Values at IBM :

Making A Difference SELUSI conference 2011

Ir. Mia Vanstraelen

Mia.vanstraelen@be.ibm.com

Oct 7th, 2011

Agenda

IBM at a glance

IBM’s Values

Development of IBM’s values

Impact on IBM’s Business and the world

IBM is a values-based enterprise of individuals, who create and apply

technology to make the world work better.

Today, about 400,000 IBMers around the world

invent and integrate hardware, software and services

to help forward-thinking enterprises, institutions and

people everywhere succeed in building a smarter planet.

IBM at a glance

Dedication to every client’s success

Innovation that matters – for our company and for the world

Trust and personal responsibility in all relationships

IBM Values

Background: The IBM Perspective

IBM’s top management has consistently mandated commitment to values and the highest ethical standards

- Any great organization … owes its resiliency, not to its form of organization or its administrative skills, but to the power of what we call beliefs and the appeal these beliefs have for its people.‖ T.J. Watson, Jr.

- ―Ethical behavior is … good for business because it fosters one of our greatest assets – customer loyalty.‖ L.V. Gerstner

- Remember that a strong value system based on integrity and accountability has always been at the core of IBM‘s existence. We do not pay lip service to ethics; it is part of our DNA.‖ S.J. Palmisano

IBM has reinvented itself many times. But through it all, its DNA, its soul

remained intact. That’s because of something that was part of this

company since its inception.

IBM’s most important innovation wasn’t a technology or management system. Its

revolutionary idea was to define and run a company by a set of strongly held beliefs

– beliefs that would transcend economic cycles, geopolitical shifts, and generations

of products, technologies, employees and leaders

IBM’s most important

innovation was “the IBMer”

Note: IBM's approach to strategic execution is adapted from Tushman, Michael L. & Charles A.

O'Reilly III. Winning through Innovation. Harvard Business School Press, Boston, MA. 1997.

Execution Strategy

Market

Results

Performance

Opportunity

Gap

Leadership

IBM Values

Marketplace

Insight

Strategic

Intent

Business

Design

Innovation

Focus

Talent

Critical Tasks

Interdepend- encies

Formal

Organization

Climate &

Culture

IBM Business Leadership Model

7

IBM Values are foundational to Strategy and Execution which are interdependent on,

and essential to, IBM Business Leadership.

In 2003, IBMers participated in

the first values Jam WW

How IBM

has used Jams IBM all

company Jams

Development of IBM Values

IBM Strategy

IBM’s Transformation Framework is guided by the IBM Strategy,

grounded in IBM Values and enabled by Transformation Platforms

IBM Values

Transformation Platforms

Capture higher value Invest for growth Drive productivity

Transformation Framework

Value-based

Culture

Business

Process

Excellence

Information

Technology

Enablement

Guided by the IBM

Strategy and grounded

in our Values

Enable transformation

at the intersection of

business process,

technology and culture

Sustain our strength in

the global marketplace

by focusing on areas

that enable growth,

productivity, and

culture change Enable Culture Change

Apply shared values

Enable Growth Enable Productivity

IBM Transformation – IBM’s Approach to Transformation

IBMers can find essential ingredients for growing their careers, and building and sustaining a company of experts, in our three-tier Career Model

Job Role Expertise:

Develop deep skills and expertise specific to a particular job Employees use a tool to assess their skills and close gaps between current skill levels and their targets

Career Capabilities:

Build a broad set of capabilities to advance a career Employees use the Career Framework to develop client-valued capabilities, document their progress, and apply for progression in the framework

IBM Competencies:

Demonstrate the leadership that distinguishes IBM-ers Employees grow and document their progress in unique leadership competencies and behaviors, based on IBM’s values, that are differentiators for IBM

+ + Expertise Capabilities Leadership

Social Role, Values

Self-Image

Trait

Motive

Skills

Knowledge

Necessary for top performance but not sufficient

Characteristics that lead to longer-term success

Emotional Intelligence Competencies are

Aligned with IBMs existing competency work Any measurable characteristic of a person that differentiates

level of performance in a given job, role, organization, or

culture

Source: FDU Magazine

Workaholics

Values and motivational characteristics vary by generation

Connecting with our people

Sceptical

A contract

Title Recognition Freedom

You are needed

Do it your way

Managing

Collaboratively

• Influencing Others

• Fostering Teamwork

Managing Yourself

• Empathy

• Self Control

• Self Confidence

Managing Your

Team

• Developing Others

• Holding People Accountable

• Team Leadership

Managing the Work • Results Orientation

• Initiative

• Problem Solving

As an IBMer you will find alignment between the Emotional Intelligence

Competencies and the IBM Values and Leadership Competencies

And employees develop competencies that reflect our core IBM Values

By using the IBM Competencies Learning Suites to deepen their understanding of the competencies

By making sure to include competency growth in their career development plan

By using the Career Framework to document their competency progression

By living our IBM values and demonstrating leadership in all they do at IBM

IBM Competencies: Employees demonstrate the leadership that distinguishes IBM

How and when?

Leadership Capabilities Leadership

Defined common values and performance mgmt align employees with

the decisions and strategic priorities of the management teams

IBM Transformation – Underlying Platforms – Enabling Culture Change

IBM’s Values are integral in our performance, recognition and talent management systems

Tens of thousands of IBM employees actively participate in advancing our Values-based culture via

collaborative technologies

Business Week named IBM one of Twenty Best Companies for Leadership

IBM Research – #1 on the US patent list for 17 years

Established and periodically refreshed a core set of

leadership competencies for all IBMers

Defined a new Leadership Framework that

emphasizes business results and the employees’

experience

Engaged employees globally in Values Jam to refresh

our Values

Enabled collaborative innovation by making intranet

sophisticated social networking platform

Established a global innovation agenda that spans

multiple dimensions (e.g., products, services, people)

Transformational Leadership

Values-based Culture

Collaborative Innovation

Global IBMer

Imp

ac

t

Why… a focus on Climate & Culture?

Conclusions from nine years of IBM Linkage Research:

“IBMers’ attitudes measured by the Global Pulse

Survey

are leading indicators of future client satisfaction,

revenue growth, and market share”

The IBM Global CEO Study 2006 reveals that 35% of CEO’s see

an unsupportive culture and climate as a major obstacle for

innovation

Leadership competenties and managerial styles (skills and behaviour

of manager) influence up to 70% the climate in a team (Hay Consultants)

The impact of climate on financial results, such as return on sales, revenue

growth, efficiency and profitability has a direct correlation with leadership styles

(next to market conditions and competitive dynamics) and a direct influence on the

bottom line (HBR OnPoint/Summer 2006) and accounts for nearly 1/3 of results.

59

IBM Business Consulting Services

© Copyright IBM Corporation 2006For IBM Internal Use Only

Obstacles to innovation

0% 10% 20% 30% 40%

Other

Workforce issues arising externally

Insufficient access to necessary information and

data

Inflexible physical and information technology

infrastructure

Inadequate enabling technologies

Economic uncertainty

Process immaturity

Workforce issues arising internally

Government and other legal restrictions

Limited funding for investment

Unsupportive culture and climate

% of Respondents

September 200616

Global Business Services

© Copyright IBM Corporation 2006An integral look at Innovation

And Leadership Styles make a Difference

Daniel Goleman: Harvard Business Review OnPoint Summer 2006

To help an

employee

improve

performance or

develop LT

strengths

To get quick

results from a

highly

motivated and

competent

team

To get buy-in or

consensus or

input from

employees

To motivate

people during

stressful

circumstances

When changes

require a new

vision, or clear

direction is

needed

Crisis, kick-

start

turnaround

Style

working

best

.42-.25.34.46.54- .26Overall

Impact on

Climate

“Come with me”

Mobilizes

people toward a

vision

Authoritative

“People come

first”

Creates

harmony and

builds emotional

bonds

Affiliative

“What do you

think?”

Forges

consensus

through

participation

Democratic

“Do what I

tell you”

Demands

immediate

compliance

Coercive

“Do as I do,

now”

Sets high

standards for

performance

Pace-setting

“Try this”In one

sentence

Develops

people for the

future

Leader’s

Modus

Operandi

Coaching

Daniel Goleman: Harvard Business Review OnPoint Summer 2006

5

Business Resilience Services

BC&RS Fit for the Future | Do not copy or email | IBM Confidential © 2005 IBM Corporation

Business Performance

+ Sales Growth

+ Market Share

+ Productivity

+ Long term profitability

Leadership Practices

Walk the talk

Integral approach

Employee development

Acknowledge fear

Employee Results

Work climate

Professional teamwork

Employee satisfaction

Employee retention

Customer Results

+ Responsive service

+ Product quality

Customer satisfaction

+ Customer retentionWork characteristicsElapsed time

Integral Linkage Research Model, 2005

*Adapted from: (1) The Handbook of Organizational Culture & Climate, chapter 11, by J.W. Wiley & S.M. Brooks. (2) Peter M. Senge and Katrin H. Käufer, Communities of

Leaders or No Leadership at All, ABRIDGED for publication in Cutting Edge: Leadership 2000 by Barbara Kellerman, Larraine R.Matusak. (3) IBM Workforce Research

1997 – 2005. (4) BC&RS Fit for the Future project 2004 - 2005. (5) Richard Barret, A Whole Systems Approach to Cultural Transformation: Building a Values Driven

Organization, 2005 – 2006.

The Integral Linkage Research Model*

Work CharacteristicsElapsed Time

Formal change project:

“Fit for the Future”START here:

Smarter Roads

Smarter Telco

Smarter Utilities

Smarter Healthcare

Smarter Food

Smarter Oil & Gas

Smarter Transportation

Smarter Money

Smarter Public Safety

Smarter Supply Chains

Smarter Cities

Smarter Retail

IBM Solutions is Leading to Think and Act in New

Ways: Economically, Socially and Technically

Our Values at Work outlines the meaning of Trust and

personal responsibility in all relationships

Trust and personal responsibility in all

relationships means:

IBMers actively build relationships with all

the constituencies of our business –

including clients, partners, communities,

investors and fellow IBMers.

IBMers build trust by listening, following

through and keeping their word.

IBMers rely on our colleagues to do the right

thing.

IBMers preserve trust even when formal

relationships end.

―Inside IBM, we‘ve never been more matrixed, more global, more ―virtual,‖ more

dependent on people who don‘t sit next to us and don‘t report to us. Nonetheless

(or, rather, especially), we must come through for our colleagues—or be clear

about why we cannot. Ambiguity, uncertainty and passing the buck are the

surest ways to kill both productivity and relationships…‖

Our Values at Work,

2003

Sam Palmisano continues to articulate his expectations

for Trust and personal responsibility in all relationships

"This shift of control and decision-making to the IBMer

represents a very new relationship between

enterprises and individuals – and that involves a

certain degree of risk. Sharing power always does. But if

you trust your strategy, your capabilities and your

people – and if you are confident that all are grounded

in a set of shared values – then this is the kind of

innovation you pursue.‖

Sam Palmisano,

Letter to IBM Shareholders

March 2008

―At IBM, we've set off down the path of empowering and enabling our people to make decisions and to act. We have been working to ‗lower the center of gravity' of the company, as I put it—that is, to trust IBMers and push decision-making authority out and down…This will require a whole new kind of humility for enterprises and their leaders. And it will also require a new level of ownership and personal responsibility among individuals. Both of those shifts will involve major culture change.‖

Sam Palmisano, The Globally Integrated Enterprise April 2007

Back Up

IBM Strategy to optimize value for our clients

Focus on open technologies and high-value solutions

Deliver integration and innovation to clients

Become the premier Globally Integrated Enterprise

End of the crisis? ... Which is the next one ?

3. Embed corporate values into all leadership initiatives.

Shared values are the underpinning of a corporate-wide culture. They help

unite employees across the globe, as well as enabling fast, independent

decision making consistent with the company's philosophy. As well as

embedding corporate values, be sure to establish the important role of the

leader as a global ambassador; one who not only communicates and

reinforces corporate values, but who embodies them in everyday behaviours

and decisions.

Core Customer Business = IBM Business

IBM Value to customer

Overall Value of IBM

Growth through Trust € Personal Responsability. –

The model

2004 2010…

Our Journey

Defined common values and performance mgmt align employees with

the decisions and strategic priorities of the management teams

IBM Transformation – Underlying Platforms – Enabling Culture Change

IBM’s Values are integral in our performance, recognition and talent management systems

Tens of thousands of IBM employees actively participate in advancing our Values-based culture via

collaborative technologies

Business Week named IBM one of Twenty Best Companies for Leadership

IBM Research – #1 on the US patent list for 17 years

Established and periodically refreshed a core set of

leadership competencies for all IBMers

Defined a new Leadership Framework that

emphasizes business results and the employees’

experience

Engaged employees globally in Values Jam to refresh

our Values

Enabled collaborative innovation by making intranet

sophisticated social networking platform

Established a global innovation agenda that spans

multiple dimensions (e.g., products, services, people)

Transformational Leadership

Values-based Culture

Collaborative Innovation

Global IBMer

Imp

ac

t

Communications aux employés

Kickoff meetings

Communications des Executives

Programmes des Partenaires d’Affaires

Communications aux actionnaires

Communications aux clients

Prise de conscience et

compréhension

w3.ibm.com/ibm/values

It Doesn’t Happen Overnight – It requires integrated,

incremental learning

Minimal results

In-house Training

Some behavioral results

Individual Develop- ment

Sustained individual performance improvement

Integrated Initiatives with Coaching and Measure-ment

Critical mass for sustained group performance improvement

Organizational Interven- tions

Sustained organizational improvement

Improving and sustaining Emotional Intelligence takes a concerted

effort over several months.

Emotional Intelligence as a pre-requisite Daniel Goleman

Academic experts confirm the importance of Trust and personal

responsibility in all relationships, and the role of leaders in enabling it

“The essential ingredient of collaborative effort is trust. High performance teams

are characterized by high mutual trust among members. Leaders succeed in

bringing about change because they are trusted by constituents to reflect their

values and aspirations. An organizational climate of trust enables employees to

surface their ideas and feelings, use each other as resources, and learn together.” Costigan

“Key imperatives in building high-trust organizations and teams are:

- Achieving results – Following though on business commitments

- Acting with integrity – Behaving in a consistent manner

- Demonstrating concern – Respecting the well-being of others” Shaw

“Trust is not something one changes with pronouncements or good intentions.

Seeking to improve trust directly, in fact, can result in higher levels of suspicion if

the process is not managed effectively…Trust is the outcome of doing a number of

fundamental things right. Those who are successful at building trust usually

don’t talk about it; they live it.” Shaw

Discussion: How can strengthening the

Dimensions of Trust help enable achievement

of our business objectives? “The reality is that Trust is a hard-

edged economic driver…because

Trust always affects two

outcomes: speed and cost. The

economics of trust are simple: When

trust goes down, speed goes down

and cost goes up… When trust goes

up, speed goes up and cost goes

down… If we have a low-trust

organization, we can rest assured

we are paying a tax. While these

taxes may not show up on the

income statement as ‗trust taxes,‘

they‘re still there, disguised as other

problems such as redundancy,

bureaucracy, politics,

disengagement, turnover, churn and

fraud.‖ Covey

Character Trust

Competence Trust

Positional Trust

Organizational Trust

Actions you can take as an IBM leader to strengthen

Trust and personal responsibility in all relationships

Reflect on the leadership role you play in advancing the four dimensions of

trust and be a role model by ensuring your actions, decisions and behaviors

are consistent with this Value

Ensure your teams are clear on their roles, responsibilities and

accountabilities

In communications with your team, cite examples and acknowledge

situations and team members where this Value was demonstrated

Reach out to a leader in an organization where you and/or your team have a

strained relationship, to openly discuss issues and figure out a better way of

working together

Invest in the skills and capabilities of your team

Ensure that expectations with clients are set properly so they can be

delivered on

Engage your teams in a discussion to:

- Review the four dimensions of Trust and personal responsibility

- Identify inhibitors that get in the way of this Value

- Agree on actions you can take locally