how ibm develops global leaders
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Read about some of the differentiators that made IBM #1 on Fortune Magazine's Top Companies for Leaders since 2009.TRANSCRIPT
Michael Bazigos, PhD Strategy and Change Executive, IBM Talent
12 May 2011ay 0
How IBM Develops Global LeadersMETRO Association of Applied PsychologistsMETRO Association of Applied PsychologistsNew York, NY
© 2011 IBM Corporation
This document is an incomplete representation of the presentation without the speaker’s accompanying comments.
How IBM Develops Global Leaders
We began as a small company in a different era, and have been in b i f 100business for 100 years
International Business Machines
1924
Tabulating Machine Corporation
1893
© 2011 IBM Corporation2
How IBM Develops Global Leaders
Insert slides re: changes from annual report
© 2011 IBM Corporation3
1970 1980 1990 2000
How IBM Develops Global Leaders
© 2011 IBM Corporation41992 Current
How IBM Develops Global Leaders
Years ago, we saw change coming, and began changing the business mix g , g g, g g gto higher-value, more profitable technologies and market opportunities
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How IBM Develops Global Leaders
Today we run a business model that delivers long-term valueToday, we run a business model that delivers long-term value and high performance
Key objectives over the next five years:G th k t h 30% f hi• Growth markets approach 30% of geographic revenue
• Software becomes about half of segment profit
• $100 b in free cash flow$• $70 b of capital returned to shareholders
• $20 b in spending on acquisitions
© 2011 IBM Corporation6
* Excludes acquisition-related and nonoperating retirement-related charges.
** 2000 & 2001 exclude Enterprise Investments and not restated for stock-based compensation. Sum of external segment pre-tax income not equal to IBM pre-tax income.
How IBM Develops Global Leaders
Business strategy
GROWTH CLOUD BUSINESS SMARTERGROWTH MARKETS
CLOUD COMPUTING
BUSINESS ANALYTICS
SMARTER PLANET
Approach 30% of geographic revenue by
$7 billion in revenue by 2015
$16 billion in revenue by 2015
$10 billion in revenue by 2015
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2015
How IBM Develops Global Leaders
We became a globally integrated enterprise, improving productivity and t i thcapturing new growth
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How IBM Develops Global Leaders
M j M k t G th M k tMajor Markets vs. Growth Markets
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Source: 2008 IBM Annual Report
How IBM Develops Global Leaders
LEADERSHIP FOR GROWTH MARKETS
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How IBM Develops Global Leaders
20 countries for selected market expansion and growth
IT Market Size & GrowthIT as a % of GDP
Market Expansion
Russia
RussiaMacro-economicBusiness EnvironmentPolitical EnvironmentHuman CapitalPhysical Infrastructure Russia
ChinaSouth Korea
Czech RepublicPoland
Economic RecoveryGovernment Effectiveness
Mexico
Saudi Arabia
China
VietnamUAE
Thailand
Philippines
India
Taiwan
AustraliaBrazil
ChileSouth Africa
Thailand
IndonesiaSingaporeMalaysia
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How IBM Develops Global Leaders
IBM is expanding into new markets and creating branches in established countries
2015
74
2010
56Countries with ff
2000
42
Market Expansion
2015
45574
2010
26156
Branch Offices
Countries with IBM offices
2000
9542
Riga MoscowP
455
74
261
56
Branch Offices
IBM offices
95
42
455261Branch Offices 95
MonterreyCasablanca
MumbaiCairo
D b i
KarachiTunis
ZagrebBudapest
Warsaw
Islamabad
Sofia
Prague
Istanbul
Bucharest
Lahore
Kiev
DelhiBeijing
GuangzhouShanghai
SeoulBusan
GuadalajaraBarranquillaMedellin Valencia
Caracas
Mexico City
BogotaCaliQuito
LimaArequipa
Fortaleza
BrasiliaRecife
Salvador
Dubai
Kuala Lumpur
HanoiBangkok
Singapore
Jakarta
Bangalore Manila
Northern Territory
Mendoza
Tucuman
Santiago
Antofagastaq p
CordobaSao Paulo
Porto AlegreMontevideo
Buenos Aires
Belo HorizonteRio de Janeiro
JohannesburgCape Town Durban
Victoria ACTNSW
QueenslandNorthern Territory
Western Australia
Wellington
Auckland
ChristchurchTasmania
© 2011 IBM Corporation1212
How IBM Develops Global Leaders
IBM has invested in growth markets in infrastructure & skills for long t thterm growthA Globally Integrated Enterprise
Poland
Czech Republic Slovakia
RussiaResearch Lab
Global Delivery Center
Cloud Computing Center
Software & Hardware Lab
Innovation Center
China
Romania Hungary
Egypt
Turkey
MoroccoMexico
South Korea
Telecommunications
Natural Resources
Cloud Computing CenterMicro-financing Hub
Vietnam
Philippines
Malaysia
SingaporeBrazil
IndiaRail
HealthEnergy
Finance
South AfricaAustralia
Argentina
RetailPeruPeru
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How IBM Develops Global Leaders
IBM has become a globally integrated enterprise in order to capture th b t th t iti d i fit bilitthe best growth opportunities and improve profitability
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How IBM Develops Global Leaders
Global Enablement Teams
Program links small teams of global executives to IBM country leaders and their teams in emerging economies
Deepen global mindsets
Enable competence in cultural adaptability
Better connect local country h l b lteams to the global company
agenda
Consistent with our philosophy f l d d l i l dof leaders developing leaders,
leaders developing themselves
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Khazakhstan
How IBM Develops Global Leaders
Eighteen countries have been commissioned across three waves
1 2 3WAVE 1• Egypt
K kh t
WAVE 2• Chile
C h R bli
WAVE 3• Argentina
C l bi• Kazakhstan
• Mexico
• Nigeria
• Czech Republic
• Indonesia
• Malaysia
• Columbia
• Hungary
• Philippines• Nigeria
• Poland
• South Africa
• Malaysia • Philippines
• Saudi Arabia
• Slovakia• South Africa
• Vietnam
• Slovakia
• Thailand
© 2011 IBM Corporation16
How IBM Develops Global Leaders
Program Results
Positive reaction to program by both GET members and country leaders
Increased knowledge and capability in:g p y– developing strategy and–executing strategy
Country leader behavior change Country leader behavior change
Business continuity during times of challenge and change
© 2011 IBM Corporation17
How IBM Develops Global Leaders
Corporate Service Corps A global training ground to develop
leaders in strategic emerging markets
Short-term assignments that engage IBMers with communities, governments and non-governmental organizations
Since July of 2008, we have sent more than 1,000 IBMers globally to 20 countries
IBM clients launching or considering similar programs: Deere, Dow, Corning, FedEx, JP Morgan Chase, g, , g ,Novartis, Pepsi
US Agency for International Development (USAID) collaborating
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Development (USAID) collaborating with IBM to help smaller companies create their own programs
How IBM Develops Global Leaders
The growth agenda has been infused throughout the talent management process
Topline organization redesign: Growth Market Unit (GMU)
Deep dive reviews of leadership talent pipelines
Chairman involvement in GMU leadership developmentChairman involvement in GMU leadership development
Competency model revalidation (next section)
University partnerships
Assessment Centers: “Global Development Centers”
Mobility assignments
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How IBM Develops Global Leaders
Linguistically diverse teams can either build incredible solutions... or t t t f b bblconstruct a tower of babble
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Patented IBM translation technology at the League of Nations, Geneva, 1931
How IBM Develops Global Leaders
Enter n.Fluent…
Translates English to and from:– ArabicArabic– Chinese (simplified and traditional) – French– German
Italian– Italian– Japanese– Korean – Portuguese g– Russian – Spanish
Crowdsources translation corrections to improve the software in real time
More secure than external providers
Next step: speech-to-speech
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Next step: speech-to-speechtranslation (“MASTOR”) in beta
How IBM Develops Global Leaders
COMPETENCIES
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How IBM Develops Global Leaders
The IBM Leadership Framework
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How IBM Develops Global Leaders
In 2010 IBM announced a new set of nine capabilities called “IBMers at our B t”
Embrace challenge
Best”
Partner for clients' success
Collaborate globally
Act with a systemic perspective
Build mutual trustIBMersat our
Influence through expertise
Continuously transform
Best
Communicate for impact
Help IBMers succeed
© 2011 IBM Corporation24
How IBM Develops Global Leaders
Act with a systemic perspective
IBMers are systems thinkers. We help our clients, our colleagues and the world understand and design the essentialunderstand and design the essential dimensions of any system – how it senses, maps and analyzes information, detects underlying patterns, and translates that knowledge into belief and
Thinking Systemically
Gathering data to identify roottranslates that knowledge into belief and action. We help others see this end-to-end view, synthesizing information from many dimensions – whether the system in question is technological economic
Gathering data to identify root causes
Making timely and effective d i iin question is technological, economic,
societal, cultural or natural. This systemic view allows us to frame problems properly, and to take the right action in the right way at the right time It also lets
decisions
Acting decisively, taking risks when appropriatethe right way at the right time. It also lets
us anticipate the impact of our actions on others. Knowing all this, we act wisely while boldly taking the right risks.
pp p
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How IBM Develops Global Leaders
Competencies Explain Most of What Matters to PerformanceRelative contribution of competencies to performance
© 2011 IBM Corporation26All underlying correlations statistically significant. Odds of a chance finding are less than 1 in 100. Data sources:Senior leaders’ 360-degree competency ratings (“Total Others”) and performance ratings by their manager
Factors Influencing Performance Ratings Breakdown of the 56%
Competency Portion
How IBM Develops Global Leaders
Does a 56% explanation matter? Compared to what?
LINKAGE r % variance explained
Smoking and lung cancer after 25 08 < 1%Smoking and lung cancer after 25 years*
.08 < 1%
Antihistamines and reduced nasal discharge*
.11 1%
Ibuprofen and pain reduction* .14 2%
Height and weight of US adults* .44 19%
SAT (verbal) and freshman GPA** .47 22%
SAT (math) and freshman GPA** .48 23%SAT (math) and freshman GPA
IBM Competencies and executive performance
.75 56%
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* Hogan, R.T. (2011). Issues, controversies, and advancements in workplace assessment . Panel discussion at the 2011 Conference of I/O Psychologists, Session #193.
** http://fairtest.org/sat-i-faulty-instrument-predicting-college-success
How IBM Develops Global Leaders
IBMers at Our Best: Creating the Future of IBM
LeadershipCapabilitiesExpertise + +
Leadership Competencies:
B h i i IBM
Career Capabilities:
Th b d lifi i
Job Role Expertise:
C bi i f kill Behaviors unique to IBMersthat distinguish the
company.
The broader qualificationsto grow and flourish in achosen career at IBM.
Combination of skillsand behaviors
required to perform aspecific job at IBM.
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How IBM Develops Global Leaders
SELECTING FOR GROWTH
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How IBM Develops Global Leaders
Approach
New scoring process was used to retro-score MD incumbents and place them into three categoriescategories
– Recommend– Needs Development / Not at this time– Not recommended
Two assessments were then made– Comparison of utility gains for prediction of new selection method vs. “Acme” firm’s
predictionspredictions– Revenue dollar utility of the incremental gain in selection accuracy
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How IBM Develops Global Leaders
Populating the MD role with superstars begins with accurate identification
Identifying Superstar MDs
History 15%
20%
R suggests an multi-billion 3-year gain
for MDs10%
15%
enue
CA
GR
for MDs using the
new, robust assessment
0%
5%
3-Ye
ar R
eve
-5%
0%Not recommended Needs development /
Not RecommendedRecommended
Assessment Status
© 2011 IBM Corporation31
Assessment Status
How IBM Develops Global Leaders
Our stress test retro “selected” top 39%. Resulting success rate of 82% is in line ith ( d d ) i d t b h k h di i i ti t th 40% l lwith (and exceeds) industry benchmarks when discriminating at the 40% level.
82%
IBMBenchmark
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Source: “Business value of employee selection”, Wayne Cascio, 11/2009, NYC to METRO Applied Psychology Association
How IBM Develops Global Leaders
External estimates of executive success rates
82%
90%
60% 61%
70%
82%
70%
80%
50%
60%
40%
50%
60%
33%
20%
30%
40%
0%
10%
Peter Drucker ti t (1985)
Hogan, Hogan & K i (I )
Old (BEI) MDd ti (2002
Actual IBM MD assessment (2002 2009)
Jack & Suzy W l h (2007)
New IBM MD t
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estimate (1985) & Kaiser (In press) recommendations (2002-2009)
(2002 - 2009) Welch (2007) MD assessment(2009)
How IBM Develops Global Leaders
Q ti ?Questions?
© 2011 IBM Corporation34
How IBM Develops Global Leaders
Michael N. Bazigos, PhD
[email protected]@columbia.edu
www.bazigos.com
Connect with me on :http://www linkedin com/in/bazigoshttp://www.linkedin.com/in/bazigos
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