Design, IBM, and Margins

Scott Francis
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Great article on RedMonk regarding the importance of design to IBM.  The questions is whether an IBM can convert some of its R&D spend to Design spend, and achieve better financial results.  And whether “packaging” a vertically integrated software stack is akin to good design:

Apple, famously, invests less in R&D than its competitors (as a percentage of revenues). In 2012 Apple spend $3.4bn on R&D, 2.18% of its $156bn revenue for the year.

It seems to me however that a more important metric would be how much Apple spends on design vs its key competitors. Certainly from an IBM perspective it potentially makes sense to increase investments in design and value-added packaging, whilst reducing overall R&D spend. Unlike Apple, IBM invests more in R&D versus its peers. So from a CEO perspective you’d want to increase value, without increasing investment – design is potentially a means to do just that: refactor the corporation.


There’s more than a passing connection to the BPM sphere:  Phil Gilbert, previously VP of BPM, is now the General Manager of Design –

I discovered something very interesting at Analyst Insights. IBM now has a General Manager of Design, a role across all 400k employees and all business divisions. I would be sceptical but the person in question in Phil Gilbert. I have written a couple of posts (here and here) already about Gilbert’s impact on IBM BPM apps, but now his role spans the entire company. Its worth spending some time on Gilbert and his role to help you get a better understanding of why this general manager role isn’t just “special projects” or “gardening leave”. While Gilbert didn’t say so, he could have easily have left IBM to another opportunity. But he’s clearly all fired up about the new design role.

Robert Le Blanc, IBM SVP Middleware who appointed Gilbert, is a tough operator. I understand Ginni Rometty IBM’s CEO is also committed to Design. So that’s the top down covered. The bigger challenge for Gilbert will be bottom up. How can he instil design culture at any significant level in a company so big, and where he is going to find enough talent to help drive the change? In turns out Austin, Texas. Well some will be found there, anyway. IBM is going to open a new Design campus in the Austin, and is looking to attract top talent from around the world to the team. IBM is now competing for agency talent, and I love the fact.

I think Monkchips has it just right – the key question is instilling design culture bottom-up.  Austin is a good place to start, with resources like the Austin Center for Design (AC4D) and the University of Texas.

I liked the closing argument:

Before signing off its important to stress what I mean by design, or at least what I don’t. Design is not a means to daub lipstick on a pig. Far from it. When Gilbert was tasked with making 40+ products in the IBM business portfolio management portfolio easier to use it would have been easy to re-skin all the apps, and say hey look they’re pretty now. Instead Gilbert drove a root and branch reform, consolidating all these products into just three, with properly modelled user interaction. And yes they do happen to be prettier. But the beauty is in the simplification, not the font choices.

I have to agree. While the work could be considered “unfinished” – as in, the refinement and refactoring of these products is ongoing – the direction set was clear: to consolidate user experience and metaphors to make everything easier to use.