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Lou Gerstner. I’m sorry to hear of the December passing of IBM’s former CEO. I was lucky to join IBM as a graduate school co-op a couple of months after he did. What none of us knew was how the transformation he engineered still has people talking long after he retired.
Whether you’re a startup CEO or a COO of a mid-sized company, several of the insights and lessons he taught inform how I think about running a business, and how you can too.
Marketing Matters
When I joined, marketing didn’t exist. The 80+ year-old company relied on marketing reps to sell the products. However, that strategy no longer worked because the company no longer understood what its customers wanted, distributed technology instead of a mainframe, or how to segment its customers.
He taught the company that marketing is the tip of the spear for understanding your customers. Working on various marketing projects taught me to listen deeply to the multiple layers of customers’ challenges and fears. This meant going beyond just understanding the competitors to reveal the gaps and opportunities to build a strategy around that drives results. It also means that when things fail, pivot and turn it into a learning-and-experimentation process.
Storytelling Matters
In a high-complexity environment, customers were frustrated trying to put the pieces together to make sense of the new world. Gerstner built a story that explained to customers, employees, and the world how IBM delivered “Solutions for a Small Planet,” which later evolved into “e-business On-Demand.” Customers now had clarity about the internet’s impact, prompting competitors and businesses to create their own “on-demand” stories, products, and solutions.
Whether I built an internal business case to enter a new market or convinced a team to reinvest in marketing for a mature market, the stories behind the investment explained the investment. For a nonprofit struggling to meet its fundraising target, it needed to persuade the community their impact counted. Storytelling enabled them to create a connection and make their target.
Growth Matters
As the company regained its footing, Gerstner was very focused on finding new growth markets. One of those was small and medium businesses, because an executive told him, “SMB was the place to be.” Gerstner leaned hard into it and kicked off multiple initiatives to drive growth because he knew cutting costs alone, while necessary, wasn’t enough get a company to grow.
When I moved from sales back into marketing, I worked on a host of global SMB growth initiatives, from CRM and business partner processes to developing a multi-year expansion strategy for small businesses. The key thing that stuck is that growth looks different for each market. Frameworks and processes are critical for determining how to scale the business. Without them, you’re rudderless.
Post-IBM
Years after Gerstner retired, he continued to wear IBM blue. Asked to speak at a public sector event, it turned into a standing-room-only affair. Attendees and competitors alike hung on his every word. Later, he stopped by the booth and engaged with the employees and the forward-leaning technology there.
I’m thankful for the opportunity to have worked for IBM and the lessons learned during the Gerstner era. My thoughts and prayers are with the Gerstner family and IBMers.
