When
we talk about change, is it necessarily a good thing? Some often perceive change
to be always for the greater good and some advocates change as a good thing.
But the question is, are those, always right? Change is often inevitable. It is
the only way in which we need to adapt and anticipate so as to improve
ourselves. Some way or another we are constantly changing. We grow. We age. And
alongside with this, our mentality and lifestyle changes. “Was the game we used
to find amusing when we were 10 years old still appears gives us the similar
thrill or experience when we are 30? “Are we still as active and agile as we
age being able to perform those acrobatic movements that we were able to do
before?” These are some of the questions we can ask ourselves if we think
change does not simply happen.

While
technology advances and reinvents each day, not all are willing to relinquish
these changes caused by these technological impacts. Reluctance to change is
fairly normal yet a destructive thing. In some cases when managers or
stakeholders fail to realize the possible consequences of change such as low
morale/lowered productivity, conflict, mistakes, would lead to significant
impact to the organization itself. Thus, stake holders often need to ask
themselves “By implementing these changes, what additional value do I bring to
my customers, employees and other stakeholders involved?”. Living in a global
fast-paced global environment, businesses, be it big or small is often hit by
the intervention of the need to change.

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When we talk about
change, what comprises of it? Changes such as brand identity, product image, company
logo and slogan may seem to be minor to stakeholders, but in most cases, it
will impact end users on how they perceive the product or services. However, large
scale change such as organizational change, acquisition or collaboration of
companies is often a complex and lengthy process. These kinds of changes often has
a major impact to the many aspects of the business entity and one is required
to keep changes under control while supporting these changes to transform the
business. One of which that occurred in the past decade was the acquisition of
IBM by Lenovo. It was referred as a “snake eating an elephant”. I will first mention
about how IBM rose to success through change as well as how the resistant to
change to adapt was one of their major pitfall. After which, I will focus about
the vast change that Lenovo had to readjust in terms of their organization structure,
goals and vision when they acquired IBM in 2005. Being one of the pioneer in
the PC industry, it was a huge move for a company to sell its business to
Lenovo for 1.75 billion especially with its roaring success in the 1980s with
majority of equity of the company was indirectly coming from that line of sales.
What made IBM PC so successful back then was mainly due to the fact that the
IBM PC had a highly modular design and as such, graphics hardware or storage
technology could be easily inserted if an upgrade was needed. It was the first
PC back then in the market that was able to do this in comparison to the PC
such as the Atari 800 which was designed
and built as a highly integrated personal computer. What this meant to the
consumers as such is that they are given the flexibility to upgrade their
systems whenever needed. In addition, with its huge reputation
that IBM established over the years, consumers were more inclined to trust the
product with being such a huge organization backing it up. What led to their
downfall and later, a full acquisition of the PC sector by Lenovo was more of a
strategic move according to Ex-IBM CEO Samuel Palmisano. He mentioned that IBM’s personal computing business had minimal room for
innovation. This was alongside with Lenovo’s perfect location which will allow
IBM to gain exposure in mainland China where it hopes to establish its name
within the country’s lucrative market. 
Little thoughts goes to the team of 12 when they built that
revolutionary computer system in XXXX. They did not expect that this would change the future
of the computing world and as such they released the full details of the
implementation and design as an open-source license giving other manufacturers
a “reference design” that they could start off with. This herald the eventual
demise of IBM’s PC industry giving rise to clones. Who would have known that an open architecture, purely for
research purposes invited companies to make knock-offs, thus allowing lower
prices personal computers to dominate the industry? However, this will be
another story on its own.

 

With its humble
beginning, Liangxiang’s (later known as Lenovo in 2002) root to success in the early stages was
to be able to identify the problem and seize the opportunity. As computers in its
founding years were predominantly dominated by IBM, with majority of them operating
in English, their most important initial achievement was to be able to recognize
that developing Chinese character computer system will allow Chinese consumers to
enter to the computing age. As a result, they leverage on importing various
foreign branded computer and installed this Chinese character function and
began supplying to China’s domestic market. They began exploring and venturing
into various aspect of the technological industry with their core vision of
“Innovation never stand stills”.

 

The company’s change strategy in the
acquisition of IBM’s person computer division in 2005 reflected the goals of
Lenovo’s leadership to gain access to the international marketspace, but it is
likely that few observers would have expected such an aggressive tactic from
this up-and-corner. This was done in response to increasing market demand for
state-of-the-art personal computers at home and abroad. Its unprecedented
acquisition represented a major step for the company as well as a major
incentive for Chinese industry across the board. This acquisition was
proof-positive that Chinese companies are not only capable of being competitive
in their domestic market but can also compete at a global level. After the
corporate merger, Lenovo had to formulate a company-wide strategy and business
model that would take the company in the right direction according to the dual
goals of increasing its domestic market shares while simultaneously gaining the
increased access to the international marketspace. To this end, Lenovo
developed a new business model that tackles the concerns and the changes they
are required to transmute in order to go global with the key objective of being
the world’s largest PC maker. Yang Yuanqing, current chief executive officer of
Lenovo used his knowledge garnered through his earlier career as a salesman and
promoted his “dual business model” strategy. This strategy is to achieve the
goals of both the enterprise market and the consumer market. The relationship
model that targets the enterprise market will be based on offering customized
offerings and services to meet the needs of the larger enterprise customers. On
the other hand, the transaction model that targets the consumer market will use
a more efficient and reliable value chain, strong demand generation on
attractive offerings, and the ability to adjust to market changes and outshine
their strongest competitor such as Dell while delivering the new Lenovo
products on a global scale. However, implementing any business model do comes
with issues. Issues such as language barrier, safety standards, feasibility and
overhead cost of employing talented workers needs to be considered in every
phase of delivering a good quality product to the end users. Due to these
difficulties, Dell and IBM did not leverage much on transactional consumer in
comparison to Lenovo, seeing that this widen ups a vast amount of opportunities
in expending their business entity.

 

One of their biggest and
bold investment was buying over IBM’s vaunted PC business.  According to Lenovo’s newsroom portal, the
merger will approximately add 10,000 current IBM employees of which more than
40 percent of whom already are in China and less than 25 percent of whom are in
the United States will be joining Lenovo. Of which, the first concern was
to coax the top execs from the US based firm to integrate into their company’s
culture and vision. This is followed by ensuring that cultural hybridization between
the East and the West takes place. As miscommunication between the new
employees from IBM and the current employees from Lenovo could spell a major disaster
from within.  Whenever a company merges,
the main problem for business owners will always be on how to retain their existing
corporate customers as well as any other consumers who bought their product.
The Chinese management team place great deal of trust on Steve Ward, the
architect from IBM’s side, whose main responsibility was retaining IBM’s major
customer in lights of the merger between the 2 companies. Developing a common
strategic alliance that takes advantages of both company’s core competency will
be one of the litmus test of Lenovo’s management savvy after this major
takeover. With technology playing a vital role in the economy and
globalization, companies must move and adapt to it. With these inevitable
disruptions, one must ensure that meeting the customer’s need was the ultimate
goal. Customers simply doesn’t care about what was achieved and how it is done.
What matters to them most was delivering a better value product at a
competitive price and this is the driving factor of a price war between
companies. What Lenovo did back then was focusing too much on customers but
left little emphasis on their employee’s well-being and their ability to be
able to adapt to such changes. And as such, according to an article from, the company reported losses of 226 million
U.S. dollars for the financial year 2008 ended March 31, 2009. And this is
mainly due to management issues and cultural collision between the 2
technological giants.

 

Yang mentioned that cultural
integration was their key factor of their eventual success and there were only
a few companies that can connect with the West in terms of technological
management and culture itself.

To curb this underlying issue of Chinese
culture dominating the Westerns’, there has been a few solutions that Chairman
Yang decides to impose in response to resolve it. One of which was the practice
of addressing other employees by their first names instead of their title. With
these titles, employee often feel that there is a hierarchy and thus limits the
level of creativity as they often feel that they are expected to respect their
seniors and are afraid to voice out their honest opinions. With employees coming from different
countries, background and language barrier between the Easterners and
Westerners, often these problems bred misunderstandings amongst the employees
when working with one another, thus hampering trust and the ability to build a
new culture.

Another concern to address by Chairman Yang was the difference
in meeting style between IBM and Lenovo. American style of presenter meeting
usually settles any impediments or issues beforehand so that the actual meeting
will be presented cleanly and smoothly, whereas in China, this kind of
practices were fairly new, as most of their meeting was to settle the issues
thru the discussion itself. To curb that, general rule like talking slowly and
voicing out opinion has been imposed. Generally, this aids in avoiding any
misunderstanding and individuals will be more understanding towards each other.
Through these, employees were working together in an open – minded culture with
trust between one another as well as the company being established. Naturally,
Lenovo was predominately Chinese dominated. As such integration of a new
culture definitely post a huge problem. This gave way to issues where IBM’s employee
tend to feel that the culture itself is strange and those who did not adapt to
you soon left. According to a former employee, most of the Lenovo staff were
young and few speaks English. In addition, rarely any managers had any
international business experience or overseas exposure. The way the company was
structured was very militaristic. Whenever staff who were late for the
meetings, they were tasked to stand behind their chair as an attempt to humiliate
them in a form to encourage them to be punctual in the future. Also, time and
freedom were strictly monitored by the use of card keys that keep track of
employee if they were in the building. And time that was spent outside the
building had to be accounted for else without any reasonable explanation, their
salary would be deducted. This kind of restrain often affects creativity and
employees often feel that there was a lack of trust and respect given towards
them. One of the recommendation was to have some team bonding session with the
staff and spent time to have a proper understanding amongst everyone.

As I am a strong believer of fostering strong communication
within a team, ensuring that everyone is on the same page and working toward a
common goal can prove to be vital. This can be seen in the above case study
where Lenovo had problems integrating their differences between IBM and due to
this, they incurred a hefty amount of loses. With team building activity and
allowing employees to have more freedom to explore more opportunity, freedom to
be accustomed to their culture without being restrained by strict rules and
regulation helps in bridging the gap in cultural differences. This will help employee
to feel more appreciated and enhance their productivity. Rather than enforcing
one to be accustom to the culture, adding more flexibility in company’s
guidelines and code of conduct will benefit in this kind of scenario. Many a
times, we often jump to the root of the problem without understanding the cause
of it. Thus, after boiling down with deep understanding, one can address to it
and make necessary changes to improve the situation. Ultimately, what matters
to business owners is often the end-result. And what we often neglect is the
well-being of the employees which are the most important resource in any
organization.

Being in this fastest-changing society where
technology predominately plays a huge role in changes in your industry, little
we realize that some way or another we are part of it. For instance, when we recollect
those days where sending letters out were one of the only ways to communicate
with friends or people abroad, this was slowly replaced by communicating
through emails or social media platform such as Facebook.

With these new changes, we ought to either
adapt or resist. Imagine life or running your business without sending emails. Conventional
letters take ages to arrival and let alone the risk of your letter not being
received by the recipient. Do we need to conform to society and peer pressure
to adhere to these changes? Does this change give any added value and what are
the impacts? When we encounter the dilemma of the need to change, we need analyze
it in a bigger picture and ask ourselves these questions. Ultimately, progression
is impossible without a change, one who cannot change their mindset cannot
change anything. 

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