The Decline of 'IBM': Why Safe Choices May Not Always Be the Best

The phrase 'IBM' in the context of corporate decision-making is often associated with a preference for a well-known, trusted brand. This historical sentiment reflects a broader cultural sentiment where individuals might favor established and reputable options to avoid potential blame or negative consequences if something goes wrong. In truth, however, it has often led to a risk-averse approach in corporate settings, which can stifle innovation and competitive advantage.

The IBM Legacy in Corporate IT

For many years, IBM was a symbol of reliability and trustworthiness in the corporate world. Many CIOs and line-of-business (LOB) managers relied on IBM products and services because they aligned with a safer, more conventional approach. This mindset made it tough for competitors to gain traction, as IBM had a strong reputation that served as a shield against criticism.

However, Tikhon's use of past tense when discussing IBM signals a significant shift. Recently, IBM has faced challenges in the technology landscape, particularly in areas like hardware solutions, where the company is no longer considered a leader. Products like Lotus Notes are often seen as outdated and buggy, and IBM's support services have also declined. These changes highlight that the once-safe bet with IBM is no longer as solid a choice as it once was.

The Risk-averse Mindset: A Double-Edged Sword

Interestingly, this trend towards safety and risk aversion is not unique to IBM. In Beating the Street, fund manager guru Peter Lynch discusses a phenomenon he calls "following the herd." Lynch argues that choosing the same safe, low-risk option can shield you from negative consequences, but it can also lead to underperformance. Innovators who take risks and do something different might face harsher criticism when things go wrong, but they also have the potential for significant rewards.

The safe option is often chosen because it minimizes the risk of blame. Choosing IBM, for example, kept CIOs and LOBs from taking the blame when something went wrong. This approach, which is philosophically akin to "covering your ass" (CYA), has been a common practice in many corporate settings. However, in a rapidly changing technological landscape, this mindset can hinder progress and innovation.

A Personal Tale of IBM's Influence

Personal experience can illustrate the impact of this risk-averse approach. In a previous role within an IBM-influenced IT department, the pressure to choose IBM solutions over open-source alternatives was intense, especially for a junior developer like myself. An evaluation of an IBM product versus an open-source alternative was a straightforward choice in terms of cost, implementation, and developer support. The open-source solution offered a compelling case, with lower costs and a cleaner implementation pipeline, bolstered by the fact that developers were using the open-source product themselves.

Despite the clear advantages of the open-source solution, the emphasis on safe, traditional choices ultimately led to job cuts and restructuring within the department. In hindsight, the argument for choosing the open-source alternative might have been overly risky given the company's culture, and this experience serves as a cautionary tale. As David Norris notes, this is often a form of FUD (Fear, Uncertainty, Doubt) tactic that works well on managers.

Conclusion

The shift away from IBM and the broader discussion around safe choices in corporate culture highlight the changing dynamics in the tech industry. While the allure of safety and reliability is understandable, it is essential to recognize that taking calculated risks can lead to greater innovation and market advantage. Companies that can adapt and embrace change, even if it means deviating from the status quo, are likely to succeed in the long run.

References

Lynch, P. (1998). Beating the Street: Time- Tested Methods for Selecting Stocks. Simon and Schuster.

Norris, D. (2021). Personal Insights. LinkedIn Pulse.