“In today's world, where everyone is so interconnected and interdependent, it is simply essential that we work for each other's success. If we're going to solve the biggest, thorniest, and most widespread problems in business and society, we have to innovate in ways that truly matter.”
—Samuel Palmisano, president and CEO of IBM
In the early nineties, IBM set a new record for the biggest annual loss in U.S. corporate history. But in the decades since, the company’s recovery — and its transformation from tech giant into globally-renowned provider of cutting-edge solutions for complex problems — has become one of the business world’s most celebrated success stories. Management strategies, emerging markets, and other factors discussed at the MBA level are part of the story.
However, a deeper look into IBM reveals one key factor that plays a profound role in company’s success: empathy.
We asked IBM Global Leader Tony Tenicela to explain IBM’s famed turnaround, and the principles and practices that continue to govern its success today. He described a company that is putting diversity first — not as a chivalrous act of good corporate citizenship, but because it’s good business.
In his role as global business development executive, Tenicela oversees IBM’s efforts to create workforce diversity and serve lesbian, gay, bisexual, and transgender (LGBT) markets, and consults with business clients around the world looking to leverage diversity for business growth.
IBM has had to pay close attention to the needs, passions, and interests of the diverse communities it serves — a challenge that requires stepping into the shoes of its customers everyday. It also means stepping into the shoes of its own workforce.
Tenicela has played a key role in helping IBM understand and serve a wide range of client needs. He explained that maintaining this competency requires a high level of empathy from all employees, each of whom must be able to collaborate effectively with people whose backgrounds and experiences are vastly different from their own.
In this interview, Tenicela explains what it takes to be a successful IBM employee today, why they’re using the virtual world Second Life, and what other companies can do to put empathy and diversity into practice:
Ashoka: What role did diversity play in IBM’s own evolution, and in the company’s modern-day success?
Tenicela: It’s gratifying to me that IBM’s transformation story is directly tied to the evolution of our diversity story. In order to empower this change we looked at what was available internally within IBM: what made us different as a company, and what we were really good at doing. As a result, Lou Gerstner, our CEO in the early ’90s, turned to various diverse communities within the company, and their feedback helped us move beyond our IT-centric strategy. IBM had a long history of promoting diversity, but now we began to formalize the way we address diversity as a business strategy, which served as the foundation for how we’ve reinvented ourselves.
"It’s precisely our diversity of voices and perspectives that’s enabled us to uphold a real spirit of innovation throughout the company."
Ashoka: What skills make for a successful employee at IBM?
Tenicela: Being a creative leader requires a mental agility and level of open-mindedness that allows you to move seamlessly between the virtual world and the conference room: to think at scale and in a global context, without losing sight of local realities, as well as your own experiences. In a company as big as ours, we need team players who can work toward a long-term mission, and do so in sync. While IBMers are universally results-oriented, and relentlessly collaborative, it’s imperative that we also remain focused on encouraging individual creativity and open to innovation.
We’re a globally-integrated company, which means each IBMer must be culturally adaptable, and sensitive to the unique needs and temperaments of the various markets in which they work. You can’t work for a company with 400,000 employees in 170 countries without empathy — without the ability to embrace differences, to listen, and to adapt your language and approach to the unique cultural context you’re dealing with.
Ashoka: We often find that institutions — whether you’re talking about a school or a company — struggle to take their values beyond slogans and policy statements and put them into practice. What structures do you have in place to translate ethos into action?
Tenicela: It’s precisely our diversity of voices and perspectives that’s enabled us to uphold a real spirit of innovation throughout the company.
We put a lot of energy into building camaraderie among employees and management alike, which is absolutely critical to maintaining empathy and mutual respect. We’ve developed a strong virtual community, so that employees get to know each other across team and managerial lines. It doesn’t replace face-to-face, but it absolutely enhances the employee experience.
We have an island on Second Life, where even our former CEO has an avatar. Some of our diverse communities have their own spaces where they hold meetings. One of the biggest challenges is getting people together, so we created these online auditoriums as an alternative way to get people together and to have some fun with it.
We’ve found that when we invest in our employees — in their opinions, in their particular skills and talents, and in the issues that are important to them — they become more invested in us. It’s that simple.
Ashoka: You spend a lot of time helping companies leverage human capital, corporate diversity, and corporate social responsibility as strategic business drivers to generate new business opportunities. What tips would you offer business leaders looking to follow your lead?
Tenicela: Empathy starts with listening, and listening is the basis of smart business practice. So a corollary to that is to find ways to empower leaders within the diverse communities you serve to make recommendations to your senior leadership. Find out what they’re looking for, and ensure their voices are felt at the very top.
Diversity is not an HR program. It’s an integral component of your business strategy. It’s key to staying ahead of the game, and avoiding groupthink. It’s key to delivering an enhanced customer experience. If you can learn to make that case, and to live by it, it will engender far greater trust within the company.
Customers, whether they’re individuals or businesses, want a level of intimacy with the companies that serve them; they want to know their interests are understood. In a globalized world, the success of your business model depends on understanding each of your markets at a very deep and authentic level, and having the practices to back that up.