Running head: SUCCESS THROUGH ENGAGEMENT 1

IBM BUSINESS CASE

Leadership Success through Dynamic Engagement

Gigi Ramadan

GMU

April 28, 2015

SUCCESS THROUGH ENGAGEMENT 2

TABLE OF CONTENTS

TABLE OF CONTENTS ................................................................................................................ 2

EXECUTIVE SUMMARY ............................................................................................................ 3

PROBLEM DEFINITION .............................................................................................................. 4

OPPORTUNITIES FOR IMPROVEMENT ............................................................................................ 5

CAUSE ANALYSIS......................................................................................................................... 5

RECOMMENDED SOLUTION .................................................................................................... 6

PROJECT DESCRIPTION ................................................................................................................. 7

GOALS AND OBJECTIVES FOR STEP .............................................................................................. 7

MEASURES OF SUCCESS ............................................................................................................... 7

IMPLEMENTATION OF STEP ......................................................................................................... 8

JUSTIFICATION ........................................................................................................................... 10

PROJECT PLANNING ................................................................................................................ 11

ORGANIZATIONAL IMPACT ......................................................................................................... 11

PROJECT ASSUMPTIONS ............................................................................................................. 12

PROJECT CONSTRAINTS/RISKS ................................................................................................... 13

MAJOR PROJECT MILESTONES ................................................................................................... 13

STRATEGIC ALIGNMENT ........................................................................................................ 13

COST BENEFIT ANALISIS ........................................................................................................ 14

COSTS ........................................................................................................................................ 14

CONCLUSIONS AND RECOMMENDATIONS ....................................................................... 15

SCENARIOS ................................................................................................................................ 15

ALTERNATIVES ANALYSIS ......................................................................................................... 16

ALTERNATIVE 1/DOING NOTHING - ........................................................................................... 16

REFERENCES ............................................................................................................................. 18

SUCCESS THROUGH ENGAGEMENT 3

EXECUTIVE SUMMARY

SUCCESS THROUGH ENGAGEMENT PROJECT (STEP) - An initiative for employee morale, increased

engagement of IBMers and company growth through a hybrid of integrated existing leadership

initiatives training intervention, Social Business model and Smarter Workforce Analytics to

enable and empower all employees as leaders.

ISSUE - IBM faces challenges to the engagement of our workforce due to constant changes. Top

tier leadership initiatives have become inadequate to engage the majority of IBMers across the

world. This inadequacy is manifested in lower productivity, lower revenue, increased employee

attrition and higher costs.

RECOMMENDATION - We propose that IBM should launch and implement an integrated initiative

(STEP) available to all IBMers. Various options and alternatives were analyzed to determine the

best way to leverage leadership best practices to improve the business processes and reduce

the overhead costs within IBM. The approach described herein expands on and aligns with our

core values. Existing initiatives will be reviewed, optimized and rolled out to all IBMers. The

recommended STEP platform is compatible with all other current IT systems.

ANTICIPATED OUTCOMES - We predict employee sentiment will improve by at least 15%,

productivity by 10% and revenue by 5% in year 1. Utilizing a multi-media platform will enable

IBM to integrate existing, tweaked leadership initiatives rolled out to all employees in a

seamless and consolidated manner. Technological affordances will reduce overhead costs

associated with training. The company will also benefit from timely and accurate analytics.

This real time access reduces errors in language barriers, improves communication and trust

across all levels of IBM, and is readily available to all users.

JUSTIFICATION - IBM cannot afford to have dissatisfied employees, and this approach was selected

over others because it applies proven leadership initiatives to all IBMers. Through STEP we

believe all IBMers can be enabled to think, communicate, act, optimize and feel like leaders.

SUCCESS THROUGH ENGAGEMENT 4

Background

IBM once has had a history of innovative leadership development and successful

transformation. However, with the current challenges directed at IBM revenue and employee

morale, it has become apparent that once again a transformative intervention is required.

IBM has numerous leadership development initiatives that fall under the Leadership

Development Framework Vision. Almost every two years we launch a new initiative that

focuses on the top 1% of the IBM workforce. However, for success to be sustained there has to

be systemic and systematics evaluations of those initiatives and questioning the relationships

between them. These relationships between leadership initiatives should evolve with customer

needs, competition’s advancement and commitment to a healthy organizational environment.

IBM spends roughly USD$750 million every year on developing and training our employees, so

obviously a high level commitment exists but is it feasible? This business case addresses that

feasibility by examining the gaps that exist between where we want to be and where we are. As

IBM faces challenges to its goals set for 2015 and 2020 Roadmap, we would like to approach a

specific tool for success, Success Though Engagement Project to incorporate leadership

competencies (identified in the Leadership Development Framework) for all IBMers, not just

executives and top tier management. With this mindset, as employees feel empowered to

make positive differences they will become committed to do so. This intervention aims to

optimize organizational culture which will contribute to quality and revenue increases.

GOAL: In reintroducing the principle of IBM leadership development model with some

transformative elements incorporated to broaden its target audience to include all employees

subsequently, all IBMers will feel like leaders and take action like leaders and lead IBM right

to higher success.

PROBLEM DEFINITION

ISSUE - IBM faces challenges to the engagement of our workforce due to constant changes. Top

tier leadership initiatives have become inadequate to engage the majority of IBMers across

the world. This inadequacy is manifested in lower productivity, lower revenue, increased

employee attrition (in 2011 we reported to BusinessWeek.com that was 92%, in 2014 Forbes

estimates that number is around 84%) and higher costs. We propose that IBM should launch

and implement an integrated initiative (STEP) available to all IBMers.

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OPPORTUNITIES FOR IMPROVEMENT

Statement of Gap –There are numerous leadership initiatives that currently exist within IBM,

however, very few of them are integrated in a holistic manner. Additionally, within 50,000

leadership positions, only the top tier (less than 10%) benefits from the application of IBM’s

Leadership Development Framework. That translates to only 5300 out of 400,000 employees

who benefit from great leadership principles and training under our Leadership Development

Model. Rather than creating partnerships and alliances to the alignment of IBM values they are

independent entities that focus on top tier management and disregard the remainder of

employees. The current environment at IBM is challenged with the following issues that need

to be addressed:

Low employee morale due to massive amounts of layoffs (employee attrition and productivity)

Low employee morale due to shifting jobs to lower-skilled employees in lower salary markets (employee attrition and productivity)

Lower customer satisfaction with lower quality (less revenue) Employee engagement correlates to productivity, we are not at optimal (less revenue) Need to hire and train employees to replace those that leave for better situations (high

costs)

CAUSE ANALYSIS

Lower than optimal employee engagement has been caused by several dynamic forces:

Layoffs are a central part of our current business model, and as witnessed all over our forum and social media, employees are dissatified and vocal about it. In 2013 and 2014 IBM has spent a reported $2 billion on layoffs. Analysts had estimated that the $2 billion added up to about 26,000 people. (http://www.businessinsider.com/ibm-layoffs-are-coming-but-nowhere-close-to-100000-2015-1#ixzz3Y50UcJ1S). Employees that have been cut have been discussing their experience on the website of Alliance@IBM, a union that represents IBM workers. http://www.businessinsider.com/ibm-employees-say-that-layoffs-have-begun-2015-1#ixzz3Y55ibaJz.

Global expansion: a shift of technical expertise from high-paid US staff to lower-salaried staff in India, while cutting back on staff in the US. Its Indian operations grew from 3,000 to well over 100,000 employees.

13 layers of management seen as viewed as very bureaucratic Reliance on financial incentives, which does not relate to our commitment of employee

well-being and social responsibility. When incentives are purely financial, motivation suffers.

Low employee morale has resulted in lower customer satisfaction. http://www-03.ibm.com/press/us/en/pressrelease/46330.wss

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Our reputation is suffering, our employees are concerned and dissatisfied and investors are

very wary. Of course, it does not help that on April 20, 2015 we reported our 12th quarter of

decline. “Because the conduct of employees is crucial to customer satisfaction--both in product

and service--a company cannot cast away the loyalty of its employees without suffering serious

repercussions,” (http://www.businessweek.com/chapter/mills.htm).

RECOMMENDED SOLUTION

We propose that IBM should launch and implement an integrated leadership training initiative

Success through Engagement Project (STEP) to be available to all IBMers. This is the optimal

way to leverage leadership best practices to engage all employees, improve the business

processes, increase revenue and reduce the overhead costs within IBM. The approach

described herein expands on and aligns with our core values. Existing initiatives will be

reviewed, optimized and rolled out to all IBMers. The recommended STEP platform is

compatible with all other current IT systems.

Our argument is, maximize the existing leadership program investment within The Leadership

Development Framework by:

I. Rolling it out to all IBMers. Feasibility would identify areas in need of improvement,

and which components can be applied to training and therefore empowering all IBMers.

We acknowledge that some elements of existing leadership initiatives may not be viable

for roll out.

II. Leadership Succession planning and the current leadership pipeline training and

mentoring will be expanded to include all managers and identified potential managers

(all 50,000 not only 5300). Executives and managers should not be negatively affected,

if anything we anticipate only positive outcomes.

Various options and alternatives were analyzed to determine the best way to leverage

technology to improve the business processes and reduce the overhead costs within IBM. The

approach described herein allows us to meet our corporate objectives of continuously

improving efficiency, reducing costs, and capitalizing on technology. We recommend

integrating existing multi-media functions in order extend a Leadership Development

Framework to preserve data integrity and minimize time to train all employees and managers

on their responsibilities and respective functions. The platform is compatible with all other

current IT systems and will improve the efficiency and accuracy of analytics the company.

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PROJECT DESCRIPTION

What is STEP: A hybrid of integrated existing leadership initiatives training intervention, Social

Business model (for the fifth consecutive year, IDC ranked IBM number one in worldwide

market share for enterprise social software) and Smarter Workforce analytics to enable and

empower all employees as leaders.

GOALS AND OBJECTIVES FOR STEP

STEP directly supports IBM objective in alignment with core values and mission. The following

table lists the business goals and objectives that STEP supports and how it supports them:

Business Goal/Objective Description

Improve Employee

Engagement

Steps to overcome physical isolation, provide training

and opportunities enable employees to visualize their

strengths, role validation and importance to team

Reduce employee attrition Greater autonomy and flexibility will address employee

concerns

Reduce overhead costs Fewer staff required will reduce the company’s

overhead

Improve Analytics real-time and accurate reporting of all engagement

metrics

Increase Revenue STEP productivity and STEP quality results in Customer

satisfaction

MEASURES OF SUCCESS

All managers (5300 employees) that are currently impacted by the Leadership Development

Framework program get rated on all the leadership competencies as measures of success one

time annually. Nine leadership competencies are categorized by three abilities they include:

IBMers who are culturally adaptable, Able to leverage wide capabilities, and Can execute strategy in times of uncertainty.

The Leadership competencies currently (2014) are: embrace challenge, partner for clients’

success, collaborate globally, act with a systemic perspective, build mutual trust, influence

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through expertise, continuously transform, communicate for impact, and help IBM succeed.

These competencies align with IBM Core Values.

IMPLEMENTATION OF STEP

STEP will review and analyze existing leadership and social interaction initiatives (BasicBlue,

BBNL, LEADing@IBM, GM LDP, AccEL, Thinking Accelerator,Cornerstone for GBS, Whole Brain,

Jam, Social Business, Smarter Workforce….), and recommend how they can be integrated and if

any components need to be modified and how to meet employee engagement objectives. This

will be done by determining and selecting an integrated intervention that will be applied to all

employees alongside the existing systems will focus on top tier and managerial staff. Once

approved, the STEP will take a phased implementation approach.

ACTION 1 of STEP Our first recommendation is to add one more core value. If IBMers are

expected to be committed to IBM, then the organization has to be committed to its

workforce in a holistic grounded fashion.

EXISTING CORE VALUES

Dedication to every client's success. Innovation that matters, for our company and for the world. Trust and personal responsibility in all relationships.

ADD Commitment to employee empowerment.

ACTION 2 of STEP Broaden the IBM taxonomy to enable all IBMers to be identified as

leaders to introduce a culture of taking ownership at every level for the success of IBM. We

propose that the fastest, easiest and most efficient way to do this is through social learning.

By using the Social Business platform a learning revolution can evolve. At IBM, Scott

Edwards is a champion of the 70:20:10 learning model, Employee learning is 70 percent

self-directed, 20 percent mentoring and coaching and 10 percent formal training. Following

this, formal training efforts built around employee empowerment will provide employees

with the tools and critical thinking skills necessary for employees to seek answers on their

own. (IBM 2015). We also have to redefine the roles of our HR department to include

business consultancy with a keen eye on Social Business as a tool.

ACTION 3 of STEP Linking employee engagement to performance by encompassing all

IBMers into a modified Leadership Development Framework. This would begin by analyzing

data from IBM employee engagement surveys, as pre-assessment baseline for STEP and

utilizing the same metrics for post-assessment. “Kenexa integrates our measures of

engagement and enablement into a larger and more powerful concept called the Kenexa

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High Performance Engagement Model (HPEM),” (IBM 2014). Our acquiring Kenexa in has

put us at the forefront of measuring what we need to know; now we just have to use it.

The technology is fully web-hosted and accessible. Also for measuring engagement pre-and

post-STEP we will using rapid pulse surveys and social analytics dashboard. The 10

benchmark areas we will focus on are: Teamwork, Manager Effectiveness, Trust in Senior

Leaders, Trust with Coworkers, Retention, Alignment with Goals, Feeling Valued, Individual

Contribution, Job Satisfaction and Benefits (http://www.quantumworkplace.com, 2013).

Once the data is analyzed it should be mapped to performance metrics from performance

reviews, actual performance numbers (if applicable) and other employees..

Existing Framework For Leadership Development Framework

Proposed STEP Framework For Leadership Development Framework

ACTION 4 of STEP Once viable components of existing leadership development

initiatives (ones that meet STEP outcomes) have been identified, integrate them in a

singular multimedia function that serves as learning platform, a Social Business platform

and analytic repository. IBM's Social Business initiative and creating a Smarter Workforce,

connects all employees. “You can monitor the discussion of your brand or employee

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sentiment and spot trends early by mining data from blogs, wikis, tweets and more.

Employees should also feel trusted by management and not like something that needs to be

monitored and controlled,” (IBM, 2011).

ACTION 5 - The existing 3 part process of the Leadership Development; Planning,

Identification and Development, and Placement will be followed by Evaluation to continue

the leadership succession planning methodology. The intervention will evaluate all leaders

progressively along the continuum. With Feedback from analytics (Smarter Workforce),

surveys, reviews the STEP team will also identifies key measures to determine the success

of this new leadership skills approach in the coming months and years:

Assess skill development to measure improvements in relevant competencies over time.

Measure improvements in employee satisfaction based on employee feedback (we

stopped measuring and reporting employee satisfaction rates in 2011, through STEP

analytics we need to extract data and be accountable for these numbers once more)

Expect better availability of critical skills to meet business needs.

BENEFITS OF STEP/ANTICIPATED OUTCOMES

We predict Employee moral may improve by at least 15%, productivity will increase by at least

10% and revenue to increase by 5%. Utilizing a multi-media platform will enable IBM to

integrate existing, tweaked leadership initiatives rolled out to all employees in a seamless and

consolidated manner. Technological affordances will reduce overhead costs associated with

training. By integrating Training and Social Business mechanisms the company will also benefit

from more timely and accurate analytics (to grow understandings from those connections, and

using those insights to advance business processes). This real time access reduces errors in

language barriers, improves communication and trust across all levels of IBM, and is readily

available to all users. Not only do we expect no increase in overhead costs, we expect savings,

due to offering accessibility to existing multi-media training (virtual classrooms, online labs,

webinars, mobile apps, etc.) that is relevant to all employees. Additionally, social business

affordances reduce the need for typical middle management tasks .Finally, we expect 10%

decrease in employee attrition (by dissatisfied employees) in the first 12 months.

JUSTIFICATION

The purpose of this business case is to stress the necessity of developing a leadership mindset

across all employees, especially those that have become disillusioned, frustrated and lack

confidence in their job status. As employee morale is declining along with customer

satisfaction and revenue, the ideals that led IBM to success should once again be reinstated

throughout the company, not just the highest managerial tiers. “We believe leadership

matters…we believe leadership behavior drives organizational climate, and engagement, and

SUCCESS THROUGH ENGAGEMENT 11

that that in turn, drives business results…we truly believe that it is a causal chain…and that’s

why we invest in leadership development. It’s really behind everything we do” (Lombardo,

2011). There is not a problem with this statement, there is an opportunity to redefine

“leadership” and to whom that applies.

Leadership training currently a work-enabled learning program or an online self-learning

program, that would continue, it has proven to work. Using a blended approach of e-learning,

electronic community, coaching, and simulation, IBM was able to not only reduce costs by

moving training to the Web, but take advantage of the flexibility of the electronic medium to

provide a richer learning environment for students. This model will offer substantial cost

savings. The content and the audience need to be addressed for transformation and the

evaluation methods need to support the objectives of a dynamic learning model. The focus is

create leadership training combines with Social Business that fosters employee engagement.

“Social technologies provide networks, transparency, agility and democratization

of the workplace, which can flatten the hierarchies of yesterday, (Jamming on Social Business,

IBM 2011).

Implementation of STEP will result in greater efficiency with regards to company resources and

business processes. STEP is also aligned with corporate strategy and objectives since it uses

technology to improve the way we do business. While other alternatives and the status quo

were analyzed, STEP was selected for proposal in this business case because it provides the best

opportunity to realize benefits in an expedited manner while also allowing for the greatest

improvement in efficiency and cost reduction. Other alternatives assumed greater risk,

provided less benefits, were too difficult to define, or were not suitably aligned with current

corporate strategy and/or objectives.

PROJECT PLANNING ORGANIZATIONAL IMPACT

Having STEP be organic and internally developed will create a necessity of reshuffling some roles,

expanded responsibility and time pressures. However, we do not see this as an elongated process, and

the efficiency that is achieved will more than make up for it.

STEP will impact IBM in several ways. The following provides an explanation of how the

organization, tools, processes, and roles and responsibilities will be affected as a result of the

implementation:

Tools: the existing leadership initiatives for all managerial staff will continue alongside STEP

implementation. This will require minimal training to non-managerial employees since current

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training systems would be expanded with STEP content. Technology would include Cloud, IBM

Verse, video, and our intranet, IBM Connections.

Processes: with STEP comes more efficient and streamlined analytics and feedback processes.

This improved efficiency will lessen the burden on managers, increase communication

capabilities with support staff and provide autonomy to employees in empowering them to

take actions that make a difference. In order to effectively integrate phased approach has

been developed which will result in minimal/no disruption to day to day operations,

administration, activities. The following is a synopsis of the phased method:

Phase I: Definitions, teams and outcomes agreed on

Phase II: Planning – Evaluating current leadership training for feasibility of rolling out

to all employees, identifying necessary modifications and rolling out to US employees

Phase III: Imbedding leadership competencies in training will be accessible to all

employees

Phase IV: All employees will receive training on the revised platform.

Phase V: The platform will go live

Roles and Responsibilities: STEP will require collaboration of all departments as it will affect all

employees. We anticipate its outcomes in efficiency and increased productivity reflect in our

bottom line and provide an immediate return on our investment. The new platform will be led

by the STEP team and managed by the existing Global Executive and Organization Capability

(GEOC) department, consists of approximately 50 organizational and leadership-capability

consultants and succession-planning professionals and the existing IT group - we do not

anticipate any changes to staffing requirements. As for managers and executives, the senior

executives, and line managers would be fully engaged in recognizing promising talent and

making sure high potentials are identified in a variety of meetings and venues to ensure

sustainable leadership succession.

PROJECT ASSUMPTIONS

The following assumptions apply to the STEP. As the intervention starts and more assumptions

are distinguished, they will be included.

That innovation, quality, good service and employees still matter

All staff and employees will be trained accordingly on the new system

Funding is available for training and modification to existing training

All department heads will provide necessary support for successful project

implementation, accountability and consistent evaluation.

Project has executive-level support and backing

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PROJECT CONSTRAINTS/RISKS

The following constraints apply to STEP. As the intervention starts and more constraints are

distinguished, they will be included.

There are limited IT resources available to support STEP in addition to other initiatives.

Schedules and Budgets

Applying learning to work

Risks associated with STEP implementation include:

Fear of employee social engagement due to potential abuse of system

Fear of absolute transparency among employee base due to open communication

Criticism could further injure IBM’s reputation

Risk of project taking longer than anticipated and lose momentum

Value of this singular platform would not gain employee buy-in

Social business would be identified as optional

Employees may complain they are too busy to add more training

MAJOR PROJECT MILESTONES

The following are the major project milestones identified at this time. As the project starts

these can be adjusted, and finalized as for the actual timeline.

Milestones/Deliverables Target Date

Project Plan Review and Completion 07/01/2015

Project Kickoff 07/10/2015

Phase I Complete 07/15/2015

Phase II Complete 08/15/2015

Phase III Complete 09/15/2015

Phase IV Complete 12/15/2015

Phase V Complete 01/15/2016

Closeout/Project Completion 01/31/2016

STRATEGIC ALIGNMENT Step is in direct support of several of IBM Vision of Leadership Development. By directly

supporting these strategic plans, this project will improve our reputation internally and

externally and help the company grow.

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Core Values Goals/Objectives Relationship to Project

Trust and personal

responsibility in all

relationships.

Commitment to employee

empowerment.

Improve Employee

Engagement

Real-time communication, increased

trust, happier employees, increase

employee efficacy, increase productivity

Commitment to employee

empowerment.

Utilize Analytics

Leverage analytics for predictive

capabilities and consolidated repository

to measure employee sentiment

Innovation that matters,

for our company and for

the world.

Reduce overhead

costs

Eliminating problems, streamline

training, reduce attrition

Dedication to every client's success.

Innovation that matters,

for our company and for

the world.

Engage the

workforce for

customer

satisfaction

Engage employees broadly for

empowerment and revenue growth

COST BENEFIT ANALISIS COSTS

As we will be using existing programs and assets we expect costs to be minimized relative to a new program and technology. We anticipate low cost because there is no need to rewrite existing applications. With Social Business as a collborative platform STEP will cut training costs per learning hour.

Additional 16 learning hours per employee ($700 million/25 million learning hours = $28 avg per learning hour for 375,000 employees should equal $10.5 million but we are estimating that cost will be cut in half due to more efficient cloud technology. Projected cost $5.25 million

Create, modify the training and simulation modules estimated cost of $2 million IT support of operational analytics integrated with current programs. 1000 hours employees

IT support at Avg. $77 an hour (Forrester Consulting, 2013) $77,000. Systems maintenance and hardware $156,000 (Forrester Consulting, 2013).

Total 5,250,000 + 2,000,000 + 77,000 + 156,000 = $7,483,000

Cost/Benefit Analysis – We anticipate 5% increase in revenue as a result which would relate to $4.64 billion dollars a ROI of 619%.

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BENEFITS - TANGIBLE BENEFITS Savings Increase

5% to 10% productivity drag that better leadership practices could eliminate Dahl,

Less-than-optimal leadership practices cost 7% of their total annual sales. Dahl, Savings of employee attrition - Hiring and onboarding costs Social Business increases their productivity by 10%. Saving$70,000 annually team trained (IBM

2013) Thru Social Business, IBM reported that it was able to deliver five times the training at one-third

the cost with an estimated cost saving of $200 million (Article: eLearning Success- measuring the ROI, May 2013)

Replacement employee cost savings US $75,000 to $450,000. (IBM) SameTime@IBM (Social Business) We estimate savings of US $16.5 million per year in reduced

phone costs due to the use of instant messaging. IBM can avoid +/- $8M per month in travel costs Reduced product failure, less-frequent help desk calls, The regular staff attrition rate is around 12% pa Employees actively involved in leadership

programs 1% (IBM, Inshare, 2014) Revenue Increase

Gain of productivity Social Business increases productivity upto25% (IBM 2013) Individuals in an organization can still increase productivity by at least 30%. Dahl, Can achieve 5% reduction in customer defection increasing profits by up to 68% case study (IBM

2013) Organizations that excel in analytics often outperform those who are just beginning to adopt

analytics by a factor of three to one. (MIT Sloan,2013) Better leadership can generate a 3 to 4% improvement in customer satisfaction scores and a

corresponding 1.5% increase in revenue growth. Dahl,

BENEFITS INDIRECT/ INTANGIBLE- IBM reported Value of Training: 19% in staff satisfaction/engagement 17% in customer satisfaction 24% in ability to change procedures or products 12% reduction in time to competence 14% in increased productivity through learning interventions ( From: IBM Bridging the Gap: Integrating Learning and Work, Towards Maturity Benchmark Study, 2012-2013 ) Performance appraisal ratings over time Employee engagement survey scores Delivery quality Knowledge gain Improved customer service, compliance

CONCLUSIONS AND RECOMMENDATIONS

SCENARIOS

No Intervention scenario would only command further declines, both in morale, customer

satisfaction and ultimately revenue. An analysis of 200+ companies using The Ken Blanchard

Companies’ new Cost-of-Doing-Nothing Calculator shows that every year of delay is costs

organization an amount equal to 7% of their total annual sales. Less-than-optimal leadership

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practices cost companies millions of dollars each year by negatively impacting employee

retention, customer satisfaction, and overall employee productivity.

ALTERNATIVES ANALYSIS

The following alternative options have been considered to address the business problem.

These alternatives were not selected for a number of reasons which are also explained below.

Organizations must optimally develop and nurture their leaders to enhance employee

engagement, increase productivity and build the capabilities of their talent.

Revitalize the existing Leadership Development Framework to include planning, identifying,

development, placement and evaluating more than 5300 leaders in the 60,000 potential leader

pool. The benefits would be the savings of cost in using an existing, understood and

appreciated program that has already been “bought into” by senior stakeholders. The

consequences of utilizing a potential outdated program can be minimized by having the

program be dynamic, and adaptable. Justification for the Home grown vs. out-of-the-box

option is that the most valuable training incorporates the company’s own culture and values. In

2013, according to the American Society for Training and Development, companies spent on

average 62 percent of their learning and development budget on internally-produced training.

ALTERNATIVE 1/DOING NOTHING -

No Intervention, do nothing. Benefit is no immediate cost but ultimately this is the most

expensive alternative because revenue is declining, employee morale is low and IBM is

losing best, most profitable talent. IBM Training White Paper The value of training - The

high cost of doing nothing damages a company’s capabilities per year. By Year Three, an

organization has retained only 41% of its original capabilities, dwindling to 24% by Year

Six.

ALTERNATIVE 2-

Outsource leadership training program. If such a product existed, or could be custom

designed to IBM’s needs, is highly questionable. The pure size of IBM and factoring

60,000+ employees with the intricacies of a very specific corporate culture make this

intervention highly improbable. If such an option would be available, the costs involved

would be prohibitive.

ALTERNATIVE 3 –

Create a new leadership framework from scratch. Benefit would be measuring today’s

needs as they have changed over the year. The added benefit would also be addressing

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current and future predictive directions. New technology has emerged in training and

the IBM that existed in 2002 is very different from the IBM of today. The cost of this

intervention would be significantly higher than the initial investment for the current

leadership framework as it would factor in all the new surveys, interviews, research in

data collection and analysis and time invested from stakeholders.

No Project (Status Quo) Reasons For Not Selecting Alternative

Doing nothing Unnecessary expenditure of funds for

increased staffing levels

Continued occurrence low employee

morale

Continuous decline in revenue

Poor reputation of IBM

Alternative Option Reasons For Not Selecting Alternative

Outsource the implementation of a

leadership intervention that focuses on

increasing employee morale though

engagement

Ominously greater cost

Expertise already exists in IBM

Vendor’s lack of acquaintance of IBM

values

Alternative Option Reasons For Not Selecting Alternative

Internally initiate feasibility study, develop

new technology and, create all new

employee training through multi-

platforms

Lack of resources dedicated to new

project of this scope

Significant cost

Timeframe required is too long

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