After another weak quarter for IBM, CEO Virginia Rometty made headlines by rebuking IBM employees in an internal video, criticizing the company for slow sales team response, poor closing rates and slow customer service response times.
IBM privately released the video to its 434,000 employees last week after a second successive quarter of poor earnings. According to the New York Times, company shares fell 8 percent — the biggest drop in eight years — the day after the quarterly announcement. The disappointing news sparked both Rometty’s comments and the reshuffling of a key executive, according to the Wall Street Journal.
Rodney Adkins, who was head of IBM’s Systems and Technology Group, was relegated to senior vice president for corporate strategy.
In an IBM press release, Rometty states that although the first quarter of 2013 operating net income grew, the company did not reach several of its goals. She blames a failure to close several important sales for software and other materials. However, she says, new IBM initiatives, such as faster customer service response, will improve the company’s financial picture.
Rometty’s concern about slow customer response is a valid one, according to business analysts. In a study, market research firm Peppers and Rodgers Group notes that strong customer service experiences heavily coincided with strong companies: 81 percent of companies that deliver strong customer service experiences outperform their competitors. What’s more, the firm notes, most companies with weak customer service are well aware that they have a problem — it’s simply difficult to put a solid customer service philosophy into practice.
Bill Robertson, contributor to investment research platform Seeking Alpha, notes that Rometty’s announcement instituted a new rule: Employees must respond to all customer questions and requests within 24 hours. That’s an excellent suggestion, Robertson notes.
Rometty is only the ninth president of the 102-year-old company. During her tenure, results have been mixed, according to technology news source Memeburn. Her position at the helm of the global technology giant appears secure for the moment, the site reports, but the pressure is on to improve earnings, especially given the mixed results she’s achieved during her time leading the company.
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