IBM 2004 Annual Report Download - page 9

07
chairman’s letter
we will focus in 2005 on execution. This is that “big E”
message I gave to IBM’s leaders at the beginning of this year.
All of our strategic work over the past four years has given
us considerable capabilities to seize the growth and profit
opportunities I’ve described. Now, we have to improve our
ability to integrate all of this capability for our clients.
In other words, we need to become even more of an
On Demand Business ourselves. And a big part of that is
what I call “lowering the center of gravity” of our company.
For us, this is neither conventional decentralization nor simple
delegation. It means shifting resources closer to the point of
contact with the client, creating enterprise-wide processes
that are commonly shared, and establishing truly global
operations that capitalize on the talent and scale now available
in every part of the world.
Every time we have simplified the company and pushed
authority and resources closer to where the day-to-day
action is, we’ve seen great results—with clients (because we
are easier to do business with), in our cost structure (because
we eliminate unnecessary layers), in revenue growth (because
we differentiate ourselves from the competition) and in how
individual IBMers feel about their company.
Last year, I told you about the online “jam” in which IBMers
collectively defined our values for the first time in nearly a
century. I told you what an outpouring of passion, imagination
and pride that was.
Well, even more impressive was the follow-up jam
we held last fall. This time, we asked IBMers to contribute
ideas to make our values a day-to-day reality in the com-
pany. Participation was extraordinary— more than 57,000
IBMers contributed more than 32,000 comments and
ideas— and the ideas were concrete, practical and focused
on execution.
The top-rated ideas range from back-office integration
supporting the development and marketing of integrated
solutions; to helping first-line managers by giving them
more authority over budgets and freeing up their time to
devote to their people; to clearing away the barriers that
inhibit us from collaborating, innovating and contributing to
IBM’s growth.
These and dozens of other ideas are now in various
stages of implementation, and I am confident that they will
make a material difference to IBM. Our values are also being
turned into actions every day in countless other ways: how
we work with our clients and colleagues; the actions of IBM’s
crisis response team after the Asian tsunami disaster; or the
progress of the World Community Grid— harnessing vast,
unused computational power to help cure disease and forecast
natural disasters.
From the point of view of a CEO, perhaps the best aspect
of this entire process has been the broad platform it creates
to drive change. When your primary organizational challenge
is one of execution, there is nothing more encouraging than
the knowledge that your organization’s direction and sense
of mission come not out of some threat or crisis, but from the
aspirations of your own workforce. For 329,000 IBMers —and
you can count me among them—what drives us every day is
a determination to make IBM the great company we all want
and expect it to be.
Samuel J. Palmisano
CHAIRMAN, PRESIDENT AND CHIEF EXECUTIVE OFFICER
*IBM’s Form 8-K dated January 18, 2005 (Attachment III) contains
information about return on invested capital.