When sales has precedence over product…

You end up with a technology company like IBM?

In a set of articles on IBM, Robert X. Cringely argues that IBM is on the verge of reducing its US work force by more than three quarters by 2015. He states “The direct impetus for this column is IBM’s internal plan to grow earnings-per-share (EPS) to $20 by 2015. The primary method for accomplishing this feat, according to the plan, will be by reducing US employee head count by 78 percent in that time frame.

Further he quotes an abstract from his film Steve Jobs – The Lost Interview with what Jobs had to say circa 1995 about IBM. He believes it still applies today.

“If you were a product person at IBM or Xerox, so you make a better copy or a better computer, so what?” Jobs asked rhetorically. “When you have a monopoly market share the company is not any more successful.   So the people that can make the company more successful are sales and marketing people and they end up running the companies and the product people get driven out of decision making forums.  And the companies forget what it means to make great products.  Sort of the product sensibility and the product genius that brought them to that monopolistic position gets rotted out by people running these companies who have no conception of a good product versus a bad product.  They have no conception of the craftsmanship that’s required to take a good idea and turn it into a good product and they really have no feeling in their hearts usually about wanting to help the customers.”

Its this last paragraph that holds significant resonance with myself. I see it here in Australia with the IT providers. The management teams are Sales and Marketing. That is they do not understand what makes a good or bad product. They just sell what customers appear to want to buy. If something doesn’t sell, they move onto the next product.

Cringely further goes on to say “This is the first thing to understand about the IBM of today: the company is being run by executives who for the most part don’t understand the products and services they sell.  The IBM of today is a sales organization.  There is nothing wrong with sales if you can also deliver, but increasingly IBM can’t deliver.”.

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