Yesterday IBM (chart here) announced it’s most recent quarterly results (read here). The good news was revenue climbed 13% and income from continuing operations rose 22%. This ability to stay in the Rapids is pretty amazing, given that a 10% growth at IBM means adding more than $10B per year. And despite being in myriad markets, the company produces about $260,000 revenue per employee.
A colleague said to me that he wasn’t surprised IBM had this nice growth. After all, they’re in high-tech. I had to tell him I was surprised at his naivete. IBM’s growth was not automatic, nor in any way assured, because of the general industry in which they compete.
Quite to the contrary, many high-tech companies struggle and fail. Remember Wang? DEC? Silicon Graphics? Compaq? Coopers&Lybrand consulting? "High Tech" is full of cutthroat competitors willing to drive you out of business in a heartbeat with suicide pricing and over-exuberant product claims. Don’t forget that IBM itself was on the brink of failure in 1993.
IBM, which walked away from the PC business after inventing it, became committed to mainframes – and to a lesser extent mini-computers – in the 1980s. This worked great until data centers started downsizing due to new techologies – and the floor fell out of revenues. With a change in it’s leader, and a lot of Disruptions inside IBM, the company lessened its dependence on hardware sales as it grew services sales in the latter 1990s. Since then, IBM has deployed an aggressive innovation program that promotes the development of new products and services across the panoply of high-tech. Now, in the face of terrible economic conditions IBM is demonstrating it can maintain growth, even though it is huge, by reaping the benefits from maintaining Disruptions and White Space in many technology, geographic and product markets.
Keeping your organization in the Rapids is not the result of where you’re located (like India or China), or your size (small versus big) or your age (young versus old) or the markets you sell to, or the technology you use, or how much you spend on R&D, or how much you outsource, or "general market conditions", etc., etc. Staying in the Rapids is the result of ongoing management attention to scenario planning, keeping your eyes on competitors, maintaining a willingness to Disrupt and keeping White Space alive and viable. And any organization can do those things – allowing you to grow even when competitors and customers feel the pinch of recession.