gerstner: Louis Gerstner, CEO credited with turning around IBM, dies at 83

Core Insights - Louis Gerstner, who transformed IBM from a struggling company into a technology leader, passed away at the age of 83, as announced by current CEO Arvind Krishna [1][15] - Gerstner's leadership is often cited as a case study in corporate transformation, particularly for his strategic pivot from hardware to services [1][15] Company Transformation - Gerstner became IBM's first outsider CEO on April 1, 1993, during a time when the company faced potential bankruptcy or dismemberment [2][15] - He shifted IBM's focus from hardware production to business services, reversing plans to break the company into smaller units [2][15] - Cost-cutting measures included selling unproductive assets and reducing the workforce by 35,000 employees from a total of 300,000 [3][15] Cultural Changes - Gerstner emphasized teamwork across the company, moving away from loyalty to individual divisions and linking compensation to corporate performance [4][15] - He introduced a culture of accountability, advocating for regular performance assessments rather than annual reviews [4][15] Strategic Focus - A significant change was the abandonment of IBM's bundled product strategy, which limited compatibility with non-IBM products [5][15] - Gerstner prioritized middleware solutions, allowing IBM to serve as an integrator for various systems, regardless of the hardware brand [6][15] Market Impact - Under Gerstner's leadership, IBM's services revenue surged from $7.4 billion in 1992 to $30 billion in 2001 [9][16] - The company's share price increased from $13 to $80 during his tenure, and its market value rose from $29 billion to approximately $168 billion [9][16] Legacy - Gerstner viewed the creation of a truly integrated IBM as his most significant legacy, highlighting the challenges and risks involved in this transformation [10][16]