IBM has been through a remarkable turnaround over the past decade. However, it may merely have recovered the spirit it lost. Consider the visionary leader who propelled IBM from being a respected maker of punch-card tabulators to a powerhouse of modern information technology. What’s remarkable about Thomas Watson, Jr. was his humility.
According to Time Magazine, he grew up “tortured by self-doubt. He suffered bouts of depression and once burst into tears over the thought that his formidable father wanted him to join IBM and eventually run what was already a significant company.” 
Interestingly, IBM’s spectacular growth in the ‘60s and ‘70s can be attributed not merely to its dominance of computing, but its deep understanding of its customers. It knew the clients it served often better than they knew themselves. To them, IBM was a provider not of mainframe computers, but rather, “management information systems.”
IBM’s new direction – under CEO Sam Palmisano (who carries the torch re-lit by Lou Gerstner) – looks a lot like its old one. The company has transformed itself to embrace a “customer-driven” and “services-led” business strategy. Through the 2002 acquisition of PricewaterhouseCoopers Consulting it has consolidated its strengths in management consulting, systems integration and business process outsourcing. Palmisano has distilled the company’s guiding values down to three: customer relationships, innovation and trust.
What is particularly interesting, though, is the way the company has shifted its research spending from the hard science of technology development to the softer science of technology application. The company is getting deeper and deeper into the strategies, business processes and cultures of its clients. Researchers are focusing on “solving business problems and modeling patterns of human behavior, giving their work more of the flavor of social science,” according to a recent article in the New York Times.
Palmisano, an IBM-lifer who is described as having an “understated” style and a “self-deprecating” sense of humor, has turned out to be quite a bold leader. “There is one thing that sets all great companies apart -- they define and lead the agendas for their industries,” he wrote to his employees in an email preparing them for the launch of the company’s innovative, yet risky “on-demand” initiative. "We now see an opportunity to set the agenda again," he added. "I am confident that we are on the verge of the next great opportunity for our company, and for the entire information technology industry."
Watson, who revolutionized the industry in the early 1960s with the daring introduction of the System/360 and built his company through deep customer insight, would certainly be proud of his company’s stunning reincarnation.
