IBM 100 Years
June 16, 2011 by USA Post
IBM 100 Years, One hundred years ago, the company made the punch cards, scales and clocks. Today, its supercomputers can beat the champions of human chess or solve intricate business problems.
The company is IBM. And now Big Blue joins the exclusive club of companies that have survived 100 years, a rare feat achieved by constantly adapting to the turmoil of the recessions, technological changes and CEO succession.
Do not make the mistake of thinking that IBM is a company veteran who has just seen the technology evolve. It has been at the forefront through the decades and the tops of several of his rivals squirt in some respects.
Perhaps the most quantifiable characteristic is the value investors place in the company: $ 197 000 000 000. That makes the company the fifth most valuable IBM U.S., just behind Microsoft and 200 billion and well ahead of Google and the 162 000 000 000.
IBM Entry to the club of U.S. companies to see your 100th birthday is a milestone in the history of business. “It is the predominant pattern of firms over time of self-destruction,” says management expert Jim Collins, author of books such as Built to Last, studying the longevity of the company. The companies that survive 100 years or more are “a panel and thin.”
The numbers show how rare it is. From the pool of more than 5,000 U.S. companies traded, 486 have 100 years or more – excluding subsidiaries operate – according to ananlysis by Standard & Poor’s Capital IQ for the U.S. TODAY. And only 23 private companies in the U.S. with the audited financial statements are 100 years or more, Capital IQ, he says.
Many of the companies known to have lived for 100 years or more are the stalwarts of American business, including ExxonMobil, General Electric and Chevron. However, others such as industrial gas provider Praxair, McKesson Company supply medical and chemical company PPG Industries, may not be household names, but have served to niche industries for over 10 years.
Staying on top of any industry is a fact. However, the addition to the performance of IBM is the fact that it is one of the only major U.S. Company’s information technologies to become a centenarian.
Trends in technology are moving so fast and many companies in the industry tend to increase at a rate only to flame out – beaten by younger rivals only to end up in the trash bankruptcy or meat purchase. But while the rate of change in technology makes the longevity of a challenge, IBM demonstrated a strength shared by most of the 100 year old business: the ability to change.
IBM’s legacy as one of the most enduring companies in the nation was not a guarantee. It has risen and fallen in recent years, riding the rising popularity of the typewriter, which gave way to personal computers and the Internet. But through a strange mixture of ingenuity, perseverance and a strict adherence to its basic objectives as summarized in the slogan, “Think,” IBM not only survived the Depression and several recessions, but technological change and intense competition as well.
Throughout its 100 year history, IBM has backed the introduction of new technologies, from time clocks, scales butcher and coffee grinders, punch card machines and typewriters, tape storage, mainframes and personal computers, to acquire the consulting arm of PricewaterhouseCoopers, and now the smart social media, said Jon Iwata, senior vice president of marketing and communications at IBM. “We learned from our history, (roll with the changes) in the world, as economic crises and wars,” said Iwata. “In crisis, we have learned to invest more, acquire other companies and increased R & D, for example.”
“This is not like the auto industry, where there is still fuel engine, or oil in many parts of the business are the same,” said Iwata. “We have to put aside what we have invented. We stopped making typewriters, punch card machines, PCs. We had to move on.”
IBM’s resilience is an inspiration to many companies that aspire to the test of time and join the corporate garbage full of large companies whose founding ideas faded with time.
Some fundamentals of long-term success:
IBM is a classic example of a company that had to enter entirely new businesses, not turn our backs on what to where, say Collins. Taking into account what is IBM’s mission is not about computers or technology. This is to allow individual employees to create ways for customers to solve operational problems, says Collins. If this is a better job with scales, typewriters or computers, no matter, what matters is that customer needs are answered, says Collins.
IBM lost its customer focus in the 1990′s to the point that many thought Big Blue was convicted, says Collins. The dependence of the company in sales of mainframe computers, a technology largely being replaced by less expensive personal computers, it seemed the end of the line of IBM. But after Louis Gerstner arrived as CEO in April 1993, managed to save the company from ruin in large part on the understanding that if IBM kept its focus on customers, the core could survive, says Collins. Gerstner reversed the company’s plans to break into several pieces; the recognition that corporate and government clients wanted a large technology company like IBM to do business.
Gerstner changed IBM from a computer giant stretched thin paper flapping in the 1990′s to a world class provider of IT services, a project to its success ever since. “Every market will change over time, especially in the dizzying world of high technology,” says Charles O’Reilly, professor of management at the School of Business at Stanford University who has written a research paper on how to adapt IBM regain its dominant place in the technology industry.
Companies that last almost always put money making ambitious secondary to broader and more ambitious, says Vicki TenHaken, a management professor at Hope College who has studied companies reach their 100th birthday.
Large companies have maintained long-term goals for their employees motivated through the decades, she says. Merck (120 years), for example, has had a stated goal of improving human life and to measure business success by their ability to defeat the disease, TenHaken says.
Much of IBM’s initial success came strong internal goals to push the limits, defended by its first leader, Thomas J. Mr Watson, who coined the company motto “Think”. Genesis of the company was a merger of three small businesses located in three different regions: New York, Ohio and Washington, DC Watson was the mission of the combined company, first called the Computer-Tabulating-Recording Co., which guide below, and continues to guide.
The same often is a blow against big business – its reluctance to make big bets on unproven companies – is a secret of his longevity, TenHaken says. Hundred years old, companies usually have the new business of kitchen research laboratories and are constantly looking for future business. Innovation is a prerequisite for survival. However, these companies do not pursue science innovations crazy or desperate in any way, but “do it very carefully,” he says.
At 3M, for example, employees are encouraged to spend 15% of their time on side projects. Some of these projects will become big business in the future, but the company plans carefully.
Clinging to the market a new invention or magic that will fix their business, in fact, is a hallmark of a company plummet to destruction, says Collins.
IBM, for example, has been building a company to develop data processing technology to help reduce city traffic, pollution and crime. Gradually it has invested 14 billion and the purchase of technology companies, making the software to make this a business. “It is a key commitment for us,” as more of the world’s population lives in or near urban centers, said Mark Cleverley, director of the most intelligent of IBM strategy.
As long-lived companies do not take risks with their business savages, who carefully protect there finances well. These larger firms often have huge capital requirements and extended operations, however, resist the temptation to load on debt. Certainly, these companies may lag behind the return on debt-laden rivals from time to time, but in the long run, firms tend to earn more money than their peers, TenHaken says.
IBM takes about 95 cents for long-term debt for all and an investment in the business of investors, according to Thomson Reuters. That’s well below the 138 and debt for every dollar of shareholders’ money invested in the average company in the S & P 500.
Being financially conservative company allows greater reward investors’ patience and loyalty as it weathers the good times and bad. IBM payments of dividends to shareholders, for example, have increased steadily over the past 100 years, despite some large cuts in the 1990s, says Ken Winans, historian and director of the investment market Winans International.
While IBM has continued many of the winning combinations has not been infallible. In addition to its problems in the PC industry because it finally gave the business to China’s Lenovo, which is also famous developed – but could not capitalize – the first commercial router, which directs network traffic and is one of the main innovations age of the Internet, O’Reilly said: “Only the leg.”
However, IBM has accumulated more wins than losses. And the company continues to use its slow but steady turn interesting approach to technology tools that can help customers large, often behind the scenes. For example, while social media sites Twitter and Facebook are hot now, IBM’s social media activity goes back to the 1970s, when mainframe programmers began its online discussion forums on mainframes.
In 2007, IBM launched its own social networking enterprise software called Lotus Connections. The following year, IBM opened its Center for social software to help IBM’s global network of collaborating with researchers resident companies, university students and teachers.
In many ways, the constant search for IBM to do what is best is the symbol of what makes companies last.
“Innovation is applied to business, technology and all forms of operation (IBM),” said Bernie Meyerson, vice president of innovation at IBM. “We are here because we are innovators. Would not be here if not for her.”
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