Entrenched organizational culture is the biggest challenge two of Fortune magazine’s most powerful women leaders, Ginni Rometty of IBM and Janet Yellen of the Federal Reserve Bank, are dealing with. And when I read about their corporate cultures and problems, one seems to have a better chance of success than the other. Let me start with Ginni Rometty.

Ginni Rometty

Ginni Rometty, who was named Fortune’s most powerful woman business leader this year, certainly has her hands full. Rometty, 58, is the ninth CEO of IBM, where she started as a systems engineer 33 years ago. IBM is a huge bureaucracy with many layers built over 103 years – it now has 431,000 employees operating in 170 countries. The problem Rometty now faces is how to get the company to evolve with the times and move forward successfully without fighting change, instead of staying stuck in the past and losing customers to competitors.

Rometty knows IBM has to change internally or it will slowly die. And, while she is very aware that everything she does is scrutinized by employees, shareholders, competitors, and bloggers like Bob Cringely, she seems to have all the qualities needed to achieve substantive change, even if she does not please everyone.

In the Fortune article examples of Rometty’s effective communication and collaboration styles are described. They also share three of “Ginni’s Rules”: 1. Don’t protect the past; 2. Never be defined by your products; and 3. Always transform yourself.

Using regular webcasts and a new training program called “Think Academy”, she is now in touch with and getting input from thousands of employees across the globe. John Kelly at IBM was quoted as saying, “She has this unique ability to make you comfortable in the change while still being uncomfortable. It’s really hard to explain.” Rometty’s vision for IBM’s reinvention is to concentrate globally on big data, cloud services, and engagement (mobile and social networking technologies).

Rometty has used her collaborative skills to partner with Apple, a former competitor, to cross-sell each other’s business services. Tim Cook, the CEO of Apple, says this of Rometty: “I think she is wicked smart…she has an incredible ability to partner and can make tough decisions and do so decisively. And she sees things as they really are.”

It sounds to me with Rometty’s leadership skills, IBM has a fighting chance to innovate and change – something most large bureaucracies cannot do, and they usually shrink and die.

This brings me next to Janet Yellon, Chair of the Board of Governors of the Federal Reserve System. Honestly, her challenge is almost too large and complex for one human being. I will briefly explore the organizational abyss that is the Federal Reserve Bank next, in Part 2. 

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