So IBM gets rid of as many of the people who earn the most money - which means people with the most knowledge and experience are gone. Then they supplement them through offshoring and outsourcing. With people who usually have zero experience and need years to catch up - and even then they're nowhere near those who were RA'd. And then people wonder why the quality of our products keeps dropping? We're lucky we have anything half-decent to offer, considering.
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remember its not who you know,its who you &low
There is an escape clause It’s to sell something that still has value (GTS, HW, patent portfolio)
"Unless we say f— it, decommit profit targets and dividend yield"
Rometty didn't do it ( couldn't? wouldn't? I hope it's not because she didn't even see it.) Will AK have the guts to do it? Or he will try to manage the company to gracefully slip from irrelevant to oblivion?
1qud+18YMDhaq
I really dont want to debate all this, but I will once seeing as you asked.
- Of course i understand growth Vs company valuation..... generally but not always in synergy.
- The point im making is that IBM cannot afford to invest in growth which is currently at 6b a year for RD&E.
- The debt is so high that in order to pay this down, and keep a ~5% dividend we cant increase that 6b
- If IBM did 3, we would have to cut the dividend. Krishna and Kavanaugh have both said this won't happen. And they have committed to 2021 profit targets. Failure on profit or cutting the yield would crater the stock price and make a lot of little old ladies extremely unhappy.
- So.. IBM is stuck. We don't have any wiggle room due to debt, profit commits, and dividend.
So while IBM SAYS we want to grow, and has said so for 8 years, we simply cannot afford it. Unless we say f— it, decommit profit targets and dividend yield
@erb+18YMDhaq Perhaps you don't understand the relationship between the word "growth" and stock price? Eeeesh. An excerpt from Zacks:
"The faster a business grows, the more willing investors are to purchase its stock, and the more they are willing to pay for it. If the supply of stock remains the same while the demand for it increases, the stock price will go up."
No, IBM cheats with stock buybacks. That's how they do it.
"IBM is not focused on "earning money" right now. Maniacal focus is on GROWTH."
I cannot tell you how WRONG you are. IBM is about the stock price. In order to maintain that, they need profit. Any attempt at cutting the dividend would crater the stock. And we would need to do that in order to invest. MSFT invests 3.5X. 3.5X!! what we do. The focus right now is simple, stabilize the ship, AND maintain the profits that have ALREADY been promised. This has been mentioned on several recent quarterly calls,
Then, and only then, will we focus on growth.
IBM is not focused on "earning money" right now. Maniacal focus is on GROWTH. Low-growth portfolios/products/markets are simply not going to make the cut any longer. This is is how it's supposed to work, it's like Introduction to Business 101. Every business reaches a point of diminishing returns for a company, and things depreciate FAST in tech. Every quarter that a low-growth business receives investment is a loss in market value. When the company is already behind the pack in that business, it's high time to exit.
@ewb To give you some perspective, I took a new sales role within IBM last year and I was never asked how I did against my quota the previous half. They just wanted to know if I somewhat understood what they sold and as long as I was an internal hire (easier process), they would go for it. No other sales organization does that. The whole point of sales is to be a very bottom-line driven meritocracy - you either performed or you didn't and the only metric that matters is your performance vs quota.
They're so obsessed with cutting MAYBE $50K in total compensation from an older seller that they lose out on the bigger sales opportunities. If this is such an issue, why not just lower base and make pay more variable based? Or make base pay similar across all sellers and make it very incentive driven?
The sad part is I actually like this company but it's sad to see this company get obsessed with cutting costs without understanding what this will do to the long-term potential. I have to work with 24 year old Summit sellers who clearly need 10 more years of selling experience before getting in front of C-level executives at large companies.
Anyone whose worked at a SalesForce, Google, etc. knows that entry level sellers need to start out as BDRs coldcalling and letting more experienced sellers do the close. At this point, I know that there's no future for me here because the pie is getting smaller every year and there's a knife fight to get a piece of it.
Yes too many Technical people also IMO because the Summits have not the foggiest idea how to sell especially to the Base of our clients whom are predominately Technical staff. So we basically have these "Hordes" of Technical people whom sorry to say make horrible sales people. Engineers just don't have good Business acumen they should just stick to Technical work and not try to make Sales people out them. Nothing against the fine Technical people I worked with. Even some of them told me they don't like being forced to do more "selling" and were not comfortable doing so.
You nailed it, I was well paid veteran in Sales role also brought in the most revenue didn't matter to them. I am sure when they put me on the RA list they just looked at my age & Base pay.
If the Summits stayed and knew how to sell it COULD work but we know they rarely make it. And even if they do survive long enough to learn, usually just filler for ELA content or HW upgrades not much real selling going on.
@pkd - You have no idea. We're already moving to a business partner led sales model (outside of the top 500 accounts). They're better and they're far more experienced. I've worked in other sales organizations and I've never spent so much time on internal meetings like I do at IBM. Which means that we're not selling, we're just giving off the impression of work.
It's the IBM way - get used to it. 2, 3, 4.......... Altogether now (replace "onward" with "downward"):
https://www.youtube.com/watch?v=w0ChoHNEgRI
In the GTS area, there are hordes of "senior" technical people with grandiose titles (most incorporate "lead", "global" or "senior") who orchestrate and delegate to the people with the real knowledge and skill and then spend much of their time claiming the glory and polishing up their Checkpoint profiles. Expensive contractors are then brought in to bridge the skills gaps. Although some of these contractors are good, their short tenure mean that many just don't give two hoots about quality or documenting their work and the downward cycle continues. These senior full time people inevitaby survive each round as the skill base is hollowed-out. Seen it year on year and it's STILL happening.
When sales have high base salary, nothing gets done. All they do is polish presentations for inside sales. Selling their “potential”, I’m going make a deal, next quarter... which becomes next quarter.... which becomes next quarter.
When this behavior is seen, all sales should be shifted to commission only contractors, who have fire in the belly
It seems most people on this board are in sales or services. Product development (HW and SW) has the same problem. IBM is losing or throwing away all the brains that invent things and make them work. No "summit" hire can replace a 25 year experienced programmer overnight if ever and some jobs take years to learn completely.
Yup. I work in sales and I learned pretty quickly that performance has absolutely nothing to do with whether I stay here or get fired. No other sales organization operates like that. Whether your hit 80% of your number or 150%, your risks of getting laid off don't change. We also continuously lay off older, more experienced sellers who understand the product and bring in younger people who just can't get up to speed within 2 years. The myopic focus on the next quarter is causing us to fall behind. If you look at Amazon or MSFT, they retain their best sellers for years on end. I'm already planning my exit.
I spoke with a pretty senior sales executive who came and left IBM within a year. He told me that within one week he knew he made the wrong decision. The only reason people stay is that some of the sales roles are quite cushy and only require 20 hours a week of real work and they get paid $200K+ every year. But those cushy roles are going away. The signs are incredibly clear that our products are becoming irrelevant with our clients. Consider yourself warned.