When your company cuts its own throat, you don’t need to cut yours

The Register recently published this article about IBM disallowing remote workers and it brought back a flood of memories.   The article should be titled, “IBM cuts its own throat.” Here’s the key paragraph:

According to well-placed sources, IBM’s Software and Systems unit began a transition similar to the marketing department’s upheaval late last year, with remote workers told they would have to move and work at one of a handful of city offices, or find a new job.

It’s a morale boosting move.  IBM’s chief marketing officer said so.

IBM has pitched all this change to employees as a way to improve the working environment and office culture. In a video message to her troops, seen by The Register, chief marketing officer Michelle Peluso said “there is something about a team being more powerful, more impactful, more creative, and frankly hopefully having more fun, when they are shoulder to shoulder.”

I thought that was satire at first.  But it’s real.  Apparently, workers have 30 days to decide; either move to the city where your team is located or you’re out.

Imagine working for a company, year after year, pouring time and emotional energy into your job, only to wake up one morning to find you have 30 days to either move across the country or quit. The beatings will continue until morale improves.

And that sums up why I have such a deep distrust of all big organizations.  It’s just plain wrong when a disconnected manager with a spreadsheet disrupts thousands of lives and hammers shareholders in the same move.

Death Spiral

Way back around 1993 or so, the company where I used to work was going through its own death spiral.  The weather was bad here one day, and traffic was backed up all over town, especially crossing the river that separates where I live from where I used to work.

I tried every river crossing between my house and the office.  They were all parking lots.  So, I turned around and drove back home.

I had a terminal. Yes, a real DEC VT220 terminal, and modem, and I dialed into work and started getting things done. There was a customer crisis and I talked to people over one phone and talked to computers over a modem on the other phone line. I kept right on working and next time I looked up, it was 5pm and time to go home. Except, I was already home, and I realized it was a productive day. I felt good.

Next day in the office, I caught an earful of grief about not showing up for work.  Nobody cared about the customer crisis. That attitude represents what killed Digital Equipment Corporation.  And it will help kill IBM.  Here is one more story.

Around 2014, when I was an IT equipment reseller, I needed a storage solution for a customer project.  A few IBMers wanted me to resell their product, and they treated me to lunch at a local diner.  As we ate lunch and talked, I could see burnout in their eyes.  Sometimes, you just recognize it.  Especially after living through it myself back in the early 90s.  But I signed up as an IBM reseller partner anyway, mostly because I’d been jerked around by the other guys and I’d heard good stories about IBM product quality.  So I overlooked the burnout and gave it a shot.

A note to non-tech readers here.  Don’t be intimidated by words like “server” and tech company names like IBM here.  This is about sales and money, not technology.  Think of an IT equipment reseller as similar to a car dealer. Except it’s computer equipment and services instead of cars.  And I went to customers, instead of customers coming to my showroom.

Just like car manufacturers offer sales incentives for dealers, IT equipment vendors offer sales incentives for reseller partners.  The most common is a process called deal registration.  When a reseller brings a vendor into a sales opportunity, the reseller registers that opportunity with the vendor and the vendor grants favorable pricing to that reseller.  It’s a reward for introducing the vendor to a new customer and it’s supposed to protect the reseller from cutthroat pricing competition.  Theoretically, nobody will be able to buy at a lower wholesale cost.

Shortly after my free lunch, and before IBM sold its Intel based server division to Lenovo, I pitched IBM servers to that customer.  It was a warm-up to the larger opportunity for storage, the real prize.  Wouldn’t you know it, Lenovo was the competition, and online store, CDW, teamed up with Lenovo to sell Lenovo servers at a retail price less than my preferred IBM wholesale cost.  I’m no economist, but I figured out a long time ago that selling for less than what you pay is a path to bankruptcy.

I lost that server deal.  But I have a hunch both CDW and Lenovo lost money to beat me.  Small comfort.

And then IBM dropped a bomb.  Because I brought IBM in and registered the opportunity and we lost, IBM punished me by prohibiting me from registering any more opportunities with this customer for 90 days.  This meant, if I wanted the privilege of selling IBM equipment to this customer during the next 90 days, not only would I make less money on any successful sale, but I would be at a pricing disadvantage to anyone else who might come along and register their own deal with IBM.  No good deed goes unpunished.

I complained all the way to the CEO’s office.  Lots of important people promised to make it better, but nobody could override an automated system apparently controlled by a group in the Philippines.  And not one IBM vice-president understood why I was upset.

I teamed up with a different storage vendor and eventually made the sale without IBM.  And that pretty much ended my short IBM partnership.

Now, it’s 2017 and IBM has gone through twenty consecutive quarters of revenue decline.  That’s five years of misery.  Combine desperation to turn around a shrinking revenue base with the bureaucracy gone nuts I tangled with, add disconnected senior managers with spreadsheets, and it’s a recipe for disaster.

And talk about irony.  The same IBM that wants to become a cloud provider decides now is the time to get rid of remote workers.  Tell me how that makes any sense.  Why would anyone  listen to IBM’s cloud message today, when IBM wants to run its own operations as if it were still 1982, when Reagan was president?

I would not want to be part of 2017 IBM.  This forced relocation will only drain talent and eventually kill the company.

Normally, this where I would end.  Yet another disconnected manager with a spreadsheet and a company in a death spiral.  End of story, right?

Creative Destruction

Not so fast.  We live in the United States, land of creativity and free enterprise.  And out of the ashes and pain from this IBM idiocy will rise a wave of creativity that will start something new and better.  Economists call it creative destruction.  Which means it must be common, since it has a name.  I might be the poster child for creative destruction on a small scale.

It doesn’t take a rocket scientist to figure out that this “offer” is really a way to get rid of people without spending money on layoffs and severance packages.  If you’re a twenty year IBM veteran, used to predictability, and with a mortgage and family to feed, you’re probably living in fear right now.  Do you uproot your family and keep working for managers who want you gone but don’t want to spend money to lay you off?  Or do you stay put and look for something else?  Whatever you choose, that perception of safety you’ve enjoyed since before your kids were born is over.  The clock is ticking.

My vote: Walk away now.  If you uproot your family and move across the country to keep your job, what happens in a few months with the next revenue crisis?   You can do better.  The world is bigger than IBM. Or any company.

 

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