstner assumed the position of chairman of the Carlyle Group, a global private equity firm located in Washington, D.C. Here he plans to continue his duty with the company, and plans to contribute further to education reform and cancer research.
3.2 Leadership Style
• Coldness and Toughness
Louis Gerstner wanted to see results and had no time to care about courtesy or being polite. The executives were first confronted a chief executive who was as what they described as “rough-and-tumble”. Before Louis Gerstner entered IBM, the IBMers already got very used to the gentlemanly and polite management style at IBM, which was an environment which filled with consensus. (Slater, 1999) When the results were good, the congenial executive would say “Thank you very much.” Even when the outcomes were not good, the evaluation the employees would hear from the top was still “Thank you very much; we know you tried your best” (Slater, 1999). Lou’s Gerstner was the totally opposite. He made it very clear to the IBMers that “Get the job done or you are out”. IBMers no longer enjoyed a job for life. In July 1993, he laid off 35,000 employees at one time (Slater, 1999). Louis Brother,Dick Gerstner, was in the consulting business at IBM in 1993 and was laid off by Louis later. People might say that Louis was so hard-hearted and tough that to sell his brother off to show his determination. But Dick knew that he was ill and didn’t work much for the past three years so he knew that it made sense for him to leave IBM (Slater, 1999). Harsh, excessive, autocratic, and dictatorial were the words that some IBM executives used to describe Louis Gerstner (Slater, 1999). Louis Gerstner knew that it would be very difficult to change the “consensus” culture of the IBM and establish a new “entrepreneurial” culture. The culture was already so deeply embedded into IBM and Louis Gerstner was just the new kid on the block. Despite these truths, he planned to be an activist CEO and he would not let IBM’s eighty-year-old corporate culture get in his way.
• Lead as a role model
Gerstner is leading as a role model. For example, when he tried to change the culture of IBM, he knew that he could only do that by starting from himself. He said “If the CEO isn’t living and preaching the culture and isn’t doing it consistently, then it just doesn’t happen. This is a sine qua non-this is not a sufficient condition, but a necessary one.” So as we mentioned in this article before, he changed the culture from being too easily satisfied to demanding results. And as a result, some IBMers started to follow. Richard Thoman was assigned to revolute the PC division by Gerstner. Thoman fired one product manager who did not carried out his performance (Slater, 1999). Also,Gerstner implemented a new policy, which was to tie executive pay and stock options to IBM’s overall performance and therefore to force managers to focus on businesses. For example, he would require member of the Corporate Executive Committee had to own stocks three times their annual base salary and bonus and even expanded IBM’s stock option program to nonexecutives. Gerstner was not just implementing the policy, but also actually leading as a role model: he owned the stocks of IBM four times his annual base salary and bonus (Slater, 1999).
• Vision for the IBM(Inspirational motivation)
Gerstner knew the importance of setting a vision for the future of the company. When he was at American Express in 1985, he said that: “You have first to decide what kind of a company you want to have. If you don’t have a vision you believe, you can’t achieve it People won’t just believe you and you won’t communicate it effectively in everything you do.” So, from the time Gerstner was appointed to be the chief of IBM, the press had been speculating what vision Gerstner would set for IBM. However, this time, he believed that he needed to go slow with setting the vision. Because he found that there were more problems to tackle with than coming up with blueprint for long-term growth. He said that it’s time for IBM to perform and then talk, instead of talk and then perform. During one press conference in the summer of 1993, he announced that “the last thing IBM needs right now is vision” (Slater, 1999). When it was clear to all that the company’s life-or-death crisis was over, Louis Gerstner knew that he needed to set a clear vision of IBM future for the IBMers because they were so illured in IBM’s past gold age and didn’t spend time to look forward. Gerstner proposed e-business as their Moon Shot. This proposal helped IBMers answered the question that “What do we want to do in the future?” Afterwards, IBM incorporated e-business into every part of their business (Gerstner, 2002). Gerstner believed that “sports team can score if the players don’t know what play is called.” If everyone has to think about what to do before acting, then confusion and ineptitude are inevitable.” Gerstner emphasized the importance of setting up a vision for the employees (Gerstner, 2002).
• Reward teamwork and efficiency
Gerstner straightly pointed out that the competitors are outside IBM and he developed a culture of cooperation inside IBM. So Gerstner tied employees’ compensations with the whole performance of the whole company rather than the division. Also, Gerstner believes that efficiency is very important and too obsessive into perfectionism is not necessary.
• Focus and Passion
It is very interesting to point out that in Gerstner’s Book Who Says Elephants Can’t Dance,Gerstner listed the attributes and abilities that took to run IBM. Energy, Organizational leadership, Marketplace Leadership and Personal Qualities were all on the list. Passion was one of the important Personal Qualities. Gerstner said that he would never have guessed that passion would be the single most important element of personal leadership. When he considered who can succeed him as the chief of IBM, passion was valued high on the candidates’ list of necessary attributes (Gerstner, 2002).
• Effective communication at every level
Louis Gerstner understood that leadership was to radiate self-confidence and to communicate effectively to his employees and to outsiders like the media. Gerstner proved to be a very good communicator. He never asked his communications staff to prepare a draft for his speech, but he could always be able to convince his audience. Also, He realized that it was critical to build a clear and continuous line of communications with IBM employees. He wanted to use open communications and let all the employees have the public acknowledgement of the existence of a crisis. On his first six days after he arrived at IBM, he sent out an email to every employees at IBM. The email was plain, simple, compelling and in the email, he pointed out the problems existing in IBM directly. The reactions from employees were extremely positive and some of them replied with frank, candid and blunt message. This internal messaging system became very critical to Gerstner. In the appendix of his book, he included some emails that he sent to his employees. One of the most frequent themes of his letters to IBM was about the culture. He had been strongly using his effective communications to implement the changes of the culture in IBM (Slater, 1999).3.3 Advantages
A democratic leader
Gerstner was a complete outsider of computer technology when he accepted the CEO position at IBM in 1993. However, it was this outsider who brought about significant changes at IBM and created one of the most successful turnarounds in business history. How did Gerstner achieve that? He did it by being democratic. Gerstner took advantage of democratic leadership style, turning to employees and colleagues for advice. When Gerstner recalled the difficult days at IBM, he said: “that I was getting some good advice from my colleagues who knew a heck of a lot more about I.B.M. and this industry than I would ever know.” (LOHR, S. (2000, 07). Compressed data; i.b.m chief gerstner recalls difficult days at big blue. Retrieved from http://www.nytimes.com/2000/07/31/business/compressed-data-ibm-chief-gerstner-recalls-difficult-days-at-big-blue.html)
Gerstner also built an effective communication network at IBM. He used emails to connect with employees at every level. His democratic leadership skills created solid connections within IBM, facilitating team building and culture forming. And by closely communicating with all employees, Gerstner was able to know what was happening around IBM and therefore influence the work performances.
A visionary leader
Like all other great leaders, Gerstner was a visionary. When Gerstner arrived at IBM in 1993, IBM was at the blink of death. ‘The company’s own management was in the process of allowing its various divisions to rebrand and management themselves – the so called Baby Blues’ ((n.d.). Retrieved from http://en.wikipedia.org/wiki/Louis_V._Gerstner,_Jr.) Gerstner believed that IBM would have competitiveness advantages only if IBM was kept together to retain the capabilities to deliver complete IT solutions to customers. Splitting IBM would have destroyed IBM’s unique advantages. The vision to keep IBM together turned out to be the most critical in making the elephant dance elegantly.
Gerstner’s another significant strategy that changed IBM dramatically was to turn IBM from product-based into service-based. During 1995, Gerstner formed IBM’s new vision – the networking computing. In that year, IBM acquired Lotus Development Corp and the next year acquired Tivoli Systems Inc. Gerstner successfully boosted the services segment at IBM with growth at about 20% per year. (Ibm archives. (n.d.). Retrieved from http://www-03.ibm.com/ibm/history/history/decade_1990.html)
Under Gerstner’s leadership, IBM reestablished itself as a leading information technology innovator.
A coaching leader
As a turnaround specialist at IBM, Gerstner lead the company by motivating and inspiriting. He believed that IBM needed leaders not managers. Anderson said: ‘He’s got to keep the key people there. He’s got to find some inside IBM – people who know where the bones are buried. He’s got to trust them and then get real smart about the business.’ Gerstner searched the talent within IBM and then mentor them personally to become a leader to lead divisions within IBM. Gerstner emphasized on giving employees room to grow, allowing employees the opportunity to broaden skills, and educating employees to succeed.
An affiliative leader
Gerstner was also an affiliative leader. He harmonized the IBM as a whole, facilitated the building of strong relationships amongst teams, and reinforced teamwork. To deliver a complete computer technology solution to customers, different teams which handled hardware and software separately needed to work closely.
This demands Gerstner to be affiliative to keep IBM run in harmony. Gerstner made IBM focus on customers’ need, and this enabled individual units of IBM to position them to fit in the greater picture. Gerstner created a new rank of importance within IBM with the customer being the first, the company as a whole coming second and the individual units being the last. This new order helped unite IBM and drove individual units toward the common goals. (Brown, M. (n.d.). The strategy that overcame and exploited its substantial size. Retrieved from http://www.mcafee.cc/Classes/BEM106/Papers/UTexas/351/IBM.pdf)
An authoritative leader
The severity of problems at IBM when Gerstner accepted the CEO position required Gerstner to be an authoritative leader. Gerstner changed IBM outdated culture and broke down the large dysfunctional bureaucracy. Gerstner abandoned IBM’s traditional dress code, ‘obsessive perfectionism’, and ‘studying things to death’. Gerstner abandoned the OS computer operating system and said OS ‘was draining tens of millions of dollars, absorbing huge chunks of senior management time, and making a mockery of our image’. Gerstner laid off enormous amount of employees to cut costs. IBM’s transformation probably would never have happened without an incredibly authoritative leader like Gerstner.
A coercive leader
During his tenure at IBM, Gerstner used coercive leadership skills to help turnaround IBM. When Gerstner arrived at IBM, he told IBMers that if they did not support change, the company they worked for would collapse soon. Gerstner abandoned the management committee and relayed the news across IBM.
Gerstner drove IBM to be an aggressive technology company by positioning in research and development. In 1977, IBM’s Deep Blue defeated World Chess Champion Garry Kasparov. It was the first time a computer had ever beaten a top-ranked chess player. And Deep Blue demonstrated that a computer could come to approximating human intelligence. (Ibm archives. (n.d.). Retrieved from http://www-03.ibm.com/ibm/history/history/decade_1990.html)
Gerstner abolished IBM traditional lifetime employment policy to push employees to work harder since jobs were no longer guaranteed.
The particular situation at IBM demanded Gerstner to be tough.
Gerstner was also criticized for funding IBM by selling IBM’s assets without creating values. IBM’s airplane fleet and fine art collections were sold. IBM’s headquarters in New York City was put on the block. And IBM’s Federal Systems Company was sold to the Loral Corporation. (Lancu, B. (n.d.). Note critique: “who says elephants can't fly?”. Retrieved from http://www.stephanehaefliger.com/campus/biblio/017/17_36.pdf)
Gerstner had been so masterful a leader who demands far more loyalty from his followers. He was hard-hearted, cold, and tough. As one former IBM manager recalled, Gerstner never called an employee to give compliments but asked ‘what the hell is this?’ (Joe, M. (1997, 04 14). He's smart. he's not nice. he's saving big blue lou gerstner isn't easy to love, but you have to respect him. he's done the job no one wanted better than anyone expected. but will he finish it and restore growth and glory at ibm?. FORTUNE, Retrieved from http://money.cnn.com/magazines/fortune/fortune_archive/1997/04/14/224974/index.htm)
Gerstner was an outsider of technological industry. He failed to address on-going concerns between access types in the public vs. private domain. Issues like on-line shopping, stock trading and personal email were vague and unsupported. (Lancu, B. (n.d.). Note critique: “who says elephants can't fly?”. Retrieved from http://www.stephanehaefliger.com/campus/biblio/017/17_36.pdf)
In respect of selling IBM, Gerstner did it with good reasons. He was the person who thoroughly understood how badly IBM was in need of cash.
Although Gerstner was criticized for being so arrogant and masterful, he was in that situation to be arrogant and masterful. As Garr addressed this issue, he responded: ‘it’s nothing personal. It’s just the way it is. The IBM that Gerstner walked into was a spoiled child of a bygone era in American business. It needed the discipline.’ (Garr, D. (2000). Ibm redux: Lou gerstner and the business turnaround of the decade. (2nd ed., p. 343). New York: HarperCollins Publishers Inc. Retrieved from http://books.google.com/books/about/IBM_Redux.html?id=JM5_lDrmOC0C
Although Gerstner, a non-technical CEO, might fail to address some technological issues during his tenure, he was undoubtedly the right person to safe IBM and his success at IBM was definitely one of the most dramatic turnarounds in business history. IBM’S performance during Gerstner’s tenure was the most will deter anyone to be critics.
- cold and tough
- Teamwork5. Contrast
- Controlling differences between the two
- Gerstner is more risk conservative and Steve Jobs was a risk taker
- Leadership styles are not concrete.
- However, these great leaders shared many traits and styles, which made them effective7. References
Issacson, W. (2011). Steve jobs. New York,NY : Simon & Schuster.
Slater, R. (1999). Saving big blue. New York,NY : McGraw-Hill.
Gerstner, L. (2002). Why says elephants can't dance?. New York,NY : HarperBusiness.
Thoelcke, T. (2012, 11 18). Use today. Retrieved from http://www.usatoday.com/story/money/business/2012/11/18/most-successful-retail-stores/1710571/
Lou Gerstner. (2012). Biography.com. Retrieved 03:44, Oct 25, 2012 from
Moisescot, R. (2012). Short bio. All about steve jobs, Retrieved from
Tim Halpern (2012). www.referenceforbusiness.com. Retrieved
McInerney, S. (2011, 10 07). Steve jobs: an unconventional leader. Retrieved from http://www.smh.com.au/executive-style/management/steve-jobs-an- unconventional-leader-20111007-1lcmo.html
adwel, M. (2011, 11 14). The real genius of Steve jobs. Retrieved from http://www.newyorker.com/reporting/2011/11/14/fa_fact_gladwell
Coats, C. (2012, 2 24). Happy birthday, steve jobs, creator of apple computers. Retrieved from http://www.findingdulcinea.com/features/profiles/j/steve-jobs.html
Monte, L. (2011, 10 6). In memory of steve jobs "rebel, genius, human. Retrieved from http://stevejobstheapplegenius.wordpress.com/2011/10/06/the-apple-museum-steve-jobs/
Foroohar, R. (2002, 02 27). Retrieved from http://www.time.com/time/magazine/article/0,9171,2107005-1,00.html
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