Leveraging IBM's Technical Strengths
A Conversation with Nick
Donofrio
IBM's senior vice president for technology and manufacturing talks with
Robert Guernsey, president of the IBM Academy for Technology, about
challenges and opportunities in the marketplace and new approaches to
attracting and retaining world class talent.
What do you see as your primary mission?
DONOFRIO: I'm here to help set and lead the technical agenda. That means
keeping the technical community focused and driven; it means helping move
technology through the company faster; it means championing technology that
lives in the clear space and has no apparent home.
Lou Gerstner [IBM's chairman and CEO] says it all the time: our greatest
strength is in our integration. Our most dramatic point of differentiation
among technology companies is that we have the capability of doing it all.
We understand -- and, in many cases, invent -- the things that are going to
continue to change the face of information technology. Having participated
in the first 30 years of the information revolution, I'm confident that the
next 30 years will be just as exciting, and just as revolutionary. At the
same time, we need to be realistic about the level of effort required to
lead the change.
Over the last five years, we've rediscovered our core strength as a
company. It's in our fundamental understanding of our customers' needs and
in discovering, creating and deploying the technology to help them. Our
challenge now is to play to our strengths, not just as a key participant in
the industry but as the leader in the marketplace. That's going to require
stepping up the pace. We are an enormous company and we must be pretty
nimble if we're going to successfully compete. But I think we've
established the perfect environment to do that. The strategies are set and
the pieces are in place. If we, as a team, can now execute with precision,
we'll be successful -- very, very successful. Our people are hungry to lead
again, and I believe we can do it.
Research has changed in the '90s. There appears to be an increasing
emphasis on customers and bottom-line results. Are you satisfied with the
balance we have now between near-term and long-term research?
DONOFRIO: I don't think we should ever be completely satisfied in an
industry predicated on change. Are we getting better at the balance? Yes,
and I give IBM Research a tremendous amount of credit for reinventing
itself and continually seeking to strike the optimum balance.
It's not simply the near versus long term, though. It's a difficult
balancing act in many dimensions. Fundamentally, the question comes down to
where we want to place the big bets -- what's going to be important in the
marketplace and what's going to be important to IBM. The possibilities are
infinite, but the resources are not, so difficult choices must be made --
sometimes long before we can comfortably predict a payback, determine when
it might occur or imagine how big it will be.
Our copper chip work is a good example: the technology is finally there and
it's important stuff. It took decades to get there, and there were times
when it looked like we might not get there at all. Was it worth it? Yes.
And not only did we get there, we got there first.
Turning to software for a moment: IBM has the world's largest cadre of
Java programmers. What do we hope will emerge from these efforts?
DONOFRIO: In addition to being a wonderful programming language, we all
know that Java is a superb development platform for creating applications
to leverage the power of the network. What's lacking is a much greater
server-centric Java capability. That means making it more scalable,
reliable, predictable, available and competitive in terms of performance.
That's what it will take to fulfill the network computing and e-business
vision we've been articulating. Research clearly understands that and is
working hard with its partners throughout IBM and the industry to bring
that about.
Above all, though, Java is about openness, the ability to run on any
computing platform. Not only do we clearly want this environment to
continue to be interoperable, but our customers are telling us they will
pay a premium for interoperability. We're not there yet and obviously one
size will never perfectly fit all. But Java is clearly the leading
candidate for
realizing those fundamental goals.
You say one size won't fit all in the software world. Do you see any
possibility of convergence toward a single hardware architecture?
DONOFRIO: I don't think that's likely or desirable, even if it were
possible. Technical people know that things are optimized for specific
reasons -- to increase productivity, shorten time to market, support
globalization, enable higher levels of integration. Customers pay for that,
because that's what's going to help their businesses become more
competitive. A single architectural platform might help in one area, or in
one segment of the market, but not in another. Over the past couple of
years, it's become clear that the market is continuing to segment itself.
We're watching another real-time segmentation occur in the emerging world
of information appliances and pervasive computing. It's a mistake for
anyone to think that it's just the desktop in a different form. It's really
a new and very different big idea. That's what makes it exciting.
We've heard a lot of talk lately about "knowledge management" -- a new
term used to describe the exploitation of a company's intellectual assets.
What is IBM doing to lead in this area?
DONOFRIO: You've hit on an important -- and exciting -- emerging area here.
Information technology today is no longer just about computing. As an
industry, we've moved generations beyond fast number crunching. We're
moving now from simply looking at data to looking at, and managing,
knowledge. Knowledge management is about capturing information, sharing it,
deriving value from it and making smarter, faster business decisions as a
result. The critical pieces are in place today. We have the processing
speed, the data storage and mining tools and, through the Internet, we have
a mechanism for moving and managing knowledge throughout the enterprise.
But knowledge management as a technology focus is still in its infancy.
Lotus is doing a lot to lead the industry, and IBM has made a significant
commitment to it. Our Global Services division has created an intellectual
capital management tool that it's using to capture and exploit the
knowledge and insight gained from individual customer engagements. In many
areas, the reengineering projects we've undertaken are starting to pay off
similarly, in terms of how we now develop products. We are looking at how
to deploy knowledge management throughout the enterprise. Our customers
tell us it's an area they are vitally interested in and it's an area where
IBM is making a significant commitment.
Finding and retaining world-class experts is a high priority at IBM, and
we know it's a personal passion of yours. What special steps are we taking
to attract and retain the best technical people?
DONOFRIO: It's a crucially important issue. Our company distinguishes
itself on its intellectual assets, and those assets are generated by the
creativity of our technical people. Our employees are the lifeblood of the
corporation. There's just no other way to say it.
We constantly benchmark ourselves against the best technology companies and
research laboratories in the world. It's obvious that we must offer
competitive compensation, but that's not enough. We must also compete in
terms of offering an environment that inspires people and empowers them to
create. After all, that's why they're here. And, of course, we've got a
very aggressive recruiting program in place. Many people were astounded to
see IBM recruiting on the Florida beaches during spring break. But that's
where the students are, so that's where IBM went. Of course, we also have
the more traditional tools in place. In particular, Research has always
done a superlative job of recruiting Ph.D.-level talent from the top
universities throughout the world.
Public recognition of our success helps, too. The fact that for the past
five years we've been number one in the world in patents tells people that
creativity is obviously alive and well at IBM. And, of course, we've had a
number of highly visible successes, such as Deep Blue, the copper chip
breakthrough, our leadership in silicon germanium, speech technology and
giant magnetoresistive recording technology. Anyone who looks at these
developments has to realize that the future of technology is being invented
at IBM. People who want to contribute to the revolution want to come here.
That puts us in an enviable position to compete for talent.
Another important tool for us is the Technical Leadership Council, which
Lou has asked me to chair. It's a high-level group of leaders from throughout IBM who are working to identify and address key issues affecting our techn
ical community. We want to build a stronger sense of community among our
technical people. And although we think we're among the best, we still want
to do an even better job of attracting, retaining, rewarding and developing
the technical leaders. Additionally, we're striving for stronger
organizational capability worldwide, and that includes our Fellows program,
our distinguished engineer program, our senior technical staff program, as
well as certification programs in services, the Industry Solutions Units
and the field.
How does IBM compete for talent against the small technology companies,
where people seem to have a larger role and a chance to own part of the
business?
DONOFRIO: It's important to realize that in any industry some people are
drawn to smaller companies. There will always be people who are simply not
going to want to work in a company of our size, but over the past few years
we've found new ways to feel smaller while still taking advantage of our
breadth and strength.
Most of our employees work on teams that can leverage the enormous breadth
of IBM to achieve their goals. Some of those teams may look and feel like
start-ups, but they've got resources and that can be very important. One of
the first things I hear from friends who have left the company is, "Oh, I
didn't realize that I was going to be the only person here who knew
anything about my field of expertise." They suddenly discover that there is
no colleague to call,
no research, no development, no overseas
organization. It's not a question of how deep their bench is; there often
is no bench at all.
We've got a wealth of knowledge inside the IBM company. If you don't have
the answer to your problem, there's always somebody to ask or brainstorm
with. And there are communities here, like the IBM Academy of Technology,
that are working to make it even easier for people at IBM to ask for help
at any level.
It's important to realize that while there are benefits to being large, we
must continue to learn from our entrepreneurial competitors. One of the
things they do well is foster a feeling of ownership. That's important.
Here, too, IBM is prepared to compete. This year we will put stock options,
equity ownership, into the hands of more people than ever before -- and
we're paying particular attention to our technical people. In addition to
expanding the use of equity, a significant portion of our compensation
today is in the form of variable pay and is tied to how well people help
the company achieve its objectives.
Will it be enough to satisfy everyone's entrepreneurial ambitions? No, it
won't. But it also doesn't entail the same level of risk. For those who
want to enjoy the benefits of both worlds -- the large and the small --
working at IBM can be an unbeatable combination. We not only want the
brightest technical minds in the world, but increasingly we're finding that
they want us. Increasingly, IBM is becoming known as a place where
cutting-edge stuff is going on, and a place where people can make a
difference.
