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Excerpts from Cracking the Corporate Code

Ira Hall has always been able to use power effectively. He is bolder than most people dare to contemplate, and he lives to tell about it. He has an analytical mind, and he enjoys tackling the most challenging puzzles he can find. "In addition to understanding the conventional wisdom, I like to make my own observations, make sure that things are right from my own point of view rather than just accept the numbers. Just because the numbers are on or above plan doesn't mean everything's okay." Here is one puzzle he solved at IBM.

"As head of corporate business development, I had the opportunity to see the operations and detailed business results of all business units, as well as a wide variety of IBM acquisitions, divestitures and joint ventures. By most external financial analyses, IBM was doing very well. Although I wasn't responsible for improving the results of existing operations, I concluded that we had room for some substantial improvements. For example, I believed the company could better create shareholder value by more focus on managing cash flow from operations in addition to the focus on profit, and more focus on gaining market share in addition to just revenue growth. Key drivers were the affordability of the asset investments and shareholder dividends relative to the cash flow being generated. We needed to 'right size' the asset investment and be geared to where the market was headed. These observations were outside the scope of my job responsibilities. One of the biggest challenges I perceived was how to remain a team player and yet exert the leadership required to bring new recommendations to the senior executive management.

"When I was elected a corporate officer after two years with the company, I shared these and other observations and recommendations with the chief financial officer, and he encouraged me to share them with the chairman. The chairman decided I should present the observations and recommendations concurrently to him and the rest of the management committee, the seven most senior company executives. I was acutely aware of the risks of such a presentation and in fact proceeded with some trepidation. It is fair to characterize the session as very intense. I worked hard to ensure that my objectives were increased shareholder value and greater customer satisfaction, rather than just random observations. I also made sure that each point was substantiated with analysis and appropriate benchmarks. I could see the chairman understood with crystal clarity every point I was making. But I questioned silently why I ever voluntarily entered into what I increasingly perceived as a high risk/low reward situation.

"Fortunately the chairman agreed with all of the recommendations and concluded the session by asking that I lead an effort to disseminate this perspective throughout senior management. The management committee embraced these thoughts and invited me to work with their respective senior executive teams. I worked just as hard during each subsequent session to remain a team player working to improve shareholder value and customer satisfaction, rather than just a critic. It was important to remain well-liked and well-trusted in addition to well-respected."