Closing the Credibility Gap: How IBM's Lou Gerstner Made an Elephant Dance

by Britton Manasco | Nov 28, 2008 | Thought Leadership

The third dimension of thought leadership is credibility. It's about staking out a position that you can effectively defend based on experience and evidence.

Louis Gerstner, who as CEO led IBM to a glorious comeback in the 1990s, built his initial credibility on his expThought leadership_Gertsnererience as a former customer of the company. He knew that Big Blue had lost its ability to speak in the customer's language -- the language of business.

This is not an unusual problem. Many companies become too introspective. Software innovators think the poetry is in the code. Hardware executives think the beauty is in the box. Others merely spend an excessive amount of time talking about themselves and relating their own view of the world. They get lost in the features and functions of their products. They start presentations by relating all their own corporate accomplishments.

Sadly, many firms often never wake up to the fact that customers don’t care. They just slip quietly into oblivion. Some, however, catch themselves before it’s too late. Take the case of IBM.

The company certainly grew to global prominence as a result of visionary perspective of people like Thomas Watson. He saw the growing need for powerful computers throughout business and built his company with this in mind. However, the company lost its way along the way. It became known as big, bloated and arrogant. 

It wasn’t until the early 90s that Gerstner presented a vision that could capture the imagination of this company and turn it around –- positioning it for continuing growth. With tremendous foresight, he showed how the company could capitalize on the change facing the technology industry by providing a wider set of solutions -- based on product, service and consultative guidance. 

As a thought leader, he warned the entire technology industry that it was in danger of following he same path that had almost wrecked IBM.

he later stated in his book, "Who Says Elephants Can't Dance?," the tech
industry maintains a "remarkable detachment" from its customers. It
tends "to ignore human behavior, human preferences, human biases, and
personal and institutional demands that emanate from the non-technical
parts of people's and companies' lives."
Gerstner added that if today's
technologists were to truly stand in their customers' shoes they would
find "the promises overblown and the returns more difficult than

But he offered a way out. In his parting letter to shareholders, Louis Gerstner spoke of a
"massive shift" occurring in the technology industry. Technology
companies, he explained, must become increasingly "customer-driven" and
"service-led" if they are to address the emerging demands of the
market, and find success.

Gerstner’s compelling thought leadership repositioned Big Blue as the
powerhouse we continue to know and respect. He made an elephant dance. 

But it was the new credibility he built -– expressed in speeches and media appearances, position papers and, most powerfully, in the company's impressive financial performance –- that instilled confidence in IBM’s customers and all other stakeholders.