This article is more than 1 year old

America is under siege. Do we blame IBM or Cringely?

150,000 staff fired. -20,000 left ...

The problem with most of these comments is that they start by accepting Cringely's premise as true. Such is the nature of message boards.

I also take issue with Cringely's notion that the comments prove all that helpful. You'll find readers leaving poems by Shelley and providing worthless statements such as "Bob, I imagine you emailed a copy of this article to Lou Dobbs" and "Let it(IBM)crash & burn FOREVER!"

True enough, some of the reader comments are fantastic. I enjoyed the same experience with messages left on our original Cringely story and via emails. In fact, a couple of my most respected emailers backed up Cringely's arguments, making me think the columnist is on the right track here.

I'm going to quote one reader, who shall remain anonymous, at length because this is a crucial issue. I have edited the e-mail as I saw fit.

First, this has been kept extremely quiet until now. (I'd heard rumblings about this a year ago, but thought it was more "localized" to specific accounts in the outsource services area - didn't connect the dots.) IBM services is having some problems with accounts that were acquired by IBM as outsource contracts, mainly due to the competency of the acquired team - both management and worker-bees. No surprise here: that was why the customers outsourced the services to IBM in the first place - the customer couldn't manage their own infrastructure. IBM had intended to do some serious load-shedding on these accounts anyway, but the scope is really much larger than I expected.

Which brings us to part two: there is a serious problem with work ethic in the technology sector. This also covers both sides of the management line, with incompetent managers being just as prevalent as incompetent workers. IBM services has had what is probably a similar exposure as other companies to the problems this causes; however, unlike most other companies, IBM is choosing to do something proactive about it.

What do I mean by that last remark? IBM is not just reacting to the incompetence of the acquired worker-bees the way most companies do: IBM appears to be doing one of their every-decade-or-so house-cleanings at all levels. This is going to cut deeply into their middle management ranks, their technical leadership ranks, even into some senior-level positions (although these will probably be couched as "early retirement" or "personal pursuits").

IBM has established a tradition of leadership for over 100 years in all its fields. It has done this by aggressively pruning its workforce time and time again and establishing super-human standards for its workers. In the past this was typified by the IBM philosophy that you live "a Company life" - wearing dark suits and white shirts, taking transfers and relocation regardless of the impact to your personal life, and being forced to work in every area of the company on your way up the management ladder. Failure was NOT an option: you failed at an assignment, you were working elsewhere in two weeks.

Over the past decade, IBM has transitioned from "Big Iron" to the Internet economy with solid success - something that none of its contemporaries (if they even exist) can boast. In the process, IBM expanded aggressively into many "new" technology and services areas - mainly by hiring and buying from the outside. No rocket-science here: that's how everyone does it. IBM is NOW doing what the other companies (SUN, HP, Microsoft, etc.) are NOT doing: it has identified what is working and what is not, and is now purging the failures - especially the human failures, the workers that are not contributing to IBM's growth.

Foreign out-sourcing is not a panacea; however, many foreign workers - especially Chinese and Eastern European - have a very different work ethic than their American or European counterparts. They WILL work harder, study harder, spend more time working and less whining about their company. Their leaders - technical and non-technical - are much more serious about their work and less concerned about becoming dot-com millionaires than their counterparts. So, IBM is choosing to keep a core of motivated workers and replace the rest with new workers without the baggage of a whining Euro-American society. The fact that the new workers are cheaper is a side benefit - IBM has always understood the difference between cost and value - and they will be judged on the value they provide, not simply the cost they save.

If all of you wrote me emails like that, I'd be a genius.

As a Silicon Valley historian and a technology reporter, I have tremendous respect for Cringely. He knows his stuff.

Cringely, however, seems to have confused IBM adjusting its business model to vibrant, competitive threats with some kind of anti-American assault. And, rather than approaching this subject, with the careful touch it deserves, he's relied on fear-mongering and rampant speculation.

It may just be the case that Cringely has a deeper, more insightful agenda at play with his recent pair of flippant stories. Perhaps the American technology worker needs a wakeup call. The rising stock market has us all feeling pretty good again. Sure, China and India have all those engineers, cheap labor and relentlessness work ethics. But we're ideas people and will always be profiting from the cutting edge, while shipping the grunt work overseas.

Well, if the US is truly to rely on its status as a "knowledge economy" and an "information services economy" in the years ahead, we'd better get a lot better at figuring out which services matter and how to accomplish the whole services "engagement" in a way that leaves customers feeling decent about the experience. ®

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