IBM chief executive Virginia Rometty has rebuked her company’s employees after the tech giant posted weak financials last week.
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The company, she says has not moved fast enough when it comes to keeping up with the demands of its customers and that it needs to speed up the shift to new computing models.
“Where we haven’t transformed rapidly enough, we struggled,” Rometty said in the video published on IBM’s internal website. “We have to step up with that and deal with that, and that is on all levels.”
What makes Rometty’s statements interesting is that IBM has generally done quite well at staying ahead of the computing curve. In 2004, for instance, it sold its desktop computing business to Lenovo before most people realised that it was a shrinking business.
It has however allowed itself to slip down the rankings in the server game, leading some to speculate that it would also sell that business to Lenovo.
IBM announcement of poor quarter resulted in a 4.9% drop in its share price in after hours trading as well as a shake up among its senior management. According to the Wall Street Journal, Rodney Adkins, formerly head of IBM’s Systems and Technology Group, is now senior vice president for corporate strategy.
Big Blue blamed the poor quarter on the performance of its sales staff, saying the failed to close a number of potentially lucrative deals. In the video, Rometty called out one of those pitches.
“We were too slow to understand the value and then engage on the approval and the sign-off process,” she said. “The result? It didn’t get done.”
She also instituted a new rule, obliging IBM employees to answer questions and queries from clients within 24 hours.
“And if anything slows you down, call it out,” she urged. “Engage management, engage leadership, and let’s deal with it.”
Rometty is just the ninth leader in the computing pioneer’s 102 year history. In her time at the helm, she has delivered a mixed bag of results, particularly in recent times. There don’t appear to be any whispers of investors trying to remove her and she feels that the company is still on the right track.
“Our performance reminds us that there are profound shifts under way in our industry, and when we move to the new high value spaces we do well,” she said.
According to the Journal however, some analysts fear that IBM was outstripped by the likes of Amazon when it came to providing cloud services, which are generally easier to implement that its traditional bulky hardware and software operations.
After the bashing, IBM employees did receive some encouragement from Rometty.
“Our fundamentals are strong and our future is in our own hands,” she said in the video. “I know we will confront this honestly and with urgency, and moments like this are when IBMers rise to the occasion. We don’t retreat; we go on the offense.”
Image: Asa Mathat / Fortune Live Media (via Wikimedia Commons).
