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Foreword: Of Change and Progress 6

pioneering the scienceof Infor tion 14Sensing 20

Memory 36Processing 52Logic 68Connecting 88

Architecture 102

einventing themoern Coror tion 134 The Intentional Creation of Culture 142Creating Economic Value from Knowledge 168Becoming Global 198How Organizations Engage with Society 222

m ing the WorWor Better 244Seeing 258

Mapping 268Understanding 278

Believing 296 Acting 310

Acknowledgments 328Notes 329Photography Credits 339Index 340

About the Authors 352

contents

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6 making the world work better 7Foreword

ne simple way to assess the impact of any organization is to answer the question: how isthe world different because it existed?

The date of this volumes publication, June 16, 2011,is a meaningful one for IBM. On it, we celebrate ourcentennial as a corporation. For IBMers today womenand men who have lived through an eventful part of thathistory that means reconnecting to a storied past, andunderstanding its implications for a still-unfolding story.

But we believe the lessons of our history apply morebroadly. Whether you seek to understand the trajectory of technology or to build and sustain a successful enter-prise or to make the world work better, there is much tolearn from IBMs experience. And because these lessonshave signi cance that goes far beyond our company and because we wish to understand them better our-selveswe decided to do something different from atypical commemorative publication.

Rather than simply chronicle the companys longlist of achievements, we reached out to three journalists

who have covered our industry for years. In fact, all of them have interviewed me at one time or another. They have a wealth of knowledge about technology, businessand history, and each one offers a distinct perspective on what it all means. Plus, theyre all crack reporters. We

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ir n, pr id n nd i x i o i ri orpor ion



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asked them to take a deep dive into three aspects of how the world has changed and to explore IBMs rolein that change.

I have been fascinated by the results of their research in particular, the underlying beliefs they discovered. Ourcompany, of course, became famous for Thomas WatsonSr.s Basic Beliefs, the principles that were intended toguide IBMers behavior. And in recent years, we havecome together as a workforce to reexamine and rede neour core values. Interestingly, what the research for thisbook uncovered was another set of ideas that were never written down, but that nonetheless have pervaded IBM from its birth up to the present day.

One of those has to do with the nature of computa-tion and information science. Kevin Maneys explora-tion of the history of this technology and the industry it spawned reminds us that it is a lot richer and morenuanced than most people today realize. If your knowl-edge comes from the media, you might think that thestory of IT is divided into two phases hardware and

software. Or that it all falls into pre-Internet and post-Internet eras. Kevins longer lens does much to clarify the far more multidimensional history of computation,IBMs role in shaping it and how its foundational com-ponents are advancing and recombining today.

But he does even more. As Kevin argues, the coreelements of computing mirror key dimensions of thehuman brain. The story of their evolution shows how ourthinking changes the tools we create, and how the tools we create then change the way we think. And this deeperunderstanding makes it clear that scienti c truth isnteither/or, and discovery isnt simply before-and-after. Atthe start of the twenty- rst century, we nd ourselves atan in ection point in both scienti c thought and tech-nological capability a moment whose implications lead-ers and citizens must study if they wish to ride the wavesof our planets information-shaped future.

Similarly, Steve Hamms look at IBMs growth intoa new kind of business institution doesnt just chroniclethe triumphs, mistakes and repeated reinvention of onecompany. Steve offers intriguing new perspectives onsome well-worn truisms. For one: the emergence of aninformation-based economy. We are all familiar with theshift from atoms to bits as the source of economic value.But it has further implications. Because information

knows no borders, it also leads inevitably toward a globaleconomy and toward the increasing convergence of business and society. We learn how becoming globalis about a lot more than geography, a lot more thansimply having a presence all around the world. Finally,



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this narrative underscores how an enduring organiza-

tional culture isnt just a fact of nature but a deliberateact of its people one that involves a lot more than dresscodes and team-building exercises.

Neither Thomas Watson nor his son had availableto him the sophisticated language we use today todescribe this complex systemmuch less the scienti cand business disciplines that have arisen over the pasthalf century to study it. What they did have was theintention to build a particular kind of enterprise a setof gut impulses, if you will, about what a business shouldbe. As a result of those impulses, IBMs experiencethrough the twentieth century did much to shape themodern corporation. And as Steves essay persuasively argues, what IBM is still becoming offers interesting per-spectives on the new ways any organizationin business,government, education or beyond can answer basicquestions like: How does it create value? How does itattract, develop and retain people? How does it organizeand manage itself? What role does it play in society at

large? What makes it unique?Finally, Jeff OBriens research reveals compellingexamples of what is required to accomplish the hard work of progress in an increasingly complex and inter-connected world. When you look at the work IBM and

others have done decade after decade work that is

accelerating today a certain pattern of activity andmode of thought emerge. Technology alone, no matterhow powerful, cannot bring about systemic change. Itturns out that deliberately changing the way the world works requires a broader, longer-term approach, with themastery of a few basic steps.

Looking at advances over the past century, Jeff uncovers a simple, intuitive and powerful model of progress. Today, that model is being renewed by ourtechnology-powered capacity to see, map and under-stand vast amounts of new data about every dimensionof both nature and society, opening up ways to make our world literally work better. And yet, these stories arguethat acting actually changing the complex systems of our planet in lasting waysrelies most fundamentally noton data but on belief. Our learning depends on a priorfaith in our capacity to learn as Thomas Watson Sr.often said, to think.

The lead actor through these narratives is a collective

enterprise based on the power of ideas

their economicpower, their galvanizing and structuring power, theirtransformational power. These are the ideas that driveprogress and by progress, I mean building a worldthat is not only more prosperous, more sustainable and



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fairer, but also better able to continually transform

itself; a world that learns. When IBMers are at their best,the pursuit of this form of progress infuses everythingthey do.

Now, one way to explore and chronicle that idea isthrough science. We can also look at it within the framework of management theory. But the discipline thatactually seems most appropriate is history hence this volume and these writers.

On a personal note, let me say that this approach isencouraging for an old liberal arts major like me. Morethan once during my 38-year career here, I have jokingly apologized for my lack of scienti c background. In truth,it can be intimidating to be surrounded by brilliant engi-neers, scientists, MBA s and other such thinkers. And without question, the amazing stories in these chaptersdo nothing to counter that feeling. On the contrary, they instill a deep sense of humility. I cant help being sur-prised to nd myself in this position at this institution atthis moment. Ive been very lucky, indeed.

Still, it is gratifying to see what the lens of history reveals about our company, the world in which it hasgrown and the trajectories it has in uenced. Withoutdoubt, the perspective of history allows us to see IBM ina way that IBMers could not have done in earlier eras

which seems appropriate on the occasion of our 100th

birthday.How is the world different because IBMexisted? The

stories in this volume provide a fascinating set of answers,and an even more intriguing set of yet-to-be-answeredquestions.

My fellow IBMers and I are proud to have been partof this journey during our own time here. We are inspiredby the legacy of the pioneers who built this company. Weare committed to serve as stewards of the collectiveenterprise they left in our care. And we are excited aboutthe fundamental transformations that lie ahead, as thetrajectories of the past converge and point us toward a very different future.

For IBMs clients, and for the communities of which we are a part, this convergence promises a smarter planet.For IBMers, it points toward a future that will be builtby a new generation the IBMers of tomorrow. It isthese women and men for whom this book is intended,and to whom it is dedicated.



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pioneeringthe science of Infor tionkevin mne


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16 making the world work better 17Pioneering the Science of Information

n March 28, 1955, the cover of Time featureda drawing of IBMpresident Thomas Watson Jr. in front of a cartoonish robot, along with this

caption: Clink. Clank. Think. At the time, few buta small cadre of experts had ever seen much lesstouched a computer. The magazine story marveledat the machinery, built by IBM and operating insidea Monsanto of ce building.

To IBM, it was the Model Electronic Data Processing Machine,the story said. To Monsanto and awed visitors, it was simply the giant brain.

We cant help considering computers this way. No matter the year , or we continue to equate the functions of the hard, rigid,

electric-powered computer with the squishy, pliable, biologically poweredhuman brain. Computers have always been tools but function no more likea brain than a hammer works like a hand. Yet we mix the metaphors, withthe idea that as computers advance, we can hand them more of the work of the mind, making them partners in our efforts to improve the world andmanage its increasing complexity.IBM had thought of computing that way for much of its existence. As Time put it in that article:

IBM s new brain is a logical extension of the companys famed slogan, THINK . In the age of giant electronic brains, IBM s President Thomas J. Watson Jr. is applying to machines the slogan which his father, IBM s Board Chairman Thomas J. Watson Sr., applied only to men. President Watson hopes to mechanize hundreds of processes which require the drab,repetitive thought of everyday business. Thus liberated from grinding routine, man can put his own brain to work on problems requiring a function beyond the capabilities of the machine: creative thought.

Of course, the worlds information scientists and technologists havent

spent the past years trying to build a computer that can mimic the workings of the human brain. The goal has always been to augment theuniquely human capacity to think. Even though a computer beat the worldchess champion and won against the two all-time champions on the TV quizshow Jeopardy! , a computer cant reason any more than a pitching machinecan be a star baseball player. Still, the evolution of computing has done morethan solve really hard math problems.

information technology literally changes the way we think. It movesahead, showing us whats possible and freeing our minds to dream of what we can do next. The dreams inspire us to build better technology, which inturn unleashes new ideas about what technology can do.

But theres a part of the information revolution that Watson Jr. missed. All of the pieces of computing sensors, storage, processors, software, net- workshave conspired to abstract information and thought processes fromindividual brains. What people know even the decisions they know howto makeis captured and shared. Its combined with data about nature andhuman activity information weve recently begun to capture in unprec-edented volume and with unprecedented speed through sensors andelectronic transactions. Technology is pumping the worlds knowledgeinto a global pool, creating a higher plane or, at least, a broader eld of consciousness. The quest to make machines think has delivered not a parody of individual human thought but a new kind of thinking. Many intercon-nected individuals can have access to the same wealth of information at nearly

the same time and work on it together with the help of machines. Werecreating a humming hive of knowledge, people and computers, all feedingone another.

Ultimately, the goal of this symbiotic relationship is to make the world work better. We are constantly creating systems that raise the level of exis-tence on our planet.



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The story of how we got here begins in with crude punchedcard machines and charges into the future with technology that can deliversupercomputer-like simulations to handheld devices through a cloudcomputer network and embed computing and networking into the very fabric of business and life. The details of that journey can be understoodby examining the breakthroughs in six pillars of how information technology has evolved.

Together, those pillars mesh and make up the modern computingenvironment. The stories behind the development of the pillars haveheroes from all over the world. They worked at Bell Labs, Machines Bull,Cray Research, Intel, Xerox PARC , Sony, Apple and other companiesand entities. IBM has played a signi cant role throughout the story of computing, through every decade of the past years.

In , nancier Charles Flint merged three small technology companies: one making computing scales (which automatically gured outthe total price of an item sold by weight); one making tabulating machines;and one making time-recording clocks that workers punched at factories. At rst it was called the Computing-Tabulating-Recording-Company, orC-T-R , joined in by Thomas Watson Sr. In , he changed the nameto International Business Machines. The company has thrived for yearsby building on those rst simple information products and in every way continually making them better, faster, more ef cient smarter.

From his start in , Watson introduced the iconic slogan Think. And since then, his company has played a lead role in reinventing thought.

sen ing The mechanisms for getting information from people andevents into computers.

me or

The way computers store and access information.

proce ing The core speed and capabilities of computers.

logic The software and languages that let computers do work.

Connecting The ways computers talk to people and machines.

architect re The changing nature of computing and of the way we think about information.



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52 making the world work better

proce ing At its core, computation is aboutprocessing ones and zeros.

Computing power is the art of doingso faster and faster.

hese vacuum tubes, f m a 1953 system,c ul mult ly tw 10- gt umbe s

2,000 t mes e sec .


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The System/ 360 was an end-to-end compatible system thatcould adapt to different uses and changing needs, bringingcomputing into the core infrastructure of business and society.

he 360 fam ly clu e s cess m els c ve g a 50-f l a ge e f ma ce a 54 ffe e t e he al ev ces, clu g seve al

ty es f mag et c st age ev ces, v sual s lay u ts, c mmu catequ me t, ca ea e s a u ches, te s, a a t cal cha acteea e . thly e tals at the t me a ge f m $2,700 f a bas c

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einventingthe mo ernCor or tionsteve



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136 making the world work better 137Reinventing the Modern Corporation

hen Thomas Watson Sr. joined the Com-

puting-Tabulating-Recording-Company asgeneral manager in 1914, he stood at theepicenter of American capitalism at the dawn of anew era. The fledgling company, which he laterrenamed International Business Machines, had beenformed three years earlier through the merger of three small manufacturing rms that sold mechanicalaccounting machines, scales and time recorders.Headquarters was a suite of of ces in a newly built20-story building at 50 Broad Street in New York City,50 yards from the New York Stock Exchange and ashort distance from the Lower East Side, the originalhome of New Yorks bustling garment industry.

To enter the building, Watson sometimes had to shoulder his way through an unruly crowd of traders who bought and sold securities at theso-called curb market on the cobblestones of Broad Street. Up on the 18thoor at C-T-R , the 40-year-old executive sat each day at a simple woodendesk dressed in a three-piece suit with a stiff Edwardian collar, poring overledgers and correspondence. He could glance through the windows at thehubbub in the street far below where the traders derby hats and dark suitsmade them look like ants swarming at a picnic. His perch turned out to bea perfect spot from which to help invent the modern corporation.

New York was bursting with humanity in those days. Immigrants fromRussia, Italy, Ireland, Germany and elsewhere poured off ships and intothe citys narrow streets and warrens of rattletrap tenements. The human

torrent had nearly doubled the population over the previous two decades,to . million.60 New York was both the nations nancial capital, home of themoneymen and traders who funded the industries of a burgeoning economy,and a manufacturing dynamo, jammed with clothing factories, printingplants, machine shops and gritty metal foundries. For more than a century,captains of industry had built empires by extracting value from naturalresources or by building mammoth steel mills and continent-spanningrailroads and harnessing the strong backs and nimble ngers of laborers.In 1920 , the US census revealed that 30 percent of the working population was employed in manufacturing and 26 percent worked in farming, forestry and shing. The other major categories were trade ( 10.2 percent), domesticand personal service (8.2 percent), clerical (7.5 percent) and transportation(7.4 percent).61 Indeed, the leaders of heavy industry and commerce made upC-T-R s client base.62

Yet Watson fashioned C-T-R into a very different sort of company from those that surrounded him. He realized that his companys countingand calculating devices could help those railroads, steel companies, manu-facturers and merchants manage their data. He saw that in the new century,a companys most valuable assets would be the information it amassed, theknowledge it created and the ideas of its employees intellectual capitalrather than money, muscle or raw material. Tom Watson should be credited with the idea that information was going to be the big thing in the twentiethcentury, said Harvard Business School professor Richard Tedlow, author of The Watson Dynasty.63

When Watson took over C-T-R , the idea of the modern corporation was just beginning to form, and he played a signi cant role in laying its

foundation. An outgrowth of the large industrial and nancial organiza-tions that had dominated commerce in Western societies, the moderncorporation was also, in the United States, a reaction against the excessesof the Gilded Age, when market manipulators and anticompetitive trustsdistorted the economy. In the new century, the form and function of the

W

Previous pages:a t eet new Y k ty, 1903 (left),

a h mas Wats ., 1913.




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corporation were to undergo rapid change as the worlds great commercialorganizations mastered the science of applying new ways to extract andmanage information to harness capital, natural resources and people and putthem to work in increasingly effective, ef cient and ambitious ways.

In 1914, this transformation was hardly clear including in Watsonsown mind. His belief in information and thinking was both ferventand unformed. It was clear to him that information would be the basis of economic value. It was also clear to him that commerce was destined tobecome global. He was convinced that businesses would have responsibilitiesnot just to their shareholders but also to society at large. And he doggedly aimed to build an organization that self-consciously embodied his mantra,Think. Over the next 40 years, he would start a process of discovery withmany missteps but with more successes translating these gut impulses intopolicies and practices, scienti c discoveries and the then-radical notion of

an intentionally created corporate culture. Today, we are again at a turning point in the history of the corporation.

Faced with a potent mix of economic, environmental and political challenges,corporate leaders are reexamining basic assumptions. Just as diversepopulations once poured into the commercial and societal melting pot of New York City, so, today, those who previously sat on the sidelines arebecoming players in the global economy as both consumers and producers.Business powerhouses are emerging from China, India, Korea, South Africaand elsewhere. Theyre inventing business models that give them the powerto reshape established industries and leapfrog the twentieth centurys giants. The Internet is disrupting traditional ways of doing business in one marketafter another, from media and music to manufacturing and retailing. It

levels the playing eld globally for businesses and individuals. Jobs that wereonce anchored in one place by tradition and convenience now can be doneanywhere in the world. And the barriers to entry once insuperable toall who could not amass large amounts of capital are dramatically lower.

Individual citizens can become global capitalists. To combine two of themost widely used metaphors of our era, the global economy is becoming along, at tail.

How should businesses respond? As before, leaders are asking them-selves fundamental questions about what their company should be and howit should operate the kinds of questions that have shaped business thinkingfrom ancient Greece to modern Silicon Valley. But today the answersare changingand with neck-snapping speed. So its time to reinvent thecorporation once more. This essay lays out a point of view on the past andpresent of the modern corporation and on what progress will look like inthe twenty- rst century. It is organized around four basic questions thatleaders must ask and answer:

how does a company define and manage itself ? Over the

past 100 years, corporate management has shifted away from thenineteenth-century mode of centering a company around a singlepowerful leader, adopting a more networked, horizontal approach. Though, of course, there are exceptions, today more and moreorganizations are guided by deliberately created corporate cultures,often grounded in shared values, that survive even when a leaderdeparts. IBM was a pioneer in this shift not simply in inculcatingethics, but also in seeking differentiation, organizational identity andthe de nition of the companys raison dtre. In the future, the chal-lenge will be to create ultra- exible organiza tions made up of empow-ered professionals who can anticipate and prepare for change ratherthan merely sense and respond to it.

how does the organization create value ? Through the lens of one companys evolution but drawing broadly on modern businesshistory we can trace the shift from Industrial Age modes of value

py g py g



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creation to the twentieth centurys monetization of knowledge andintellectual capital. This takes multiple forms and not just in productdevelopment but in every aspect of a companys operations. Thisprogression suggests that organizations will increasingly create valueby collaborating openly and deeply with other companies, and govern-ments and even individuals, participating fully in a network economy. how does the organization operate in a global economy ? Inthe nineteenth century, being international meant having a presenceall around the world. During the twentieth century, it came to meansomething quite different: seeing the world holistically, both as amarket and as a supply of resources and talent. As a result, the moderncorporation has changed in form, from the international model of thenineteenth century to the multinational model of the twentieth to the

globally integrated model of the twenty- rst. Those companies thathave succeeded, including IBM, have created new skills, processes andgovernance systems in order to manage the tensions inherent in beingat once global and local.

how does the organization engage with society ? Once,businesses answered only to their shareholders. Philanthropy wasa personal matter for wealthy industrialists. Over the course of thetwentieth century, the most enlightened corporations realized that howthey de ned themselves would hinge in part on developing responsiblerelationships with society to the point that engaging with society hasbecome woven into doing business, essential to nearly every decisionan organization makes.

IBMs evolution over the past 100 yearsincluding its near-deathexperience in the early 1990shas made it a vastly different company fromthe one that Thomas Watson joined in 1914 . Indeed, the company haschanged enormously over the past decade. Throughout this journey, itsleaders have asked those same fundamental questions, reaf rming some of the things the company once believed and coming up with some newanswers. IBMers today know all too well what can happen if an organizationloses sight of business fundamentals and fails to respond aggressively tosatisfy its customers deepest needs. And they understand that in todaysbusiness climate, whats required to last is nothing less than continuoustransformation.

IBM is still reinventing itself and it knows that the process willnever be nished. Asked to name the most important lesson that IBMshistory teaches us about leadership, chief executive Sam Palmisano didnt

hesitate: You have to be willing to change your core, and you have to beahead of the shift. 64



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When Soichiro Honda started the Honda Motor Company in 1948 to design andbuild motorcycles in war-ravaged Japan,his ambitions were audacious. A black-smiths son who usually wore the blueoveralls of a mechanic, Honda stood onan orange crate in the companys factory four years later and declared his inten-tion to make Honda not just the numberone motorcycle company in Japan butnumber one in the world.

He didnt achieve his goal overnight, but right fromthe start he set out to build a corporate culture that wouldenable a tiny company to grow to greatness. 65 He did it by establishing a respectful rapport with the companysemployees and by giving them clear direction about thecompanys values and ambitions. For instance, in 1956 hepublished a company principle in Hondas newsletter,distilling the companys purpose down to its essence:Maintaining a global viewpoint, we are dedicated to sup-plying products of the highest quality, yet at a reasonableprice, for worldwide customer satisfaction.

The IntentionCre tion of C t re

In classrooms and data centers, assembly lines andsales training facilities, Thomas Watsons mantra,

Think, gave visible form to the novel idea thata company could deliberately create its culture.

ystems e v ce g ee g lass f w me ,c tt, new Y k, 1935.



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le lle (left) a Ge g e z we e awa e an bel p ze 1987 f the sc ve y f h gh-tem e atu esu e c uct v ty a ew class f mate als.

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tu el g m c sc e.

instinct was to institutionalize and expand what had been a comparatively informal organization, dominated by the outsized personality of his father.

And here, IBM had a model: AT&T s Bell Laboratories. Established in1925 , the labs provided fundamental scienti c research for the telephonecompanys business units.

In 1956, Watson hired Emanuel Piore, the former chief scienti st at theUS Of ce of Naval Research, as research director, and Piore assigned threesenior IBM scientists, whom he called the Three Wise Men, to study thealternatives. After touring IBMs product development facilities and speak-ing to leaders in the research community, they recommended setting up anindependent research organization that would focus on long-range projectsrather than incremental advances that would be immediately usefulfor product development. Piore and Watson agreed and set the wheelsin motion. Some of these projects led to blind alleys, but others led to

discoveries that put IBM in the lead, said Gardiner Tucker, one of the Three Wise Men and who later headed up IBM Research.120

One such notable discovery came in 1981 at IBMs laboratory in Zurich,Switzerland. Working together, physicists Gerd Binnig and HeinrichRohrer invented the scanning tunneling microscope, which for the rst

time allowed scientists to see individual atoms. The STM became anessential tool in the emerging science of nanotechnology. Rohrer had

hired Binnig right out of graduate school and asked him to study materialsat a near-atomic level, but Binnig found that no existing microscopes wereup to the job. So they decided to invent one. Binnig broke the lab rulesand worked at night, when nobody else was around, to avoid sounds and vibrations that might disrupt his experiments. After months of trial anderror, they invented a powerful tool that had an even higher resolution thanthey had expected. What made this discovery possible, according to Binnig, was a culture that gave scientists the freedom to pursue lines of inquiry wherever they led. IBM was a place where you could go very deepand invent something completely new, said Binnig, who now works atDe niens, an imaging equipment company. For their work on the scanningtunneling microscope, the two scientists received the Nobel Prize in

Physics in1986

.121

The results of this freedom were palpable. IBMscientists and engineershelped invent the Information Age, producing breakthroughs in informa-tion storage, semiconductor technology, database software, programminglanguages and computer systems. Along the way, researchers won nearly

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m ingthe WorWor Better Jeffre m. Brien



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246 making the world work better 247 Making the World Work Better

ore than a decade after his fateful operation,

Mike May still tends to close his eyes forlong stretches of conversations. Its a habitthat developed in the weeks and months after heunderwent an experimental stem cell procedure torestore his vision. After 43 years without sight, May

was suddenly confronted by a torrent of imagery thatooded his navigational system and toppled hisunderstanding of the world. As a blind man, May had been an independent, productive, self-assuredmember of society. Then he was crippled by vision. 224

Blinded by a freak chemical accident at age , May spent decadesmaking sense of the world using incomplete information. He becamean accomplished technologist and inventor of a GPS navigation device forthe blind, an avid traveler, a husband and father of two boys and a world-class skier capable of barreling down mountainsides at miles an hour.Regaining sight in one eye (the other was damaged beyond repair) changedeverythingand not always in a good way. Many everyday scenarios becametoo disturbing to bear. Peoples moving lips, contorted facial expressions, wild gesticulationthey all rendered conversation dif cult. Skiing becamefar more dangerous when complicated by mountaintop vistas, bluebirdskies, towering shadows and the appearance of other skiers. So May beganclosing his eyes to help him concentrate. I am sure there will come a time when all this visual communication will mean more to me, May wrote in theGuardian not long after the operation, but for now it is just distracting. 225

As amazing as the procedure was from a medical standpoint, it was justthe beginning of the incredible story, chronicled in the best-selling book Crashing Through, of a man traveling from self-suf ciency to functionalparalysis and back.226 We dont usually think of seeing as a learned processbecause it occurs so early in life. But as Mays tribulations demonstrate,seeing is a journey in itself. Overload wasnt the only complication. New visual data challenged Mays long-held perceptions. Crashing waves wereparticularly confounding. His ears told him that shorelines were thunderousand intimidating; his vision told him they were soft and peaceful.

May also had to rethink the way the world operates. He always imag-ined his surroundings in a vectored grid; vision revealed a far messier reality.Interstate highways dont travel north-south and east-west; they curve andundulate with the terrain. He had drawn diagrams of entire airports in hismind to negotiate mazes of boarding gates, escalators, baggage turnstiles

and taxi lines. But those maps turned out to be woefully incomplete. They advised him how to get from A to B but ignored much of the complexity theshops, restrooms, alternative pathways and organized mayhem in between.

May is a man with a vigorous spirit and an impressive desire to do morein life than merely get by. But hes also a metaphor. Were all coping witha barrage of vision. Data is overwhelming our navigational systems andchallenging our notions of how the world works. Billions of sensors, cameras,microphones, telescopes, microscopes and mobile phones are constantly capturing streams of information about everything happening around us the smallest movements, the slightest changes in chemical composition, thesubtlest activities at the farthest reaches of space, inside atoms and nearly everywhere in between. May is in a perpetual struggle to reinterpret the world in full awareness. And so are we.

If we can nd the meaning in all of the data, the effects will be transfor-mative. Again, May stands as evidence. Like many proud fathers, he holds

fte 43 yea s f bl ess, ke ayu e we t a stem cell

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his wife and two sons above his many other accomplishments. He neverimagined that anything could make him love his family more. And thensomething suddenly did it was the moment he saw, for the rst time in hislife, the color of hi s sons eyes and the beauty of his wifes smile.

what does ibm do ? Its a question that many of the companys more than, employees undoubtedly have encountered. 227 Brand recognition

remains strong around the globe, but since selling the personal computerdivision, the business has become more dif cult to explain to casualobservers. Financial analysts and the media use categorical shorthand likesoftware and services, information technology or consulting. And while all of those are at least partly true, they hardly paint a full picture of the companys enduring mission over a century. Chairman and CEO Sam

Palmisano has an idea why the question can be so dif cult to answer. Wevenever de ned ourselves by a h it product. From the beginning, the Watsonsfelt that IBM always had a bigger purpose, he told me at corporate head-quarters in Armonk, New York. 228 IBM has always been about a culture of innovation and doing things that are profound. We have always tried tomake the world work better. And that certainly remains true today.

IBMers make the world work better. Its catchier than software andservicesbut only marginally more enlightening. Perhaps i t would help tocite some examples. Over the course of a century, IBM has established itself as an innovation partner for enterprises and institutions around the globe. The company has enabled space travel, and designed social welfare programs,smart electricity grids, travel reservation systems and more ef cient supply chains. All of those projectsand hundreds of others seem to qualify asmaking the world work better. But what separates them from, say, buildinga sexier smartphone, which in many peoples eyes certainly contributes toa better world?

Its partly a matter of scale. IBMs greatest achievements involvedesigning and improving the sprawling architectures of our planet. Theresa scienti c catchall term for these architectures: complex systems. Complexsystems are hugely complicated, but thats not what earns them their name.Here, the word complexis a synonym for unpredictableor at least noteasily predictable. Complex systems comprise thousands or even millions of cooperating parts whose interactions are not linear, but emergent. Workingtogether, they produce surprising outcomes.

You know a complex system when you see one. In fact, theyre everywhere. We interact with dozens every day. They exist both in nature and by design and make up the fabric of our lives. A cardiovascular system is thecollaboration of a heart and lungs, veins, capillaries, blood and chemicals all complex systems in themselvesthat in turn cooperates with a digestivesystem, nervous system and so forth to produce a surprising outcome:

animal life. Wheat is a combination of roots, stem, leaves, chaff and grainkernel, along with many molecular-level components, all of which interact with sunshine, soil and water to produce the largest source of vegetableprotein in the world. An e-commerce website is the front end of a complexretail system that conspires with a supply chain, an energy grid and a nancialsystem to deliver goods and services to customers at the click of a button. The engine, brakes and design of a car; the roads, bike lanes, pedestrians andtraf c lights; trains, buses and airplanes theyre all components of a highly complex transportation system that takes us where we want to go.

Wed all like these systems to work better, more ef ciently, moresustainably. But how do we get our arms and minds around something as vast as, say, education, much less gure out how to change it? A good startis determining whats wrong. Unfortunately, that alone involves analyzingmyriad variables to assess the effect of everything from funding and teacherquality to age of textbooks, emphasis on standardized testing, length of a school day and year, and even nutrition and sleep cycles. Healthcare is

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worse. Improving overall health would go a long way toward reducing theinef ciency and bloat of our healthcare system (and vice versa). Even tack-ling one scourge, like childhood obesity, would free up resources to improveother aspects of the system. But where does obesity come from? A morassof factors, including nutrition, economic conditions, agricultural subsidies,self-esteem, pervasive advertising, the quality of public transit, school lunchpolicies and access to supermarkets, insurance and playgrounds.

Humans can be pretty impressive. Every day we combine observa-tion and experience to navigate a complex world. But generally were farmore aware of symptoms than root causes. Even if we had the time to makesense of something as complex as global warming, wed be ill-equipped onthe strength of our own brain power to consider the relationships amongseasonal weather patterns, energy ef ciency, aerodynamics, ice cap degra-dation, pesticide usage, stock market performance and algal blooms. We

cant untangle complex systems in our minds, and we cant intuit our way to a better-working world. Computers arent much better on their own. Itspointless just to plug in a supercomputer in a back room and expect it tomake a complex system work better. Computers are processors. They mustbe augmented with perception, reasoning, cognition and intuition. Andthat, simply put, is IBMs business. Its been true for a century and remainstrue today.

Making the world work better is about untangling and managing com-plexity. Doing so whether to transform industries, markets, societies ornature requires serious science. But curiosity and experimentation arentenough. Solving systemic problems also requires a particular combinationof vaulting ambition and profound humility the level of ambition to tackleseemingly unsolvable problems and enough humility to recognize that nosingle entity can make the world work better and no single entity can con-trol a complex system. What were really talking about here is progress, which by de nition is communal.

Over the course of more than a year, a small team of researchers andI interviewed dozens of IBM scientists, engineers, executives and partners. We immersed ourselves in the archives in Somers, New York, and studiedthe arc of the companys business. We were indifferent about how, whenor whether IBM made money. Instead, we focused on when and how it hasmade the world work better. Considering both the companys centennialand the degree of system failure all around us, now seems like a good timeto shed light on our ndings.

Change is easy. It happens by itself. The universe, operating by the lawsof natural selection, is inherently innovative. Progress, on the other hand the form of innovation practiced consciously by human beings is deliberateand dif cult. But its not random. Climate, transportation, healthcare andretail may seem to have nothing in common beyond inherent unpredict-ability. But as it turns out, there is a common path to follow when attempting

to manipulate any complex system. Our exploration revealed some key stepson that path. We learned how our predecessors struggled to complete eachstep in their paths to progress, and we saw how new tools are augmentingour abilities to complete the journey more quickly, safely and inclusively.

Even to start on this path requires inspiration, which can come frommany placesfrom a calamitous event or from a moment of clarity in theshower after years of noodling the same problem. It can be spurred by a work order, a dream or the proverbial pebble in the shoe. But whatever initi-ates the desire to improve a system, the rst step is always the same: seeing.

Seeing is not just about photons hitting a retina. Its about employingall available methods to collect data about a situation. Any complex systemchurns out massive amounts of information about whats working, whatsbroken, about cause and effect. Every element of behavior, every phenom-enon is a data point ready to be captured: the march of time, the steps from your desk to the coffee shop, the rotations of a sharp curveball, the radiantenergy of a solar are, the milliliters of oil on the garage oor, the contagion

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rate of the latest strain of seasonal u. This data has always existed; whatschanging is our ability to capture it.

But without context, data is just noise. To be useful, it must be organized. Thats precisely what maps do. A map tells us where we are. It lters irrel-evant information, reveals behavioral patterns and presents an argument for what to explore. A map of the galaxy shows Earths proximity to the otherplanets and the sun. Calendars segment Earths orbit into equal parts. The Dewey decimal system categorizes the contents of all knowledge in alibrary. Weve been organizing data in maps for many thousands of years.Now real-time data and visualization tools allow us to create dynamic mapsfrom many points of view, inspiring us not just to explore but also to think.

A map shows when, where and even how often something happens.Understanding is the quest to answer why. Why is Earth the only planet we know of in our solar system capable of supporting life? Why does it take

days to orbit the sun

and why is there an orbit in the rst place? In theprocess of understanding, we follow causal chains to determine what leversaffect which outcomes. For much of history, this daunting process, whichcan span many lifetimes and transcend scienti c disciplines, has been limitedto the work of trial and error. But lately the process has been hastened by more advanced tools designed to help interpret maps, explain mysteriousbehaviors and virtually test hypotheses. Understanding is where entire eldsof science reside, where Nobel Prizes are won and where urgency is born.

We may understand why something happens, but that doesnt tell us what to do about it. There are always many possible paths forward, andhistorys pioneers are the ones who make the best choices among them. Amid uncertainty, they nd belief. Believing is about trusting the analy-sis and marshaling the will to overcome the status quo. Historys greatestbelievers typically have been charismatic visionaries able to transmit theirconviction and mobilize collaborators by force of personality or forceof arms. In more recent times, belief has begun to spread in other ways,

particularly through the rigor of the scienti c method. Lately, believers of all stripes have become enabled and emboldened by multivariate models,simulations and other visualization tools that allow us all to more effectively predict outcomes.

Last, progress requires putting wisdom and will to work. Even withconsensus and a clear view of the future, acting on a complex system ishard. Taking action is not an isolated or solitary event. Sustainable progressrequires organization, cooperation, precision and reaction because oursystems are alive and respond to our every intrusion. Whats more, betteris a moving target. As the world has become smaller, our complex systemshave become more intertwined. This interdependence has increased thelikelihood that breakage in one system will cause damage in others. Its alsomade it more dif cult to x anything in isolation. But were not helpless.Increasingly sophisticated tools of networking, collaboration and automa-

tion are giving us greater insight into systemic behavior and allowing usto collectively intervene in a timelier, more directed fashion to make oursystems faster, more ef cient and more sustainable.

These steps, then, constitute a model for how to instigate progress: seeing, mapping, understanding, believing and acting . IBM has never articulatedthis model to explain its business, but as youll see, the company like many other enterprises, institutions and individuals over the past century hasfollowed this path in the course of making the world work better. Nearly every one of the dozens of scientists and executives to whom we describeditfor short, we wound up calling the model smuba(after all, IBMers have apenchant for acronyms) accepted it as a useful articulation of how systemicprogress occurs. Some quibbled with the order, others with the boundaries.Some warned against applying the framework too rigidly. But such is thenature of debating an idea among an inordinately intelligent and accom-plished set of actors. Ill attempt to address some of these objections andcaveats in the course of this essay.

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How Do We Master Complex Systems ?

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