What It Takes to Transform Your Firm
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Leadership Feb 7, 2018

What It Takes to Trans­form Your Firm

IBM’s sto­ry pro­vides a roadmap for using ambi­tious goals and con­stant com­mu­ni­ca­tion to rein­vent a company.

Computers save to the cloud.

Yevgenia Nayberg

Based on insights from

Diane Brink

In busi­ness, longevi­ty requires con­tin­u­al trans­for­ma­tion from com­pa­nies. Some­times small adjust­ments are suf­fi­cient. But oth­er times busi­ness­es need to recon­ceive their most fun­da­men­tal oper­a­tions in order to sur­vive and stay vital. 

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Just ask Diane Brink. Brink served as IBM’s Chief Mar­ket­ing Offi­cer for Glob­al Tech­nol­o­gy Ser­vices from 2008 to 2015 — a peri­od that saw IBM shift from a focus on lega­cy infra­struc­ture ser­vices to cloud-based ser­vices and solutions. 

Orga­ni­za­tions can nev­er exist effec­tive­ly in a steady state,” says Diane Brink, now a senior fel­low and adjunct pro­fes­sor in the mar­kets and cus­tomers ini­tia­tive at the Kel­logg School. 

But for com­pa­nies, know­ing where to go is only half the bat­tle; they also need the fore­sight, urgency, and invest­ments to get there. Brink offers a roadmap for how com­pa­nies can suc­cess­ful­ly transform. 

Set Ambi­tious Goals 

About sev­en years ago, lead­ers at IBM noticed that a few cor­ners of the tech­nol­o­gy mar­ket — cloud com­put­ing, ana­lyt­ics, mobile, and secu­ri­ty, among oth­ers — were grow­ing at an aston­ish­ing clip, even if actu­al mar­ket adop­tion was rel­a­tive­ly nascent. To these lead­ers, this sig­naled poten­tial­ly tec­ton­ic indus­try changes. So the com­pa­ny land­ed on an ambi­tious goal to be a mar­ket leader in each of these seg­ments and to rede­fine its rev­enue sources, decid­ing that more than half of IBM’s rev­enue would come from prod­ucts and ser­vices in these high-growth seg­ments. At the time, that per­cent­age was clos­er to ten. 

This goal was both pow­er­ful in its clar­i­ty and aspi­ra­tional in scope. And that, says Brink, is what ulti­mate­ly con­tributed to its success. 

If you set the bar too low, that sounds like incre­men­tal­ism,” she says. Mod­est steps over a pro­tract­ed time­line tend to exhaust an orga­ni­za­tion, mak­ing it dif­fi­cult to reach the fin­ish line. In her view — some­what coun­ter­in­tu­itive­ly — firms that set a lofty tar­get, one with the pow­er to inspire the orga­ni­za­tion, may stand the best chance of ulti­mate­ly achiev­ing it. 

But lofty tar­gets must remain root­ed in a company’s core pur­pose. Up front, you’ve got to have clar­i­ty on why you’re in the busi­ness that you’re in,” she says. If you’re not sure why you’re doing what you’re doing, it’s going to be very hard to set up a trans­for­ma­tion that will sup­port your brand position.” 

Before any trans­for­ma­tion, the exec­u­tive, mar­ket­ing, and strat­e­gy teams should dis­cuss impli­ca­tions for the busi­ness mod­el and the brand, out­lin­ing in detail how the pro­posed new direc­tion com­ple­ments the company’s core pur­pose. Is this a nat­ur­al and log­i­cal change? Work­ing with­in the bor­ders of a company’s pur­pose — and check­ing con­tin­u­ous­ly to make sure trans­for­ma­tion stays with­in the bor­ders — allows a com­pa­ny to build on exist­ing credibility. 

Ignor­ing this fun­da­men­tal con­ver­sa­tion risks whole­sale rein­ven­tion. If a com­pa­ny embarks on a tra­jec­to­ry that is dra­mat­i­cal­ly dif­fer­ent from its core pur­pose, then it will need to reestab­lish what it’s known for and its posi­tion in the mar­ket,” Brink says. That can be extra­or­di­nar­i­ly difficult.” 

Go All In 

Major under­tak­ings require the com­mit­ment of major resources. But too often, Brink has seen well-defined and ambi­tious visions under­mined by a lack of com­mit­ment to see­ing them through. 

If you don’t align your peo­ple, your mon­ey, and your assets to your trans­for­ma­tion­al goals, you won’t get there,” she says. 

In light of IBM’s dive into new mar­kets, Brink decid­ed to dou­ble down” on her efforts to sup­port this move. As CMO of Glob­al Tech­nol­o­gy Ser­vices, she shift­ed three-quar­ters of all spend­ing to sup­port the new vision. 

If you don’t align your peo­ple, your mon­ey, and your assets to your trans­for­ma­tion­al goals, you won’t get there.”

That spend­ing was well ahead of the rev­enue that IBM was actu­al­ly pro­duc­ing at the time,” she says. We sim­ply made a very con­scious deci­sion to shift lots and lots of dol­lars and peo­ple to sup­port the change.” 

Com­pa­nies need also to com­mit time to the process and be patient, as last­ing trans­for­ma­tion can take years to unfold. But patience, she warns, is not the same as idle­ness. Trans­for­ma­tion must be pur­sued with urgency. Com­pa­nies must quick­ly and whol­ly shift man­age­ment, mea­sure­ment, and com­pen­sa­tion so that these align with the aspi­ra­tional goals that have been set. And it is imper­a­tive that they move for­ward continually. 

You’ve real­ly got to be all in,” says Brink. Trans­for­ma­tion will nev­er work if you have one foot in the old world and one foot in the new.” 

You Can Nev­er Overcommunicate” 

In the churn of trans­for­ma­tion, it is nat­ur­al for employ­ees to won­der what the changes mean for their own careers. Lead­ers need to address these con­cerns head-on by tak­ing as much time as nec­es­sary to meet with team mem­bers and lay out the company’s aspirations. 

You can nev­er over­com­mu­ni­cate,” Brink says. Being con­sis­tent and repet­i­tive in your expec­ta­tions and mes­sages is critical.” 

Dur­ing its trans­for­ma­tion, IBM held a broad array of open forums, employ­ee round­ta­bles, town-hall meet­ings, and web­casts to address how the com­pa­ny was shift­ing course. They brought in senior lead­ers and sub­ject-mat­ter experts to dis­cuss why cer­tain changes were tak­ing place. 

Alto­geth­er, this pro­vid­ed a quar­ter­ly drum­beat on what was hap­pen­ing in the mar­ket, what our capa­bil­i­ties were, and how we were pro­vid­ing val­ue to our cus­tomers,” Brink says. 

Man­agers at all lev­els also met with employ­ees to dis­cuss what the trans­for­ma­tion meant for them, specif­i­cal­ly, and how their work would change. This approach did more than sim­ply clar­i­fy the indi­vid­ual changes man­dat­ed by the trans­for­ma­tion — it offered an oppor­tu­ni­ty to build a shared and col­lab­o­ra­tive vision. 

As employ­ees became per­son­al­ly invest­ed in the change, ideas start­ed to come for­ward from across the com­pa­ny. Folks began to raise their hands and take own­er­ship of par­tic­u­lar pieces of the trans­for­ma­tion; they formed teams of tal­ent and sud­den­ly we were get­ting the ben­e­fit of the intel­li­gence of the entire community.” 

To keep employ­ees engaged over the long haul, one of the most effec­tive and often over­looked tools is a company’s own mar­ket­ing shop, says Brink. 

Orches­trat­ing a delib­er­ate inter­nal cam­paign is real­ly impor­tant in terms of cre­at­ing aware­ness, demon­strat­ing val­ue, show­ing rel­e­vance, and enabling your inter­nal audi­ences,” Brink says. It’s a missed oppor­tu­ni­ty if orga­ni­za­tions don’t take advan­tage of their mar­ket­ing talent.” 

Featured Faculty

Diane Brink

Senior Fellow and Adjunct Professor within the Kellogg Markets & Customers Initiative

About the Writer

Dylan Walsh is a writer based in Chicago.

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