A No-Nonsense Book--with a Few Gaps

For journalists covering the computer industry, one joy is how readily bigwigs dish the dirt. No other industry, except entertainment, has so many outspoken leaders willing to make outrageous comments--or attack each other publicly. An exception is Louis V. Gerstner Jr. IBM's (IBM ) chairman and former CEO rarely takes to the public stage. As for the media, he believes less is more and seldom grants interviews.

Now, Gerstner has broken his silence in a new book, Who Says Elephants Can't Dance? Inside IBM's Historic Turnaround (HarperBusiness, $27.95). It's a well-written, 372-page account of his 10-year resuscitation of the world's largest computer company. He shares practical experiences, the lessons learned, and even some intriguing observations about Wall Street, corporations, and the computer business.

Yet Gerstner stays true to his nature. There can be little question that he penned the book, since it so clearly reflects his no-nonsense personality. Again and again, he cuts to the chase and avoids chitchat. For example, he promises a brief personal history in one of the early chapters, and he delivers--spending all of six paragraphs on his youth.

Nor should anyone expect a kiss-and-tell book. Gerstner, who likely received an estimated $4 million advance, which he says he's going to give to charity, comes closest to slinging mud with his description of the computer industry as a "24/7/365 three-ring circus." Even after 10 years in the tech field, he's still amazed how the digerati do business: "If I planned to say even a tenth of what passes for normal business discourse in this industry, my lawyers would have bound and gagged me and bolted the door."

The broad strokes of Gerstner's story have been well documented, and his account may seem familiar to even the casual reader. On Apr. 1, 1993, Gerstner left RJR Nabisco and "parachuted" into the computer giant, which had racked up $8 billion in losses and had been forced to slash 73,000 jobs. Scores of consultants were at work preparing to disassemble this icon of American business and spin off the pieces as separate companies.

In comes Gerstner with a different view. He believes Job One is to craft a strategy to keep the ailing giant intact and then to execute. To his surprise, he finds an ossified culture unable to respond to changes in the market--or to his plans. Gerstner says IBM was close to bankruptcy when he arrived, but his delivery is so matter-of-fact, the reader doesn't get a sense of how dire the situation was.

The problems become clearer as Gerstner wrestles with grave cultural issues at Big Blue. For example, he decides he must reduce IBM's country managers' independence. And to get all managers to cooperate, he ties their compensation to overall corporate performance, rather than to the performance of their individual units. This is the book's strongest section, a must-read for any student interested in strategy, corporate behavior, or even simply how to communicate with employees. The book also includes several Gerstner memos written over the years that provide fly-on-the-wall detail.

But students won't learn much about Gerstner's shortcomings. There is no mention of his failed attempt at the consumer market. His efforts to woo consumers with education software and home networks both sputtered until he unloaded them. He also pulled IBM out of home PCs. Indeed, Gerstner doesn't spend much time on the PC business, a perennial money-loser, or explain why it took him nearly nine years to outsource the production of desktops.

Perhaps the biggest gap in an otherwise solid book is Gerstner's failure to take on his critics. Recently, analysts have asked whether his turnaround wasn't really the result of fancy maneuvers in the ledger book. While the Securities & Exchange Commission has not found any wrongdoing, critics claim that IBM boosted its share price through share-repurchase programs and that it has not fully disclosed the effect of some asset sales. Gerstner says he didn't think a book describing his past 10 years at IBM was the place for such a discussion.

That's too bad. But in the end, Who Says Elephants Can't Dance? still works. Gerstner may not dish the dirt like other tech CEOs, but his rich experience is worth more than any gossipy memoir.

By Ira Sager

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