10 Leadership Lessons Taken From IBM (Part 1)

For 20 years beginning in the 1960s, IBM was king of its universe: the mainframe computer. Then came along such interesting start-ups as Microsoft, Intel and Dell and, as personal computers became more powerful, IBM’s mainframe business could no longer support the company. Like healthcare providers today, IBM had the choice of transforming itself or going the way of the dinosaurs.

In an article published in Forbes in March 2012, August Turak, a beneficiary of IBM’s leadership principles, a co-founder of MTV, and a Winner of a John Templeton Award, writes of lessons learned.

First, a bit of background will be helpful. IBM hired the Educational Testing Service (ETS) (the same company that still does the SAT) to identify the traits of great leaders. ETS identified proven leaders across multiple industries, identified their individual traits, and reported their results to IBM. The problem was ETS could not identify a consistent set of traits possessed by these leaders.

After months of probing the ETS data and countless meetings, IBM executives had an epiphany: while supervisors and middle managers could learn the skills they needed to “get the job done,” leaders had to determine what “the job” was and communicate it to those who were to do it. Here are the first five lessons that came from the Institute as part of its transformational process.

  1. Great leaders thrive on ambiguity. Most of us prefer black-and-white answers – they don’t take much brainpower and you can check it off the list of 50 Things I Needed To Finish Yesterday. The problem is that problems with black-and-white answers are not the problems of leaders. A more typical problem is “I need to cut expenses but increase my capital spending.” Leaders love that kind of Catch-22 – seemingly contradictory goals both of which must be satisfied.
  2. Great Leaders Love a Blank Sheet of Paper. I was recently in a negotiation with a hospital on behalf of a large physician group which was seeking a dedicated hospital board seat as part of the transaction. The hospital CEO responded that there was no policy permitting dedicated board seats. We urged him to re-think that position since this physician group was more than three times larger than any other group in the community. Rather than be bound by policies-and-procedures, leaders want to take a fresh look at a problem to see if the current way is the best way.
  3. Great Leaders Are Secure. In my almost 40 years as a health care administrator and a lawyer, I have tried to avoid those in leadership positions who are insecure (they are the ones in ever-constant fear of being fired). Great leaders are “secure in their own skin,” relish a challenge, and know that conflict is just the first stage toward resolution if the conflict is based on good-faith differences.
  4. Great Leaders Can Face the Facts. To be a great leader, you must have the trust of those with whom you work. I was on the telephone earlier today with a physician-leader dealing with a hospital distrusted due its habitual dishonesty. While the hospital was faced with uncomfortable choices, the facts were not a secret and the hospital’s pretense otherwise was costing it important relationships.
  5. Great Leaders Command Only as a Last Resort. I have had the good fortune to negotiate for and across the table from a number of terrific hospitals and health systems. These hospitals/systems shared their lists of interests with their potential physician-partners and were just as eager to hear about the physicians’ interests. There have been other hospitals whose idea of negotiations was “our way or the highway,” at least until physicians began choosing the highway. Persuasion and reason are not only superior to demands in both negotiations and management, it is the only way for a leader.


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