IBM's Mandate to Employees

Peter : On Rad's Radar?
| Peter Radizeski of RAD-INFO, Inc. talking telecom, Cloud, VoIP, CLEC, and The Channel.

IBM's Mandate to Employees

So IBM is taking a bunch of flack from pulling people back into the office. Some departments are not going to be virtual or remote any more -mostly marketing and design. There are debates across America about this. IBM was the pioneer of work from home with up to 40% of its employees working from home.

The new Chief Marketing Officer was the one who announced to her 5500 employees that remote wasn't going to work for her. Michelle "Peluso, formerly the CEO of fashion startup Gilt, explained [to employees] the "only one recipe I know for success." Its ingredients included great people, the right tools, a mission, analysis of results, and one more thing: "really creative and inspiring locations,"" according to QZ.

IBM's CIO had made it his mission to make the company agile with a small team mindset. "A feature of Smith's particular "agile playbook" for IBM was that "the leaders have to be with the squads [his word for small teams] and the squads have to be in a location." [QZ]

IBM has had "19 consecutive quarters of declining sales!" IBM is facing tough competition. In cloud computing, Lotus/Notes, storage and product lines, they aren't in the top 3. They need to do something different to regain momentum and compete against the likes of Microsoft, Google and Amazon.

Here are a few of the reasons that this mandate might have been made.

Culture. You can't build (or re-build) culture remotely. Culture doesn't exist in a vacuum or on a virtual platform.

I understand the marketing teams need to be together since it is very hard to do creative work and brainstorming virtually, despite the cool new tools. It isn't people huddled in a room mashing it out. Remember that most communications are non visual.

"IBM's leadership believes that people working together stokes innovation." [WaPo] "IBM has research on their side. Studies have reinforced the so-called "water cooler effect," which indicates that employees who work in the same location communicate, collaborate, innovate better and perform better than if they were all working from their homes."

"Research suggests remote workers are more productive and log more hours than employees who work in the office, and for many companies, offering an option to work remotely helps recruit employees who are seeking better work-life balance or who want to live in a location where the company has no office." And IBM saved $100M annually in rent payments. However, they need more than productivity. They need a mind melt; dabble labs; skunk works; new blood with new ideas; and agility to fight off cloud providers and the big 5 GAFAM (Google, Apple, Facebook, Amazon, Microsoft). GAFA makes "around $2 million per employee (IBM makes about $200,000 for each employee)". Cost savings and productivity won't replace agility and innovation.

Yahoo famously did this. Other companies as well. QZ notes, "Famous tech office perks at Silicon Valley companies, like free food and laundry service, are at least partly designed to keep workers in the office, and the office designs themselves are sometimes created to optimize interaction." So this isn't unusual. It just goes against the trend. The trend toward remote workers is a cost savings one.

There is a reason that S&P 500 heavyweights used to spend 33 years on the list - and now less than 15 years!

Related Articles to 'IBM's Mandate to Employees'
Featured Events