IBM Watson: Fresh Out of Correct Answers?
January 11, 2018
As a former laborer in the vineyard of a blue chip, bit time, only slightly misunderstood consulting firm, I know when a client throws in the towel.
I read allegedly accurate write up “Black & Blue: IBM Hires Bain to Cut Costs, Up Productivity.” Let’s assume that the story has the hiring of the Bainies 100 percent correct. (If you see me at one of the law enforcement and intelligence conferences at which I will be speaking in 2018, ask me about the Holiday Inn and Route 128 meetings from the late 1970s. That’s an interesting Bain anecdote in my opinion.)
The write up informed me:
IBM has indicated to senior Global Technology Services management that that a third of the global workforce will be “productively redeployed” in 2018 with tens of thousands of personnel “impacted”. Insiders told The Reg that Big Blue had hired consultant Bain & Company to help it plot a way forward for GTS, bringing in external business consultants despite spending $3.5bn to buy PWC in 2002
Interesting.
Let me share my view of what will happen:
- Hiring a big time, blue chip consulting firm will lead to upper management changes. I would not be surprised to see a Bainie become the shadow CEO of the company with other Bainies advising the Board of Directors. The reason? In order to book revenues, one moves up the food chain until the blue chip outfit is at the top of the heap and has a way to punch the cash register keys.
- Lots of people will lose their jobs. The logic is brutal. If your unit is not making money or hitting its targets, you are part of the problem. The easiest way to solve the problem is to show the underperformers the door with a friendly “find you future elsewhere, you lucky devil.”
- Divestitures will play a role in the remediation effort. If the incumbent management cannot turn a sow’s ear into a silk purse, polish it up, whip out some nifty future value diagrams, and sell what Boston Consulting folks once called “dogs.” Bain, like the Boozer, borrowed the BCG quadrant thing, and it will play a part in the Bain solutions.
- The stock price will go up. Hey, Bain is like magic dust. Those buy backs should have been used to generate new, sustainable revenue. Now with the Bainies reanalyzing the data, some Wall Street MBAs will see gold in them thar terminations, sell offs, and reorganizations.
Worth watching. If Bain is not on board, at some point another blue chip outfit will like McKinsey & Company could implement the same game plan.
In short, IBM is over. I suppose I could ask IBM Watson, but why bother? Time might be better spent trying to land a top job at Big Blue. Are you on Bain’s radar?
Stephen E Arnold, January 11, 2018
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[…] IBM is going to have to do some fancy dancing. Whether Bain, BCG, Booz, McKinsey, or another of the blue chip consulting firms get the job of fixing IBM, the system and method will lead to the same changes I described in “IBM Watson: Fresh Out of Correct Answers?” […]
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