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When the Going Gets Tough ... (continued)


“One of the key jobs of smart people is to anticipate problems,” says Wladawsky-Berger. “If a hurricane is coming and the people in the weather bureau miss it, that's bad. So, if you're good, you are supposed to be scanning the skies for change, and if you're good, you can anticipate the major disruptive changes coming your way.”

IBM had anticipated the technical changes coming down the pike, but the “fastest growing, most profitable, most-everything company in the world,” as Wladawsky-Berger describes it, found itself low on cash and in dire need of a culture shock. That came in the form of new chairman and CEO Louis V. Gertner Jr. in April 1993. Billions were cut in expenses as plants were closed around the globe and IBM's workforce of 400,000 was whittled in half as a result of massive layoffs.

“IBM had to do very painful things to survive,” says Wladawsky-Berger. “And when things like that are happening, you have a highly demoralized workforce. It takes tremendous leadership to get people to stop dwelling on the past, and most companies that get in the trouble that IBM got into don't survive.”

For those that do weather the storm, a crisis and all it may entail—the changes in labor force, a retooling of existing business models to adapt to industry shifts, and a new call for innovation—can transform your company or organization to what it should have been in the first place.

“Just because things are bad doesn't mean you should hunker down and not do anything. You could come out of this better and stronger,” says attorney Sarah Shoaf Cabot, SM ’85, a principal at Faber, Daeufer & Rosenberg PC, who spent years working in the biotech industry where stock “can lose 90 percent of its value in one day.”

“Ask your employees: ‘If we need to save $10,000, how should we do it?’ ” advises Cabot. “If every company were able to look at where they need to go versus where they are now, they would be better off than they are today.”

“Out of chaos comes opportunity—and the bigger the chaos, the bigger the opportunity,” says Peter DiGiammarino, SM ’77, chairman and CEO of Compusearch Software Systems, Inc., and CEO of IntelliVen, L.L.C. “If you want to drive change, either wait for a crisis or create a crisis, because in a crisis you have to change.”

In the economic downturn of the early 1980s, DiGiammarino led a team charged with building a successful business that sold software applications and related services to support collection departments. They created a product line that ultimately raised productivity nearly 100 percent for large bank lenders who faced soaring delinquencies.

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