IBM mainframe and salaried workforce restructuring

The TQM challenge week at the IBM executive training facility on the Hudson, ~1990. IBM's reduction of salaried staff by ~45,000 without touching hourly workers, and the executive's admission that fewer problems rose to the surface afterward. Tom's foundational story for why TQM matters.

The TQM challenge was where these six companies, half a dozen Fortune 500 companies, challenged half a dozen elite universities to send 50 of their faculty back for a week to learn about TQM. It turns out at MIT there were 75 faculty that signed up. You can't ever get 75 faculty to agree on anything today. But 75 of us went to the IBM executive training facility on the Hudson. You might have stayed at a Four Seasons Hotel, but you haven't stayed at a nice facility until you stay at the IBM executive training facility. I didn't know what to expect. I drove in, got in late one Sunday night, hadn't eaten dinner, and I thought they're gonna send me out to some McDonald's or something. They said, oh no, the cafeteria is still open. It's like 10 o'clock at night, and you should have seen this buffet. It was fantastic. I'm sitting there thinking, well, they must have had some convention here today. No, it was for us. And everyone had their own motel room.

IBM, once a tremendous leader in science, and particularly a company that was focused on using superconductivity to revolutionize the world of computation — the superconducting computer — IBM is just a shadow of its former self and not so much materials focused anymore. So as time has evolved, the question becomes where does the funding come from, who supports new science. And since about 2000 it's been largely venture capital money. People who have a lot of money, don't know what to do with it, and invest. Now, do they invest wisely or not so wisely? One of the VC firms I've worked with in the past pursued what they call the spray-and-pray approach to venture capital. Spread it all out there, throw it over here, throw it over there, and pray for the best result. Serendipitously sometimes that works; most often it doesn't work.