The Lucie Show: Shaking Up A Stodgy Ibm

As a kid growing up on a cattle ranch in California's Sierra Neva da, Lucie J. Fjeldstad learned early what it meant to get your hands dirty. If the cows needed milking, she would grab a milking stool and pail. Summer vacations found her on the seat of a tractor. But Fjeldstad was a girl, after all, and hard work could never win her a place on the Little League baseball team. Complain as she might to the boys, her only recourse was "sitting on the bench and pouting," she recalls.

These days, things are different. After years of hard work, Fjeldstad has muscled onto one of the most buttoned-down boy's teams in America. One of only three women among the 76 corporate officers at IBM, she's in charge of about 1,000 employees as vice-president and general manager of its multimedia business. Her mission is to figure out how Big Blue can best capitalize on technology that melds video, sound, and digital information.

It's a first-string job, but Fjeldstad still is frustrated. While she got used to battling male chauvinism long ago, she has found a formidable new opponent: IBM's hidebound corporate culture. Through multimedia, Fjeldstad sees the computer business rapidly converging with television, telecommunications, and consumer electronics to create a golden age of computer-driven entertainment and education. Breaking into consumer markets where IBM has little experience requires a major commitment, and Big Blue seems to be dragging its feet. "Lack of imagination is our worst problem," she says bluntly.

That's tough talk for an IBMer. But Fjeldstad, 48, is a member of a new generation at IBM--a group of fortysomething managers who have suddenly found themselves with more authority since Chairman John F. Akers announced his big restructuring in January. Gone is a cadre of older top executives, including former head of IBM world trade C. Michael Armstrong, who was considered Akers' heir apparent. If anyone is to smash through the sluggish bureaucracy that has bogged down Big Blue, this group of Young Turks is it.

Fjeldstad, for one, can draw on a long history of breaking down barriers. She enrolled in Santa Clara University during the first year the school went co-ed. "It took courage to come to a previously all-male school, especially back then," says Paul L. Locatelli, president of the university, where Fjeldstad is now vice-chairman of the board of regents. She credits playing women's basketball at Santa Clara with teaching her a lot about competition and leadership. "I learned passing and blocking and pushing and shoving," she jokes.

EARNING STRIPES. It has taken all of that and more to rise through the ranks at IBM. Fjeldstad joined the company's Silicon Valley laboratory in 1968 as one of its few female computer programmers. She married an IBM marketing executive, Bob Fjeldstad, and the couple settled down to raise his son by a former marriage. By 1977, however, she got the call from headquarters and moved the family to Westchester County, N.Y. Bob took early retirement last year.

Fjeldstad rose steadily through the management ranks, and by 1983, she became the first woman ever to head up an IBM development laboratory. In charge of 900 engineers, she earned her stripes there by getting a new mainframe out on time and improving its quality. That led to a tougher assignment in 1986: As the head of eight development divisions, she cut personnel and senior mangement by 25%, while reducing the amount of time it took to get the products out the door. At the end of her reign there, the employees, only half-jokingly, presented her with a sledgehammer.

Her aggressiveness won her the vice-president slot in 1988. That meant not only a cushy corner office in White Plains but also direct access to IBM's top decision-makers. Fjeldstad plays down that she's one of the highest-ranking women in the company now and doesn't believe in using her position as a platform to criticize IBM for its dearth of female leadership. Hard work, she insists, got her where she is. "Maybe there just aren't other women who are ready yet," she says.

People who have worked for Fjeldstad give her high marks for leadership and fairness. In an annual Employee Opinion Survey of senior executives last year, she scored above 90%, when the average score was about 60%. "That is exceptional these days," says Larry McKinney, who reported to Fjeldstad at the time and scored about 70% on the same survey, "especially because there is much less satisfaction now with senior executives than when IBM was flourishing in the mid-1980s." McKinney also thinks that Fjeldstad is in the right position to take a fresh management approach. "Multimedia has given her the full opportunity to challenge the system," McKinney says.

WOWED. Fjeldstad discovered multimedia by chance around the time of her big promotion. An obscure work group she was visiting in Atlanta had cobbled together a multimedia setup, and she became enamored of the technology. "She saw that this was a fundamentally new way for people to interact with computers and information," says Corporate Vice-President James E. Dezell Jr., who led the Atlanta group and now heads IBM's education unit.

Fjeldstad suggested to IBM President Jack D. Kuehler that he come down to Atlanta to see the stuff in action. Kuehler was so impressed he gave her the go-ahead to make a presentation at a meeting of IBM's Management Committee, which is run by Akers. Fjeldstad put together a two-hour multimedia presentation, complete with music, video, and snazzy computer graphics. The top brass was wowed. "They asked me to turn IBM into a multimedia company," she says.

Easier said than done, especially when it comes to pushing IBM into markets focused on Joe Consumer. The promise of multimedia is in merging the capabilities of PCs, TVs, and compact disk players. Fjeldstad, in fact, sees the personal computer and television eventually melding into one machine. With your remote control, you could order and store a vast range of movies, music, and periodicals. You could simply watch and listen or, perhaps, mix things together to create customized "info-tainment."

Within the industry, IBM is renowned for breakthroughs in multimedia research and development. Educators rave about complex systems that use computing, video, and sound to bring history lessons alive. The products, however, are way too pricey for the consumer market. As rivals Sony, Philips, and AT&T move aggressively with multimedia products for the masses, IBM is stuck in the mud. "These guys are coming right up our tailpipe," says Fjeldstad.

HOLLYWOOD SHUFFLE. IBM's problem is manifold: Having focused on business customers for years, it lacks other retail channels, is a high-cost producer, and has few entertainment or software products to feed its machines. Jumping into consumer markets, Fjeldstad thinks, will require an entire culture change, for which she has plenty of prescriptions (table).

In the meantime, she's exploring alliances with several unlikely partners--movie studios, electronics makers, and publishing companies. Fjeldstad has been spending ample time in California lately, trying to forge partnerships with executives from Disney, MCA, and Time Warner. She also has been visiting with such Hollywood power brokers as Michael Ovitz, George Lucas, and Steven Spielberg.

While little yet has come of such talks, IBM is hammering out a new multimedia joint venture with Apple Computer Inc. Called Kaleida, it is designed to come up with standardized multimedia software for a wide range of computers and consumer electronics gear. Problem is, Apple can't teach IBM how to produce low-cost gadgets, and it can't provide access to entertainment software. The reticence and foot-dragging at headquarters over noncomputer industry alliances leaves the door open to such companies as Sony, which already has a big film library and record catalog to couple with some aggressively priced CD players that display pictures and text.

Fjeldstad doesn't like to criticize IBM's top brass publicly. But she suggests that some of the people at Big Blue just don't get it. "You can't often do things in a new way with the same people who did it the old way," she says. "We need people willing to marry the left brain with the right brain." Challenging the IBM establishment is typical of Fjeldstad, says education chief Dezell. "Those pushing the edge are always frustrated," he says "But any organization that doesn't have a Lucie is in trouble."

      To stay competitive, Lucie Fjeldstad believes that IBM must:
       -- Shake up its corporate culture by bringing in more executives from outside 
      the computer industry
       -- Deliver on Chairman John Akers' promise to manage some business units 
      independently of the parent corporation
       -- Offer new incentive plans that grant bonuses to employees of the business 
      units that post strong profits
       -- Completely exit the businesses unessential to IBM's future
      DATA: BW
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