I am not saying we should require all politicians to hold engineering degrees, but it would be helpful if they had a basic understanding of the forces that are flattening the world, were able to educate constituents about them and galvanize a response. We have way too many politicians in America today who seem to do the opposite. They seem to go out of their way actually to make their constituents stupid-encouraging them to believe that certain jobs are “American jobs” and can be protected from foreign competition, or that because America has always dominated economically in our lifetimes it always will, or that compassion should be equated with protectionism. It is hard to have an American national strategy for dealing with flatism if people won't even acknowledge that there is an education gap emerging and that there is an ambition gap emerging and that we are in a quiet crisis. For instance, of all the policy choices that the Republican-led Congress could have made in forging the FY 2005 budget, how in the world could it have decided to cut the funding of the National Science Foundation by more than $100 million?
We need politicians who are able and willing to both explain and inspire. And what they most need to explain to Americans is pretty much what Lou Gerstner explained to the workforce of IBM when he took over as chairman in 1993, when the company was losing billions of dollars. At the time, IBM was facing a near-death experience owing to its failure to adapt to and capitalize on the business computing market that it invented. IBM got arrogant. It had built its whole franchise around helping customers solve problems. But after a while it stopped listening to its customers. It thought it didn't have to. And when IBM stopped listening to its customers, it stopped creating value that mattered for its customers, and that had been the whole strength of its business. A friend of mine who worked at IBM back then told me that when he was in his first year at the company and taking an internal course, his IBM instructor boasted to him that IBM was such a great company, it could do “extraordinary things with just average people.” As the world started to flatten, though, IBM found that it could not continue thriving with an overabundance of average people working for a company that had stopped being a good listener.
But when a company is the pioneer, the vanguard, the top dog, the crown jewel, it is hard to look in the mirror and tell itself it is in a not-so-quiet crisis and better start to make a new history or become history. Gerstner decided that he would be that mirror. He told IBM it was ugly and that a strategy built largely around designing and selling computers-rather than the services and strategies to get the most out of those computers for each customer-didn't make sense. Needless to say, this was a shock for IBMers.
“Transformation of an enterprise begins with a sense of crisis or urgency,” Gerstner told students at Harvard Business School, in a December 9, 2002, talk. “No institution will go through fundamental change unless it believes it is in deep trouble and needs to do something different to survive.” It is impossible to ignore the parallel with America as a whole in the early twenty-first century.
When Lou Gerstner came in, one of the first things he did was replace the notion of lifetime employment with the notion of lifetime em-ployability. A friend of mine, Alex Attal, a French-born software engineer who was working for IBM at the time, described the shift this way: “Instead of IBM giving you a guarantee that you will be employed, you had to guarantee that you could stay employable. The company would give you the framework, but you had to build it yourself. It's all about adapting. I was head of sales for IBM France at the time. It was the mid-nineties. I told my people that in the old days [the concept of] lifetime employment was only a company's responsibility, not a personal responsibility. But once we move to a model of employability, that becomes a shared responsibility. The company will give you access to knowledge, but you have to take advantage of it... You have to build the skills because it will be you against a lot of other people.”
When Gerstner started to change the paradigm at IBM, he kept stressing the issue of individual empowerment. Said Attal, “He understood that an extraordinary company could only be built on a critical mass of extraordinary people.”