IBM recently showed an excellent example of succession with the announcement of CEO Ginni Rometty\u2019s retirement and the appointment of a new chief executive.<\/p>\n
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By\u00a0Charles King**<\/a>\u00a0| via eWeek<\/a><\/p>\n Executive succession<\/a> is a commonplace business process that reflects elemental truths: market dynamics change, organizations evolve, social, political and economic factors shift. So do people. Executives who possess terrific skills for one business era may not be well-suited for another. When that happens, boards of directors look for new leaders who do.<\/p>\n But new leadership is usually a fact of life rather than a problem signal. Most senior executives successfully complete the jobs they were hired to perform, then move on to the next phases of their lives and careers. Such orderly comings and goings also highlight how companies can think further ahead, recognize the inevitability of organizational and individual evolution and fully understand the value of leaders who are best suited for those circumstances and challenges.<\/p>\n IBM offered an excellent example of dynamic with the recent announcement of CEO Ginni Rometty\u2019s retirement and of the elevation of SVP Arvind Krishna to the chief executive role and SVP and Red Hat CEO Jim Whitehurst to president of IBM.<\/p>\n Let\u2019s consider this process and how IBM\u2019s succession process reflects its current condition and future-focused strategies.<\/p>\n Though there are endless variations of leadership and management styles among CEOs, most fall into one of three general classes:<\/p>\n In IBM\u2019s case, its three most recent CEOs exemplify these three approaches. After the company ran off the rails in the late 1980s and early 1990s (the $8 billion loss it posted in 1993 was, till then, the largest in U.S. corporate history), IBM hired Lou Gerstner to essentially transform the company. Gerstner orchestrated a strategic turnaround, cutting costs, emphasizing systems integration and increasing the focus on business and technology consulting services. Those changes restored IBM to financial and competitive health.<\/p>\n In 2000, Gerstner stepped down and was replaced by Sam Palmisano, a traditionalist who had joined IBM as a salesman in 1973 and quickly moved up the management track. Palmisano spent a large proportion of his career in IBM\u2019s Global Services (IGS) group, aligning well with the company\u2019s increasing focus on services. During Palmisano\u2019s tenure, IGS grew into a tech industry powerhouse that consistently drove more than half of IBM\u2019s annual revenues. The company\u2019s 2002 acquisition of Pricewaterhouse Cooper (PwC) was a strategic coup that fundamentally reshaped IBM\u2019s business by focusing on highly reliable and replicable industry-specific services and solutions.<\/a><\/p>\n Ginni Rometty: Balancing transition and tradition<\/strong><\/p>\n Ginni Rometty,\u00a0who succeeded Palmisano as IBM\u2019s CEO in 2012, was an architect of\u2013<\/strong>and negotiator in\u2013<\/strong>the PwC acquisition. But in contrast to the emphasis on sales and outsourcing services in Palmisano\u2019s IBM career, Rometty spent her first decade with the company in technical positions before becoming GM of IGS in 2000. Along with overseeing the PwC deal and integration, she was one of the IBM executives who authored the \u201c2015 Roadmap\u201d strategy that outlined how the company would shift its focus from data center hardware to emphasize software and services business.<\/p>\n That made Rometty the ideal chief executive to plan and execute IBM\u2019s investments in and transition to new future-focused growth areas. A year ago, IBM\u2019s \u201cstrategic imperatives\u201d (hybrid cloud, AI\/analytics, security, mobile and social) drove over half of the company\u2019s revenues for the first time. In fact, cloud revenues of $21.2 billion during FY 2019 places IBM in a strong position behind only AWS and Microsoft. Google\u2019s recently announced $8.9 billion in FY 2019 cloud revenues shows it trailing a distant fourth.<\/p>\n With the Red Hat deal (at $34 billion, IBM\u2019s largest-ever acquisition) successfully concluded, Rometty\u2019s transitional efforts are essentially done.<\/p>\n Arvind Krishna: The right technologist for the right time<\/strong><\/p>\n Arvind Krishna is an intriguing choice for CEO, in large part because of his deep technological training and background. That\u2019s not to say that previous IBM CEO\u2019s weren\u2019t technically savvy (Rometty, for example, has a B.S. degree in computer science and electrical engineering, and began her career at IBM as a systems analyst). But Krishna holds a Ph.D. in electrical and computer engineering, co-authored 15 patents, previously edited the IEEE and ACM journals and has been published extensively in industry and academic journals.<\/p>\n Where Rometty, Palmisano and other IBM CEOs spent considerable time in the company\u2019s services organizations, Krishna\u2019s management roles and responsibilities have spanned areas that include information management and analytics, systems manufacturing and IBM Research. Most recently, he was SVP of Cloud and Cognitive Software, and was also the principal architect of the Red Hat acquisition. In other words, Krishna has played central roles in building the businesses that will be crucial to IBM\u2019s near- and long-term future.<\/p>\n As IBM and the greater IT industry move toward commercializing new and next generation solutions, including 5G networks, artificial intelligence and quantum computing, technologically astute executives will be critically important for assessing and determining their organizations\u2019 ways forward.<\/p>\nThe Three T\u2019s of executive leadership<\/strong><\/h1>\n
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Read here out CEOchat with her<\/a>.<\/h4>\n