Next Challenge German Leadership at Big Blue

After his success in Japan, Martin Jetter will take over as senior vice president of global services technology at IBM.
Smiling away.

At the end of IBM’s recent Think Forum in Japan, Martin Jetter bowed more deeply than usual. The head of IBM Japan had just confirmed to his clients what had previously been unofficial.

“At the end of the year, I will be going back to the United States,” he announced and then called out: “Domo arigato gozaimasu! (Thank you very much for your loyalty!)”

Mr. Jetter, once head of IBM Germany, is ascending to the top echelon of the U.S. company. Starting next year, he will serve as senior vice president of global technology services. With $39 billion in revenues, the division is by far the biggest in the technology giant – and represents the next big test for Mr. Jetter, who was born in Germany and studied  engineering at the University of Stuttgart.

Global technology services include outsourcing and cloud computing, which makes it possible to use software on the Internet without the expense of installing programs on company computers.

IBM was late to jump aboard the cloud train, and business has suffered because of it. Sales in the technology services division dropped 4.2 percent in the last business year, and revenues were also down in the most recent quarter.

Martin brought about a remarkable transformation at IBM Japan. Virginia Rometty, IBM chief executive

But Mr. Jetter seems to be the person for difficult jobs at IBM. In an interview with Handelsblatt, he emphasized that he and his wife Monika were comfortable in Japan and had planned to spend a few more years there ― unless something unexpected came up.

Pleased at how Mr. Jetter restructured a national company that had previously lived a life of its own, top managers at IBM tapped him for a new challenge.

“Martin brought about a remarkable transformation at IBM Japan,” IBM chief executive Virginia Rometty said. Just as he had previously in Germany, Mr. Jetter got company operations in Japan to grow again.

Before he took over in Tokyo, IBM's Japan business had shrunk for 12 consecutive years. Mr. Jetter needed only 12 months to put an end to that losing streak. In 2013, sales rose once again, by 3.5 percent. And he brought what had previously been an extremely Japanese-minded organization back into harmony with the global company – with methods that are now being used across the entire organization.

As an example, Mr. Jetter noted that 10,000 Japanese IBM employees are now learning English, instead of only a few hundred previously. Hundreds of these employees have been sent out into the world. “The big export is our Smarter Selling Academy, something which has been reproduced by IBM subsidiaries across the world,” he said.

Being sent to Japan was a practical test for Mr. Jetter himself. He had worked as a strategist at the company's headquarters and was asked to identify which countries would be important in five years and which in 15 years.  He held Japan, which had traditionally brought in 10 percent of IBM’s global revenues, in high esteem.

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“The larger metropolitan area of Tokyo alone has as much demand in our industry as Germany and China combined. That’s impressive,” Mr. Jetter said. “In information technology, no global company can afford to neglect Japan.”

He had ideas about how to make use of that demand and his bosses told him to make it work.

It was no easy task. The attitude at IBM Japan for many years was: We are a Japanese company first. “That has many positives, but also a few negative effects on the competitive capability of IBM locally,” Mr. Jetter said. Among positives was the company’s strong position in Japan. It also was a global leader in integrating large systems, and Japanese clients cared deeply about the quality of the company’s project management.

But through this pride, “a few structures and orientations were maintained too long in the era of globalization,” Mr. Jetter said.

Now he must prove on a larger scale the validity of what he tried out in Japan. Two strategies that worked well in Japan were communication and training. He will have great need for both in his new job.

 

Martin Kölling reports for Handelsblatt from Japan. To contact the author: [email protected].