IBM’s PC Business – same management different owners

While many companies are outsourcing the production of their goods to China, India and other companies, Lenova, the Chinese company that purchased IBM’s PC business, has outsourced management to IBM. Will the new Lenova/IBM company be successful. Time will tell. But before the pundits start talking, we must first know what success means. A profitable PC company – Lenova already has that? An increase in market share (US and other markets)?
Very interesting and humble.
The NY Times writes Executives at Lenovo – which gets about 98 percent of its $3 billion in revenue from China – are, in effect, acknowledging that they do not have the necessary global experience to run the new company.
“The most valuable asset we have acquired through I.B.M.’s PC business is its world-class management team and their extensive international experience,” says Liu Chuanzhi, chairman of Lenovo and one of the company’s founders.
Indeed, few executives at Lenovo seem disappointed by the move. In fact, many seem pleased to be buying into a blue-chip American corporation.
After all, Lenovo – formerly known as Legend – may be the biggest computer maker in China, but the company is still virtually unknown outside of Asia.
And top executives at Lenovo say they are eager to learn how to run a global company from their new colleagues at the PC unit of I.B.M., which operates in more than 150 countries and had $9 billion in revenue in 2003.
Preparations are already under way in Beijing. For the last few months, all vice presidents have been required to study English for at least one hour a day. The chairman says he has read books about Bill Gates and Andrew Grove. And the chief executive of Lenovo has agreed to give up day-to-day management of the company to assume the role of chairman.
His task will be to fly back and forth from Beijing to New York to consult with Lenovo’s newly named chief executive, Stephen M. Ward Jr., the senior vice president and general manager of I.B.M.’s Personal Systems Group.
Many analysts were surprised by Lenovo’s decision to outsource its management to New York.
“I admire what Lenovo is doing,” said Joe Zhang, a UBS analyst who follows Lenovo. “Many Lenovo executives have decided to do this at the expense of their careers. They’re putting personal ego behind for the greater good of the company.”