Common Sense of a Conservative 41

As I mentioned in my introduction, I worked at IBM for 28.5 years. In fact, it is the only career I have. After graduation from CCNY with an Engineering degree, I was hired by IBM in 1974. My career at IBM took several turns and I started in CPD as a development engineer and ended up in IBM Research Division as a Computer Scientist. I was fortunate enough to join IBM at its hay day and enjoyed a rewarding career that took me all over the world and learned all kinds of skills. For the most part, it was a very positive experience and I wouldn't trade it for anything else.
Despite the fact that I was laid off in 2002 as part of a "resource action", I still think IBM was a great company to work for. They treated me and other employees with respect and our layoff was handled professionally. My comments about IBM are drawn from my personal experience. It is a snapshot of a period in IBM's long history and from a particular perspective. My conclusions and opinions are my own and I stand by my words. This is a non biased critique of a once great corporation. I hope it will turn around someday and reclaim that title. I can divide my experience into several distinct periods. 1974-1983, 1983-1993, 1993-1999, 1999-2002, 2002-present. The last period is as an outsider after my layoff in July of 2002. I still have interactions with some colleagues within IBM. Their feedback regarding current working conditions at IBM is illuminating.

My first 10 years at IBM was working in a development laboratory at East Fishkill and later in Kingston NY. This is the heart of Hudson Valley and the primary location of IBM's mainframe development and manufacturing facility. Coming straight out of college, I didn't know what to expect. I joined a small advanced development team of engineers to design the next generation of microprocessors using VLSI technology. I was lucky to be part of this team because we were very successful in getting our work into the product line. I learned years later that IBM had a policy of creating several competitive groups working on similar projects. Only the best gets out the door. The success ratio was approx. one out of three. I was lucky to be in a group that had more successes and few failures. We received periodic recognition and awards and also promotions and raises on an annual basis. We were always told that our advancement and pay is tied to our performance. The principles of Thomas Watson were drilled into us. The "THINK" motto was on many desktop. Life was great and we took pride in working at one of the top companies in the world. They pay was above average and the benefits were one of the best around. I don't want to give the false impression that everything is great. There were political in fighting among the various technical leaders and there were bureaucracy in the business day to day operations. However, compared to other companies, we were the cream of the crop.

In 1983, I transferred to IBM Research located in Yorktown Hts. NY This was a big move for me. I was in a development group working in hardware design and simulation on products. This move to an advanced technology group located in the Research Division is a move up to a new level of sophistication. It would involve doing work on future enhancements and innovative ideas that may or may not be in a product. It would also involve new skills in programming. I would need to study for a Master degree in Computer Science at night to keep up. IBM was paying for the tuition and there were few risks on my part. After a short while, due to a re-organization, which happen in IBM on a regular basis like clockwork, our small group was merged into the Image Technologies Department of the Research Division. This means that we are now on an equal footing with PhDs and Advanced Researchers who are among the top Scientists in the world. I saw this as a great opportunity to work with some of the greatest minds and learn from them. Some of the colleagues are the top in their field in image processing and compression and color science. They were the inventors of numerous patents and the publisher of technical papers and books. I was honored to be working among this group and learned many ideas and practices that helped me to this day. It is during this period, I had the most creative ideas and inspirations.
This is also the period I got interested in Arts and libraries and new technology to help digitizing them for archives. We started with developing a pilot system for the famous American painter Andrew Wyeth and we launched a slew of projects that took us all over the world and brought fame to IBM technology.

Starting around 1999, there was a shift in IBM company policy and in my opinion, it contributed to the downward spiral of IBM as a company and as an industry leader. The thing that triggered this is the proposal to revamp the pension plan. The proposal to convert IBM's long standing defined benefit plan to a defined contribution plan is the main problem. The workplace has changed all over America for many years prior to 1999. The ideal of working for one company for the entire career is obsolete. People are more mobile and that required a change in the way pension plans are instituted. The sales pitch was that the plan is "better" because it allows for portability. You can take your pension with you when you move from job to job. The idea is a good one but the problem lies in the implementation. The accountants at IBM devised a plan where they can avoid paying any tax penalty due to the restructuring and at the same time reduce their long term promised benefits to many employees. The plan was done in such a way that it discriminated against the older workers. This has led to a class action law suit which IBM was found to be guilty and is currently under a court order to repay some of the losses. This could have been avoided if IBM would only do the right thing in the first place and institute a "revenue neutral" policy when converting to the new pension plan. That is to say, it should have compensated the older workers for the pension benefits earned and adopted the new pension for new employees. This would have been a fair plan and it would have avoided the law suit and more harmful the backlash from employees. I was one of the employees that even though was not affected by the latest change in pension (because I was given a choice to retain the old plan) became an outspoken critic of this new plan. What struck me as strange at the time was how insensitive the management treated this whole affair. Here we are, some of the brightest people hired by a top US Corporation, given little credit for recognizing a financial scam when it is presented. In defense of the Corp. Management team, the IBM Corp. was undergoing some difficult periods some of which was not under their control. The changes in the work place and globalization and the internet bubble all contributed to the financial pressures for IBM to perform for its shareholders. They thought this was a good way to kill two birds with one stone - help improve the pension outlook going forward and improve their bottom line at the same time.
The law of unintended consequence kicked in.

After September 11, 2001 happened, the company along with many others was hit financially and operationally. They were forced to re adjust the resources in response to the change in the market place. In a bold step, the company decided to lay off a large number of its workforce world wide. Unfortunately, I was part of that group that was laid off in July of 2002. Even though I was disappointed by this action, it did not affect me negatively to my own surprise. I felt relieved and I was able to rationalize this action by management as a way to "save" the company. If I was in a position of power, I would probably do the same thing.
From what I learned from colleagues, I did not miss much and in some way was blessed to leave at the time I did. The working environment at IBM went down hill from then on and may still be damaged to this day.

What I think IBM needs to do to get back into the drivers seat.

1. Be honest with its employees, treat then with respect and give them some credit.
2. Restore the principles of Watson; some good ideas never go out of style.
3. Convert all pension plans to 401K, (as being proposed this year) but give employees the full amount that was promised.
4. Make sure all executive compensations are tied to "true" financial performance-and not allow the accountants to play games with the books.
5. Get rid of the current PBC employee rating system and replace it with a team assessment plan. One that will reward people for collaborating with colleagues and not force them to compete against each other.
6. If necessary, postpone annual raises to long term employees to re-align compensation.
7. Take some bold initiatives with new products. (for example, the Apple iPod was a big winner last year. IBM invented the microdrive that went into the original iPod and yet IBM would never come out with this product. It would have been shot down as too commercial, not in the main stream of our product line, don't want to tangle with copyright issues of downloading music).
8. Don't allow the legal bureaucracy to tie up innovation for long periods of time. (Last year, Google started digitizing many books from public institutions and make them available online and searchable. IBM has the technology and the know how and the resources to do the same thing years ago. The reason they don't do it partly the fear of legal ramifications. )
9. Leverage their extensive patents portfolio to bring additional income for future R&D.
10. Buy new technologies that are relevant and don't be afraid of going out of the company for innovation. Not all good ideas comes from inside.

My experiences at IBM gave me an inside perspective on several controversial topics. I deliberately waited a few years before put down my thoughts on paper because I did not want my impressions to be influenced by my layoff. I hope to provide the facts as I see it.
The biggest blunder IBM made was its relations with Microsoft. IBM allowed a small PC software company started by Bill Gates to run rings around the giant Corp. who at the time dominated the Computer industry. How could this happen? In my opinion, and of many insiders at the time, Microsoft engaged in deceptive practices and misled IBM over the development of the OS/2 operating system. This led to a lawsuit that was just recently settled by Microsoft where they paid IBM several hundred million dollars in damages. This is too little too late penalty that allowed Microsoft to monopolize the PC industry over the last 20 years. IBM was not the only victim as were numerous other companies. Bill Gates, the richest man on earth, along with his Foundation and his recently named "Person of the Year" by Time magazine in 2005, is not the kind and generous philanthropist he portrays. His ruthless tactics bordering on criminal activity is one of the reasons Microsoft is as successful today. There have been several books written on this topic so I won't go into details.

When I was laid off back in 2002 along with 60 others in the IBM Research Division, I was disappointed but not devastated as most people would be. I realized the state of IBM was not good and that the Management had to take some tough and drastic measures to preserve the viability of the company. The writing was on the wall for several years and I guess most of us were in denial. I for one thought we could change the company from within. I was one of the voices that cried foul with the new pension reform back in 1999. I was also outspoken about the annual PBC (personal Business Commitment) evaluation ratings. This was an HR implementation to measure employee productivity and it was tied to annual raises and bonuses.

Financially, our family was well off. We had savings and I have the IBM pension which was reduced due to my early termination but still was helpful. In fact, during my 25th anniversary with IBM back in 1999, I had commented on my planned early retirement when I reach 30 years of service. This layoff just moved my timetable up by about 2 years. I always wanted to do something for a charitable organization. Now, I have the time to explore this.

Now almost 5 years later, I think I was blessed. Though at the time, I didn't know what to expect, I did have the confidence that everything will work out. Now I can say, someone was watching over me. I was spared of several years of down sizing. I had time to pursue my other interests.
By the way, of all the colleagues that I know personally that was laid off at the same time, all of them have found other employment. They are happier now more than ever. They are in the same state as I am.
Latest News - After nearly 5 years, I have found a new position with Jawonio. It is a non-profit organization that tries to help people with disability to live an independent life. I started my job this past week 6/27/2007 as an Document Imaging Specialist.

My assessment of what if and what did happen over the last 5 years:

If I had stayed with IBM:
1. I would have probably done the same work that I was doing for the last 10 years.
2. I would have made more money (IBM salary) but paid more taxes.
3. I would have been outspoken about some of the practices and be frustrated and demoralized as some colleagues that stayed have confessed.

Instead, here is what did happen:
1. I had time to create a Family Tree website.
2. I am volunteering P/T at the Westchester Archives.
3. I am spending more time with my youngest son Jason.
4. I am a volunteer with www.nabuur.com
5. I am managing my own IRA investments.
6. I am active in fencing again after 25 years off.
7. I am doing digital photography as a hobby.
8. I am participating in Squidoo as a lensmaster.
9. I am finally able to write my book.
10. I have spare time to help some of my neighbors.

There is just no comparison between the two. I guess God knows best. He closed one door and opened 10 others. I am grateful for his support.

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