As centennial looms, IBM CEO succession talk perks up

As centennial looms, IBM CEO succession talk perks up

Summary: IBM turns 100 on Thursday and that milestone has sparked some handicapping about CEO Samuel Palmisano's eventual replacement.


IBM turns 100 on Thursday and that milestone has sparked some handicapping about CEO Samuel Palmisano's eventual replacement.

According to the Wall Street Journal, IBM sales chief Virginia Rometty (right) is the front runner to become Palmisano's successor. Global Services chief Michael Daniels (left) is the No. 2 choice with Rodney Adkins (bottom right), senior vice president of hardware, No. 3.

Palmisano is reportedly seeking advice on the transition and expect the successor to become president or chief operating officer in the next year or so. IBM CEOs typically hand over the reigns at 60 and Palmisano hits that age in July.

Rometty would be a logical pick since she's directly tied to IBM's revenue line given her sales perch. Bloomberg Businessweek noted that Rometty would be the choice if Big Blue had to launch a succession plan this minute. Daniels is another solid choice given he also accounts for a big chunk of revenue via services. Adkins was able to keep the hardware business humming after senior vice president Robert Moffatt was arrested for insider trading.

Also see: CBS News: IBM turns 100

In any case, the next IBM CEO will have a tough act to follow. Since becoming CEO in 2002, Palmisano has shed units with low profit margins and transformed the company into a software and services giant. In addition, IBM has kept its research and development efforts humming along as it plots new growth markets such as mobility and commerce. The company has also bet big on analytics.

Meanwhile, IBM has set some heady earnings growth targets. Palmisano last year outlined Big Blue's 2015 roadmap and said he expects non-GAAP earnings of at least $20 a share in five years. IBM is also targeting $100 billion in free cash flow over the next five years.

Add it up and the next IBM CEO will have a solid plan already worked up. That plan revolves around the following:

  • Generate 30 percent of revenue from emerging markets by 2015;
  • Deliver $7 billion in cloud revenue in that time frame;
  • Lock in $16 billion in business analytics revenue.

In other words, the biggest part of the job description for IBM's next CEO will revolve around not screwing up a good thing. Keep in mind that Palmisano also had big shoes to fill. All he did was follow Lou Gerstner, who was credited with starting the IBM renaissance starting in 1993.

Topics: CXO, Banking, Enterprise Software, IBM

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  • Palmisano is just 59 years old; do not fix what is not broken; unless he ..

    ... personally tired and now only wants golfing and making worldwide sea cruising, he better stay.
  • RE: As centennial looms, IBM CEO succession talk perks up

    As IBM prepares a massive public relations campaign around the founding of IBM 100 years ago, employee morale in the US is rock bottom.
    Job cuts and mass terminations continue as IBM abandons the US workforce for cheaper overseas locations. It seems to most US employees that the ?churn and burn? in IBM just never stops.

    For those employees targeted for the recent resource action and for the over 15,000 who lost their jobs the past few years, a celebration of IBM?s founding will ring hollow. In Endicott, NY where IBM was founded, the company is almost non-existent. Abandoned by executives who have no loyalty to the community where it started.

    As the celebration gears up, the media and the country are seeing IBM presented through the eyes of the corporate executives, not the rank and file IBMer.

    While IBM ranks high in international rankings for business, the days of IBM being at the top for being one of the best places to work are long gone.
    IBM employees are forced to train their offshore replacement and then are terminated as the work moves out of the US. Fear of job loss rules the day for many employees.
    Pay raises have become a thing of the past while executives receive huge stock bonuses and options.
    Benefits have been shrinking.
    Respect for the employees who have made IBM great has disappeared and employees are treated as liabilities instead of assets.
    Retirees find that promises made became promises broken.

    To be sure, IBM employees around the world are proud of the work they do for the company.
    They are also civic minded, giving back to the communities where they work and live.

    IBM employees are simply saying to the CEO and the executives--give us respect, not empty words and public relations campaigns. Treat us as assets not liabilities. Call us people not ?resources?. Reward loyalty with concern for employees well being.
    Let us have a true voice in the workplace. Let us join our unions and the new IBM global union alliance free from intimidation.
    Do all that and more and there will be cause to celebrate.

    Lee Conrad
    National coordinator
    Alliance@IBM CWA Local 1701
  • IBM needs more to select a successor

    I think IBM needs a lot more time to choose and groom a successor to Palmisano.
  • RE: As centennial looms, IBM CEO succession talk perks up

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