PRINCIPLE 3
STRATEGY
From Operator to Allocator
Don’t tell me what you value. Show me your budget, and I’ll tell you what you value.
—Joe Biden, Vice President of the United States
THE STORY OF IBM IS A CLASSIC OF BUSINESS MODEL INNOVATION. In the 1990s, Lou Gerstner led a company transformation, moving away from a focus on hardware and infrastructure and adding new capability in IT services and consulting. Over Gerstner’s tenure, IBM’s market capitalization rose from $29 billion to $168 billion.
IBM’s journey continues; the market has not stopped moving—it has actually sped up. If it wants to remain a market leader, IBM must continue to shift away from its historical role in manufacturing physical goods and move toward newer digital technologies ...
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