A Hundred Years Of Achievement At IBM

IBM is relishing its celebration of 100 years in business in 2011, and with good reason. Few enterprises ever rise to the lofty level of respect the huge corporation has earned during the last century.

There aren’t many secrets about how IBM rose to the top, despite a couple of major economic depressions, two World Wars (and several somewhat smaller ones), thousands of competitors nipping at its heels, and the fickleness of the IT market.

Big Blue made its mark through continuous investment in innovation, an amazingly consistent business plan, the identification and retention of highly qualified personnel, visionary leadership – and a little luck.

The company was born when financier Charles Flint created a new enterprise called Computing Tabulating Recording (CTR) as the result of merging four companies on June 16, 1911. CTR, based in Endicott, New York State, originally made products that included cheese and meat slicers, weigh scales, time-keeping systems and punch-card machines.

The leading IT company in the world at the time CTR came into existence was Western Union, which was highly profitable but narrowly focused on wire communication. When the industrial revolution led to the digital revolution years later, IBM was the one that picked up on the trends first. The rest is, well, history.

Adding perspective to all of this, CEO Samuel Palmisano spoke to an invitation-only full house at the Computer History Museum in Mountain View. During a rare public appearance in Silicon Valley, he reflected on IBM’s first century and where he thinks it might be headed in the next one.

Plenty Of Lessons Learnt

“There are a lot of lessons you can learn from a company that’s been around for 100 years,” Palmisano (pictured), a 38-year veteran of the company, said. “You can see them in the museum here (in Revolution: The First 2000 Years of Computing, the current lead exhibit of computer hardware), for example.

“However, it does date you when you were trained on those products (in the exhibits)!”

Palmisano cited some statistics about a company being in business for a long period of time and remaining successful, despite the odds against it.

“Of the top 25 industrial corporations in the United states in 1900, only two remained on that last in 1961 (IBM’s 50th year), and one of those because it had absorbed six others from the original list,” he said. “Two companies had disappeared, and the remaining 15 had slipped far behind.

“Figures like this remind us that corporations are expendable, and that success at best is an impermanent achievement which can always slip out of hand.”

Palmisano cited a recent Harvard study of 6 million companies and how long they lasted in business. “Only 1 percent made it to 40 years, so you can imagine how rare it is for anyone to make it to 100 years,” he said.