Three interesting facts about IBM. It has shifted away from reliance on marketing computers. It has appointed a female insider as leader. And Warren Buffett has invested heavily in the oldest of technological giants.
Although this is a story about IBM, it is also one about Warren Buffett, pictured here, arguably a very atypical business leader. (Maybe there is no ‘typical’ business leader, but that’s a digression).
Decline of the heroic leader
The decline in news stories about successful leaders has been noticeable since the heady days when I began collecting them for LWD some five years ago. Even the BBC has spotted the trend, identifying recent research which adds to suspicions of the hero-worship approach to studying CEOs.
That old war horse rides again
So it give me some pleasure to mention that old war-horse Warren Buffet, and IBM a company once lauded as the world’s biggest technological giant and now re-inventing itself as a software house. Buffett, who bought a railroad in his biggest acquisition, turned to a century-old technology company in the third quarter to help guard his Berkshire Hathaway Inc. against economic slumps.
Business Week outlines the developing story [15th Nov 2011]:
Buffett has [recently] spent more than $10 billion buying International Business Machines Corp. stock, his biggest investment in the period. The stake gives Berkshire 5.5 per cent of a company that has moved from competition with Apple and Dell to focus on providing business clients with software and services. IBM sold its personal-computer business in 2005 and has beaten the Dow Jones Industrial Average each year since.
Buffett, 81, [An ‘ageist ’ comment? But I would have mentioned it, too… ED, LWD] has built Berkshire to withstand recessions and market declines by seeking firms with lasting competitive advantages, or what he calls “moats.”
Buffet bucks leadership fashion
One endearing aspect of Warren Buffett stories is the manner in which he avoids fashion in his investment decisions and in his leadership style. It is hard to fit him into the mould of the corporate CEO identified with a great vision. His charisma is that of reputation rather than idealised influence.
Warren as a thought leader
It is easier to see him as a thought leader rather than a transformational figure. His company goes on succeeding as safe rather than innovative. His reputation is as a safe pair of hands, which places him in the category of ‘manager not leader’ according to one way of distinguishing between the two labels.
He has now become interested in IBM which has long passed through the stage of being labelled a technological innovator. It grows its own leaders internally, risking remaining within its famed IBM culture while failing to bring in the brightest charismatics that money can buy…
On the other hand
On the other hand, IBM is about to appoint as leader one of the few females in Corporate America’s boardrooms. Insider Virginia Rometty will take over from her mentor Sam Palmisano in January 2012. In an earlier post LWD covered her appointment
The image of Warren Buffett above is from Reg Trembley’s insightful blog The Director’s Cut.