Adaptive Strategies

BEST PRACTICE

Waking UpIBMHow a Gang of

Unlikely Rebels Transformed Big Blue

HARVARD BUSINESS REVIEW July-August 2000

Six years ogo, IBM was a has- been. Today, it's an e-business powerhouse. It didn't turn around by imposing change from the top. It let ideas, initi- atives, and enthusiasm bubble Lip from below. Maybeyour company should do the same.

BYGARYHAMEL

D o YOU REMEMBER WHEN I B M was a case study in complacency? In- sulated from the real work! by layer upon layer of dutiful manaj;ers and obsequious staff, IBM's executives were too busy fighting their endless turf battles to notice that the compa- ny's once unassailable leadership po- sition was crumbling around them. The company that held the top spot on fortune's list of most admired corporations for four years running in the mid-T98os was in dire need of saving by the early 1990s. Fujitsu, Digital Equipment, and Compaq were hammering down hardware margins. EDS and Andersen Consult- ing were stealing the hearts of CIOs. Intel and Microsoft were running

137

BEST P R A C T I C E • Watting Up fBM

away with PC profits. Customers were bemoaning the company's ar- rogance. By the end of 1994, Lou Gerstner's first full year as CEO, the company had racked up $15 billion in cumulative losses over the previ- ous three years, and its market cap had plummeted from a high of $105 billion to $32 billion. Armchair con- sultants were nearly unanimous in their view: Big Blue should he bro- ken up.

Despite Gerstner's early assertion that IBM didn't need a strategy (the last thing he wanted was to start an- other corporatewide talk fest), IBM was rudderless in gale force winds. Yet over the next six years, the com- pany transformed itself from a be-

and Microsoft originally missed? Much of the credit goes to a small band of activists who built a bonfire under IBM's rather broad behind. This is their story.

Missing an Olympic Opportunity The first match was struck in 1994 in the backwoods of IBM's empire, on a hilltop in Ithaca, New York, by a typical self-absorbed programmer. David Grossman was a midlevel IBMer stationed at Cornell Univer- sity's Theory Center, a nondescript builditig hidden away in the south- east corner of the engineering quad. Using a supercomputer connected to an early version of the Internet,

How did a company that had lagged behind every computer trend since the mainframe catch the Internet wave-a wave that even Bill Gates and Microsoft originally missed?

sieged box maker to a dominant ser- vice provider. Its Global Services unit, once a backwater, grew into a $30 billion business with more than 135,000 employees, and corpora- tions flocked to IBM consultants for help in capitalizing on the Internet. By the end of 1998, IBM bad com- pleted 18,000 e-business consulting engagements, and about a quarter of its $82 billion iti revenues was Net related.

How did a company that bad lagged behind every computer trend since the mainframe catch the Internet w a v e - a wave that even Bill Gates

Gary Hamel is the Thomas S. Mui- phy Distinguished Research Fellow at Harvard Business School, a visit- ing professor of strategy and inter- nationa} management at the Lon- don Business School, and chairman of Strategos. a consulting firm based in Menlo Park, California. He is the author of the forthcoming book. Leading the Revolution (Harvard Business School Press), from which this article is adapted.

To discuss this article, join HBR's authors and readers in the HBR Fo- rum at www.hhr.org/forum.

Grossman was one of the first people in the world to download the Mosaic browser and experience the graphi- cal world of the Web. Grossman's fecund imagination quickly con- jured up a wealth of interesting appli- cations for tbe nascent technology. But it was an event in February, as snow dusted the groxmd around tbe Theory Center, that hardened his de- termination to help get IBM out in front of wbat he knew would at the very least be the Next Big T h i n g - and might very well be the Ultimate Big Thing.

Tbe Winter Olympics had just started in Lillebammcr, Norway, and IBM was its official technology sponsor^ responsible for collecting and displaying all tbe r e s u l t s . Watching the games at home, Gross- man saw the IBM logo on tbe bottom of bis TV screen and sat througli the feel-good ads touting IBM's contri- bution to the event. But when he sat in front of bis UNIX workstation and surfed the Web, he got a totally different picture. A rogue Olympics Web site, run by Sun Microsystems, was taking IBM's raw data feed and presenting it under tbe Sun banner. "If I didn't know any better," says Grossman, "I would have thought

that the data was being provided by Sun. And IBM didn't have a clue as to what was happening on the open Internet. It bothered me."

The fact that IBM's m u c k e t y - mucks were clueless about the Web wasn't exactly news to Grossman. When he had landed at IBM a few years earlier, everyone was still us- ing mainframe terminals. "I was shocked/' he remembers. "1 came from a progressive computing envi- ronment and was telling people at IBM that there was this thing called U N I X - t h e r e was an Internet. No one knew what I was talking about."

This time, though, he felt embar- rassed for IBM, and he was irked. He logged on to the corporate directory

and looked up tbe name of t h e senior e x e c u t i v e in charge of all IBM marketing, Abby Kohnstamm. Then he sent her a message inform- ing her that IBM's Olympic feed was being ripped off. A few days later, one of her

minions working in Lillehammer called Grossman back. At the end of a frustrating conversation, Gross- man had tbe feeling tbat one of them was living on another planet. Ever persistent, Gtosstnan tried to send some screen shots from Sun's Web site to IBM's marketing staff in Lille- hammer, but IBM's internal e-mail system coukln't cope with the Web software. Tbat didn't stop IBM's dili- gent legal department from sending Sun a cease-and-desist letter, which succeeded in shutting down the site.

Most frontline employees would have left it at tbat. But Grossman felt IBM was missing a bigger point: Sun was about to eat Big Blue's lunch. After everyone had come back from the Olympics, he drove down to IBM's headquarters, four hours away in Armonk, New York, to personally show Kohnstamm the Internet.

A Virtual Team Takes Shape When he arrived, Grossman walked in unattended, a UNIX workstation in his arms. Wearing a programmer's uniform of khakis and an open- necked shirt, he wound his way up to the third floor-the sanctum sanc- torum of the largest computer com-

138 HARVARD BUSINESS REVIEW July-August 2000

BEST PRACTICE • Waking Up IBM

pany in the world. Borrowing a Tl line from someone who had been working on a video project, he strung it down the hall to a storage closet where he plugged it into the hack of his workstation. He was now ready for his demo - a tour of some early Weh sites, including one for the Rolling Stones. As sohcr-suited IBM exeeutives scurried through their rounds, Miek Jagger could he heard wailing from the closet.

In addition to Kohnstamm, two others were present at that first demo. One was Irving Wladawsky-Berger, head of the supercomputer division where Grossman worked. The other was [ohn Patriek, who sat on a strat- egy task foree with Wladawsky- Berger. Patrick, a career IBMer and lifelong gadget freak, had heen head of marketing for the hugely success- ful ThinkPad laptop computer and was working in corporate strategy, scouting for his next big project. Within minutes, Grossman had his full attention. "When i saw the Weh for the first time," says Patriek, "all the hells and whistles went off. Its ahility to include colorful, interest- ing graphics and to link to audio and video content hlew my mind."

Not everyone saw what Patriek saw in that primitive first browser. "Two people can see the same thing but have a very different understand- ing of the implications," he recalls. "A lot of people [would say], 'What's the hig deal ahout the Web?' But I conld see that people would do their hanking here and get access to all kinds of information. I had been using on-line systems like Compu- Serve for a long time. For people who weren't already using on-line sys- tems, it was harder for them to see."

Their passions fueled hy the Web's limitless possibilities, Patriek and Grossman hecame IBM's Internet tag team, with Patrick doing the business translation for Grossman and Grossman doing the teehnology translation for Patrick. Patriek acted as a sponsor and a resource hrokcr. Grossman developed intimate links with the Net-heads in IBM's far- flung development community. "The hardest part for people on the street like me," says Grossman, "was how to get senior-level atten-

tion within IBM." Patrick hecame his mentor and his go-between.

After seeing Grossman's demo, Patriek hired him, and they soon hooked up with another Internet activist within IBM, David Singer. Singer was a researcher in Alameda, California, who had written one of the first Gopher programs, which fetched information off the Net. Grossman and Singer started build- ing a primitive corporate intranet, and Patrick published a nine-page manifesto extolling the Weh. Enti- tled "Get Connected," the mani- festo outlined six ways IBM could leverage the Weh: 1. Replace paper communications

with e-mail. 2. Give every employee an e-mail

address. 5. Make top exeeutives available to

customers and investors on-line. 4. Build a home page to better

communieate with customers. 5. Print a Weh address on every-

thing, and put all marketing on-line.

6. Use the home page for e-com- merce. Tbe Get Connected paper, distrib-

uted informally hy e-mail, found a ready audienee among IBM's unher- alded Internet aficionados, The next step was to set up an on-line news group of the sort that allowed IBM's underground hack- ers to trade techni- cal tidbits. "Very few people higher up even knew this stuff existed," says Grossman. Within months, more than 300 enthusiasts would join the vir- tual Get Cotinected team. Like dissi- dents using a purloined duplicator in the old Soviet Union, Patrick and Grossman would use the Weh to build a community of Web fans that would ultimately transform IBM.

As Patrick's group began to blos- som, some argued that he should "go corporate" and turn the nascent Web initiative into an officially sanc- tioned project. Patrick's hoss, senior VP for strategy and development

As sober-suited IBM executives scurried

through their rounds^ Mick Jagger could be heard wailing from the closet

Jim Canavino, disagreed. "You know, we could set up some sort of department and give you a title," Canavino remarked to Patrick, "hut I think that would be a bad idea. Try to keep this grassroots thing going as long as possible." Patrick needed to infiltrate IBM rather than manage some splendidly isolated project team. It would he easy for others at IBM to ignore a dinky department, hut they couldn't stand in the way of a grounds well,

Still, Canavino wasn't above using his role as head of strategy to give the fledgling initiative a push. To avoid the danger of going quickly from having no IBM Weh site to hav- ing dozens of uncoordinated ones, Canavino decreed that nohody could huild a site without Patrick's ap- proval. Though few in IBM had any inkling of what the Internet would hecome, Patrick had become IBM's semi-official Internet czar.

"Where's the Buy Button?" Patrick's volunteer army was a widely dispersed group of Net ad- dicts, many of whom had no idea that others shared their passion. "What John ended up providing," says Grossman, "was the ahility to articulate and summarize what everyone was doing and to open a lot

of doors." In turn, the Net-heads in- troduced Patrick to the culture of the Internet, with its egalitarian ideals and trial-hy-fire ap- proach to develop- ing new technolo- gies. When tbe Get Connected conspir- ators gathered for their first physical meeting, remem-

bers Grossman, "the question on everybody's lips was. How do we wake this company up?"

Patrick gathered a small group of his Get Connected renegades, in- cluding Grossman, at his vacation house, set deep in the woods of west- ern Pennsylvania. There they cob- bled together a mock-up of an IBM home page. The next step was to get through to Gerstner's personal

140 HARVARD BUSINESS REVIEW July-August 2000

BEST PRACTICE • Waking Up IBM

How to

start ""Insurrection

Is it clear to you that your company needs to be shaken up? Then it's time you became a revolutionary. Here are seven steps for organizing a coniorate insurrection.

1Establish a point of view. In a world of peoplewho stand for nothing more than more of the same,a sharply articulated POV is your greatest asset. It's a sword that lets you slay the dragons of precedent. It's a rudder that lets you steer a steady course when others are blown about by fad and whim. And it's a beacon that attracts those who are looking for something worthy of their allegiance. A powerful POV is credible, coherent, compelling, and commercial. To be credible, it must be founded on unimpeachable data. To be coherent, it must be logical, laying out a bulletproof argument. To be com- pelling, it must speak to people's emotions, telling tbem why your cause will make a difference in the world. To be commercial, it must have a clear link to the bottom line.

2 W r i t e a manifesto. Ifs not enough to have an ideology; you have to be able to pass it on, to infisct others with your ideas. Like Thomas Paine, whose

Common Serise became the inspiration for the American Revolution, you have to write a manifesto. It doesn't have to be long, but it must capture people's imaginations. It must paint a picture of what is and what is coming that causes discomfort, And it must provide a vision of what could be that inspires hope.

3 Create a coalition. You can't change the direction ofyour company all by yourself. You need to build a coalition, a group of colleagues who share yourvision

and passion. It'seasytodismiss corporate rebels when they are fragmented and isolated. But when they present them- selves as a coordinated group, speaking in a single voice, they cannot be ignored. And remember, as you struggle to attract recruits to your cause,you will have an advantage over top management. Your army will be made up of volunteers; theirs will be composed of conscripts. Conscripts fight to stay alive; volunteers fight to win.

4 Pick your targets. Sooner or later, a manifesto has to become a mandate if i f s going to make a difference. Tbe movement has to get the blessing of the suits.

That's why activists always identify and target a potential champion-someone or a group of someones tbat can yank the real levers of power. Ultimately, tbe support of senior management is the object of your crusade. Make an effort to understand t b e m - t h e pressuresthey face, the objectives

they have to fulfill. Find some who are searching for help

and ideas, and go after them. If necessary, bend your ideals

a bit to fit their goals. And don't forget that leaders are

often more receptive to new thinking than are the minions

who serve them.

5 Co-opt and neutralize. Some activists furthertheir causes by c o n f r o n t i n g and embarrassingt h e i r adversaries. Such tactics may work in the public sphere, but in a business setting they'll probably get you fired. You need to disarm and co-opt, not demean and humiliate. To win over IBM's feudal lords, John Patrick constructed a set of win-win propositions for them: Lend me some talent, and I'll build a showcase for your products. Let me borrow a few ofyour top people, and I'll send them back with prototypes of cool new products. Reciprocity wins converts; ranting leaves you isolated and powerless.

6 F i n d a t r a n s k i t o r . imagine bow a buttoned downdad looks at a daughter who comes home withgreen hair and an eyebrow ring. Thaf s the way top management is likely to view you and your coconspirators. And thaf s why you need a translator, someone who can build a bridge between you and the people with the power. At IBM, Patrick was a translator for Dave Grossman. He helped the top brass understand the connection between the apparent chaos of the Web and the disciplined world of large-scale corporate computing. Senior staffers and newly appointed executives are often good translator candidates- they're usually hungry for an agenda to call their own.

7 t Win small, win early, win often. None ofyour organizing efforts is worth anything if you can't

demonstrate that your ideas actually work. You need results. Start small. Unless you harbor kamikaze instincts, search for demonstration projects tbat won't sink you or your cause if they should f a i l - f o r some of them will fail. You may have to put together a string of successful proj- ects before top management starts throwing money your way. You have to help your company feel its way toward revolutionary opportunities, step by step. And as your record of wins gets longer, you'll find it much easier to make the transition from an isolated initiative to an inte- gral part of the business. Not only will you have won the battles, you will have won the war.

142 HARVARD BUSINESS REVIEW July-August 2000

Waking Up IBM • BEST PRACTICE

techtioJogy adviser, who agreed to tnake him available for a demo of the prospective IBM corporate Web site. When Gerstner saw the mock- up, his first question was, "Where's the buy button?" Gersttier wasn't a quick study-he was an instant study. But Grossman and Patrick knew that an intrigued CEO wasn't enough. There were thousands of others who still needed to get the In- ternet rehgion.

Their first chance for a mass con- version came at a meeting of IBM's top 300 officers on May 11, 1994. Having schemed to get himself on the agenda, Patrick drove his point home hard. He started by showing IBM's top brass some other sites that were already up and running, including ones done by Hewlett- Packard; Sun Microsystems; the Red Sage restaurant in Washitigton, D.C.; and Grossman's six-year-old son Andrew. The point was clear: on the Web, everyone could have a vir- tual presence.

Patrick ended the demo by saying, "Oh, by the way, IBM is going to have a home page too, and this is what it will look like." He showed the startled executives a mock-up of www.ibm.com, complete with a 36.2-second video clip of Gerstner saying, "My name is Lou Gerstner. Welcome to IBM."

Still, many IBM old-timers re- mained skeptical. Recalls Patrick: "A lot of people were saying, 'How do you make money at this?' I said, 'I have no idea. All I know is that this is the most powerful, important form of communication both inside and outside the company that has ever existed.'"

Shortly after the May meeting, Patrick and a few colleagues showed up at one of the first Internet World trade conventions. The star of the show, with the higgest booth, was rival Digital Equipment. Like Gross- man's before him, Patrick's competi- tive fires were stoked. The next day, the convention's organizers auc- tioned off space for the next show, scheduled for December, and Patrick signed IBM up for the biggest dis- play, at a cost of tens of thousands of dollars. "It was money I did not have," admits Patrick, " but I knew

I could find it somehow. If you don't occasionally exceed your formal authority, you are not pushing the envelope."

Now that IBM's name was on the line, Patrick had a rallying point for all of the company's various Inter- net-related projects. Here was his chance to seed his message across the entire company. He sent letters to the general managers of all the

asked him about his organization, he replied, "You're looking at it, and there are hundreds more."

Throwing Hand Grenades Patrick was a relentless campaigner, spreading the good word about the Internet in countless speeches in- side and outside IBM. "Somebody would invite me to talk about the ThinkPad," he recalls, "and I would

Like dissidents using a purloined duplicator in the old Soviet Union, Patrick and Grossman used the Web to build a community of Web fans that

would ultimately transform IBM.

business units asking for anything they had that smelled like the Inter- net. They would have to put in only a little money, he promised, and he would coordinate everything. It turned out that IBM had a lot more Web technology brewing than even he had expected. But none of it was really ready to go to market. Still, hy December, Patrick was able to showcase IBM's Global Network, as the world's largest Internet service provider, as well as a Web browser that preceded both Netscape's Navi- gator and Microsoft's Internet Ex- plorer. IBM stole the show and be- came a fixture at every Internet World thereafter.

Constantly fighting IBM's paro- chialism, Patrick took every oppor- tunity to drive home the point that the Web was a companywide issue and not the preserve of a single divi- sion. At the next Internet World, in June 199s, he challenged his compa- triots to leave their local biases at the door: "The night before the show, I got everybody together in an auditorium and said, 'We are here because we are the IBM Internet team for the next three days. You are not IBM Austin or IBM Germany.' That is part of the culture of the In- ternet-boundaryless, flat."

The huge IBM booth generated a lot of curiosity among the show's other participants. When people asked Patrick to whom he reported, he said, "The Internet." When they

come talk about the Internet in- stead, rd use the ThinkPad to bring up Web page presentations rather than PowerPoint slides." He also made himself accessible to the me- dia. But even when talking to re- porters, his prime constituency was still the vast swath of unconverted IBMers. He just couldn't shut up about the Internet. Says Patrick: "If you believe it, you've got to be out there constantly talking about it, not sometimes, but all the time. If you know you're right, you just keep going."

While Patrick and his crew were throwing Internet hand grenades into every meeting they could whee- dle their way into, Gerstner was fan- ning the flames from above. Gerst- ner's early belief in the importance of network computing dovetailed nicely with the logic of the Internet. Having bought into Patrick's pitch, Gerstner was ever ready to give IBM's Web-heads a boost. He insisted that the company put its annual and quarterly reports on the Web, and he signed up to give a keynote address at Internet World. This was while Bill Gates and others were still diss- ing the Web as an insecure medium for consumer e-commerce. Within IBM, Patrick became a trusted emis- sary between the company's but- toned-down corporate types and the T-shirted buccaneers who were plugged into Net culture and living on Internet time. Patrick had the ear

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of IBM's aristocracy, and his message was simple and utiequivocal: "Miss this and you miss the future of com- puting." At the same time, Patrick convinced Grossman and his ilk that not everyone in the head office was a Neanderthal. "I used to think that IBM at senior levels was clueless, that these guys had no idea how to run a company," says Grossman. "But one of the many things that has impressed me is that the people who arc running this company are really brilliant businesspeople. Somehow we connected them to the street. Knowing how to shorten paths to those decision makers was key."

When IBM finally set up a small, formal Internet group, with Patrick as chief technical officer, he insisted that the team stay separate from IBM's traditional software develop- ment organization. His logic: "I do believe there's a benefit in being sep- arate. Otherwise, we'd have to start going to meetings. Pretty soon we'd be part of someone else's organiza- tion, and a budget cut would come along, and we'd be gone."

Even with the formal unit in place, Patrick and Grossman didn't disband their grassroots coalition. As the 1996 Summer Olympics ap- proached, the group went through several watershed events. Patrick lent Grossman out for t8 months to corporate marketing, which was in charge of the Olympics project. For the first time, the Olympics would have an official Web site, and IBM would build it. Grossman launched himself into building the site and was soon begging Patrick for extra bodies. "Patrick did the magic to get them hired," says Grossman, "and I morphed from doing the grunt technical work to being Tom Sawyer and getting other people to help whitewash the fence."

To prepare for the Olympics, Grossman and his team had also started developing Web sites for other sporting events such as the 1995 U.S. Open and Wimbledon. For the U.S. Open site, he gave a couple of college interns from MIT the task of writing a program to connect a scoring database to the Web site. "By tbe end of the summer," remembers Grossman, "we were sitting in a

Waking Up IBM • BEST P R A C T I C E

trailer, barely keeping together a Web site with a million people a day pounditig away at it for scores. It was held together by Scotch tape, hut we were learning about scalability." It was amazing, thought Grossman, that all those people would come to a site merely for sports scores.

IBM's second surprise came in 1996 when a chess match hetween world champion Garry Kasparov and an IBM supercomputer named Deep Blue generated a flood of global in- terest. Corporate marketing had asked Grossman earlier to huild the Web site for the match, but he was booked with too many other assign- ments, so the site was outsourced to an advertising agency that did little more than put up a cheesy chess- board. The day of the first match, the site was overloaded with traffic and crashed.

"Nobody had any idea this was going to he such a big deal," says Patrick. IBM went into panic mode. Grossman and a handful of IBM's best Web engineers jumped in to

take over the site. With only 56 hours to revamp it before the next match, they got Wladawsky-Berger to pull a $500,000 supercomputer off the assemhly line. The site didn't crash again, but the incident raised the anxiety level about the upcom- ing Olympics. If IBM was having dif- ficulty running a Web site for a chess match, what were the Olympics going to he like? The incident suc- ceeded in convincing a few more skeptics that the Internet was going to he beyond Big.

The Olympics site had to be able to withstand anything. Patrick went tin-cupping again, asking all the gen- eral managers to lend him their best people and best equipment. He got not one supercomputer, but three, and his team grew to about 100 peo- ple. By the time it was over, IBM had built what was then the world's largest Weh site, which withstood up to 17 million hits a day with few shutdowns. The content on the site was replicated on servers across four continents. IBM even learned how to

do a little e-commerce when a demo site for on-line ticket sales attracted a flood of credit card numbers and $S million in orders.

The Power of Results For P a t r i c k and G r o s s m a n , t h e Olympics was just one more high- profile way to show IBM the possi- bilities of the Internet. It was also an easy way to get funding for develop- ment. "I used the Olympics as a front," admits Grossman. "What I was doing, without telling anyone, was getting computing resources. I also thought the fastest way to get IBM to change was to work from the outside in. If IBM saw itself written about in the papers, then it would change faster than if we got mired in an internal process."

Grossman's on-the-fly develop- ment, in public no less, was the complete antithesis of IBM's tradi- tional way of doing things, which was to push developers to perfect products before letting them out the door. It was the difference between

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BEST PRACTICE • Waking Up IBM

improv comedy and a carefully re- hearsed Broadway play. The old model didn't make much sense on the Web, where if something breaks, you can fix it without sending out millions of CD-ROMs with new software. You just change the soft- ware on the server, and everyone who logs on automatically gets the new version.

Grossman and Patrick quickly concluded that creating Weh-en- abled software called for a new set of software development principles, which they summarized and shared within the burgeoning IBM Web community: • Start simple; grow fast, • Trial by fire. • Just don't inhale |the stale air

of orthodoxy). • Just enough is good enough. • Skip the krill (go to the top

of the food chain when you're trying to sell your idea).

" Wherever you go, there you are (the Net has no bounds).

• No blinders. • Take risks; make mistakes

quickly; fix them fast. • Don't get pinned down

[to any one way of thinking). M u c h of t h e t e c h n o l o g y t h a t

Grossman and his crew first proto- typed would later make its way into industrial-strength products. For in- stance, the Web server software de- veloped for the Olympics evolved into a product called Websphere, and much of what Grossman's group learned formed the basis for a Web-

'We have never been a threat to any other part of the company. From the beginningy our goal was to help IBM become the Internet Business Machines company"

hosting business that today supports tens of thousands of Weh sites.

Following the Olympics, the In- ternet group stepped up its prosely- tizing within IBM. Grossman, who had become the senior technical staff member on Patrick's team, set

up an Internet lab to hring in execu- tives from all over the company to experience the Web's possibilities. Patrick's group also started a project called "Web Ahead," which worked to revolutionize the company's own IT systems through Internet tech- nology, For instance, the team took the old terminal-based corporate di- rectory and wrote a Java application that gave it a great graphical inter- face and cool features. With a few clicks, employees could look up a colleague, see what computer skills he or she had, and then ask the direc- tory to list every other employee at IBM with those same skills. These "Blue Pages" were an instant hit.

Only a few dozen people officially worked for the Internet group, so Patrick was constantly pleading to borrow people (who were usually already part of his virtual team) from other departments. In this effort, his most important ally was the team's ever-lengthening list of success sto- ries. People could argue with posi- tion papers, but they couldn't argue with results. "1 have never been turned down on anything I have asked for, and I have asked for a lot," he says. "I would go to a general manager and say, 'I need you to pull some disk drives from the assembly line, and I need your top engineer. What you will get out of it is unique. Your guy is going to come back to your group, and you are going to have a hell of a reference story to talk about. It will be great PR. We will make your stuff work on the Inter-

n e t . ' " Patrick had gained c r e d i b i l i t y without a big job title or a mcgabudget.

Patrick was hard to refuse, partly because it was clear that he was o p e r a t i n g in IBM's interests as a whole and not just fighting for his own l i t t l e group. As he

puts it, "I didn't have any allegiance to any one product group. Although I had a budget that came out of the software group, I didn't think of us as part of the software group. When somebody called us and asked for help, we didn't ask them for a budget

code. We'd say, 'Sure.' We have never been a threat to any other part of the company. From the beginning, our goal was to help IBM become the I n t e r n e t Business M a c h i n e s company."

Patrick was quick to assure would- be donors that the relationships he was forging worked botb ways. He would borrow people from various business u n i t s , but at any given time, about a quarter of his own peo- ple would be out on loan to other units, and Web Ahead alumni were regularly posted to permanent posi- tions across IBM. When that hap- pened, he would tell his remaining staff, "We did not lose Bill. We colo- nized the network hardware divi- sion. Now there is one of us living there."

Again and again, throughout their I n t e r n e t campaign, Patrick and Grossman broke long-standing IBM rules and overstepped the bound- aries of their own authority. But be- cause their cause was so important and their commitment to IBM's suc- cess so visibly selfless, they got away with things that bad often sunk ca- reers at Big Blue. Then and now, Patrick is unapologetic: "If you think of yourself as being in a box with boimdaries, you're not going to have any breakthroughs. If (people on my team] come to me and say, 'We failed because we didn't have the authority to do something/ I'll say that's crazy."

Inside IBM and out, Patrick and Grossman are today recognized for their pivotal contribution to their company's e-business metamorpho- sis. With the support of a prochange GEO, these two unlikely h e r o e s - a software nerd and a corporate staffer-helped IBM do something it hadn't done for a couple of decades: lead from the front.

The author acknowledges the assistance ot Ehck Schonfeld in the preparaaon of this article.

R e p r i n t R 0 0 4 0 6 Tu order reprints, sec the k s t page of this issue.

146 HARVARD BUSINESS REVIEW July-August 2000

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