You think IBM is on a concerted campaign to paint itself innovative? Two recent interviews with IBM executives here and here about innovation. IBM’s campaign about CIO as Chief Innovation Officer. Its Global Innovation Outlook survey. Now Steve Hamm of BusinessWeek interviews Sam Palmisano, CEO of IBM – on innovation, the view from the top.
Steve is clearly deferential to Sam, but I found myself shaking my head at a number of statements:
“…the opportunity is there to take advantage of the fact
that we have low-cost transistors, RFID tags and supercomputing that is
inexpensive and pervasive” Sam, that is less than 10% of IBM’s revenues. The
rest is made up of overpriced software and services which is actually
holding back IT budgets from investing in innovation.
“But with product innovation, it’s a certainty that your competition is shortly going to copy what you have done” Explains IBM's strategy of letting start ups take the risk and invest in R&D and innovation, then acquire then. But is that innovation?
“…the next step to drive productivity is we’re going to
globalize IBM”. One of the best known brands in the world. The one a prideful
Indian government kicked out to make a global statement back in 1977. Just now
talking about globalization? Or is it customers have caught on that IBM is
global but not passing along global economics?
“If the CEO doesn’t give people permission to go change behavior and to collaborate, then it’s not going to happen. Everyone is looking for a signal”. Sam, you want to send the right signals - change your 10-K. You spend $ 4 in SG&A for every dollar in R&D. You spend only 7% of your revenues in R&D, one of the lowest in the technology industry.
You really want innovation? Encourage the engineers and the open source coders who work in blue jeans. Put the PwC partners you acquired and your sales people in their blue suits in the back seat.
