Last month, the CMO of IBM announced the elimination of working remotely for the company’s marketing department. If you were one of the unlucky distant workers, you were suddenly seeking new employment.
IBM’s CEO has discussed how the company is restructuring its business to increase profitability by becoming an agile company. One of its objectives is to foster innovation by having everyone move back to offices. Some suggest that IBM is seeking to increase innovative collaboration from the water cooler effect. Studies have shown that individuals are more likely to share ideas when standing around in the kitchen taking a break.
The problem with this theory is that bringing people together into an office does not instantly create innovation. What if the innovative employees were the ones living in the smaller cities and the less creative ones happened to live in the city.
Randomly selecting individuals by geography to remain on the marketing team appears more like a decision to cut cost than to create a “Steve Jobs” atmosphere. Granted I am not privy to information on which employees were offered incentives to stay. On the surface, the decision is counter-intuitive to innovation.
We constantly refer back to Steve Jobs. Why, because he was and will be one of the world’s greatest visionaries. Whether you agree or disagree with his methods, he had a vision and was brilliant in the execution.
IBM is a scientific development and research company. The company is gifted in developing technologies, many of which, we use today. In today’s rapid moving digital economy, companies no longer have the luxury of time.
I believe the restructuring of the company and its departments is the canary in the well, IBM has to find a path to profitability or it will not survive in the digital economy. Even though the company appears large, its market capitalization is smaller than its competitors.
When I think about IBM, I think about the last time I was in a Best Buy. When you walk in the store you are there for one or two reasons nothing else. Looking around, it appears as a graveyard of soon to be obsolete technologies or products. Everywhere you look, the company seeks to gain some profit from products that have lost their market share.
IBM is operation in much the same fashion, there are several highly profitable practice areas and then the rest of the company is holding space in its relative market.
If these latest employee cuts (layoffs) do not work or if management cannot find a way to monetize its latest technologies where are cutting edge. The company will remain stuck, unable to move forward and catch up in the market.
To building a sustainable business in our new digital economy requires more than being innovative and having everyone camped out at the office kitchen sharing ideas. CEO’s, management, and employees must think completely different.
Complacency is the biggest risk to companies today.
The digital transformation is cleaning house, companies that were inefficient and lacked a sustainable vision and purpose will have a very difficult time competing.