Synopsis:
Mills and Friesen examine what caused IBM to experience major financial losses and the need to reduce its staff by half. Virtually overnight, IBM went from being one of the most respected firms in the world to one widely condemned. This book describes how the company's violation of two well-established contracts led to its most serious problems. The first was its long-standing relationship with customers, where the implicit agreement was IBM's guarantee of high-quality technology and close-service support. The second was between IBM and its employees, with the implicit commitment to employee security. When IBM abrogated both contracts in the 1980s, its business began to fall apart. Quinn and Friesen describe IBM's experience in terms of broader historical and contextual patterns, and they look at the strategic tasks that IBM now confronts during its comeback. "Mills and Friesen argue their case cogently and clearly."-Washington Post Book World "Chock-full of penetrating analysis."-National Productivity Review "This insightful book is highly recommended for business executives."--Choice
From the Back Cover:
Once the world's most admired corporations, IBM stumbled badly in the early 1990s. At the depth of the crisis, the company suffered its first ever operating loss and eliminated nearly 200,000 jobs. What went wrong? Contrary to popular wisdom, the authors argue that the root cause of IBM's difficulties was not that it fell behind in technology, but rather that it disregarded its customers and misled its employees. In this book, Mills and Friesen draw on extensive interviews with IBM executives, access to company files, and surveys of the company's customers to explain why, despite its advantages, IBM's executives failed to maintain its leadership. The authors show that IBM developed an overly optimistic strategic plan based more on pride than on reality; made a financing decision that eventually crippled its industry-leading marketing franchise; destroyed its long-term relationship with customers, to whom it had guaranteed high-quality product and close service support; broke its implied commitment to employees of lifetime employment security; and executed a massive corporate reorganization that left the subsequent strategic crisis unresolved. Telling the story of IBM's downfall in the context of the company's history, the authors also outline the challenges that lie ahead for current leadership, even in the face of IBM's apparent rebound. Broken Promises is a cautionary tale of strategic miscalculation, managerial error, and a loss of confidence that demonstrates for executives at any large company the risks of neglecting customer and employee relationships in the face of large-scale change.
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