IBM sales force to move toward specialization


Providing the first glimpse of his plans to revive IBM, Louis V. Gerstner Jr., the new chief executive, has decided to overhaul the company's 40,000-member marketing force in the United States.

Instead of continuing to organize the sales staff solely by geographic area and expecting it to sell everything from PCs to mainframes, IBM will rely increasingly on specialists familiar with customers in specific industries and experts on specific computer products.

Company officials and industry consultants said yesterday that the marketing program, which will go into effect within three months, represents a break with IBM tradition.

Analysts say the step is a carefully gauged effort by Mr. Gerstner to retain the advantages of being a big company by recasting the International Business Machines Corp. less as a supplier of computer equipment and more as a provider of information-management solutions to such industries as banking, insurance and retailing.

Although the focus of the work will change, the geographic organizations will not be scrapped. By moving toward a specialized sales force working within the current geographic areas, Mr. Gerstner is apparently trying to minimize the turmoil within a company that has been shaken by financial losses, staff cutbacks and management changes.

"Gerstner has to try to restore confidence and get the organization functioning again," said Mark Stahlman, president of New Media Associates Inc., a New York research firm. "He can't shake things up too much all at once."

Mr. Gerstner and other top IBM executives were not available for comment yesterday. But the company provided information on the marketing overhaul in response to an article yesterday in the Wall Street Journal that, IBM said, did not accurately characterize its plans.

The effort to focus IBM's American marketing force on product and industry specialties follows similar moves abroad and within pilot projects in the United States. In Britain, IBM's 12,000-person sales force is being divided into 30 units, each dedicated to selling specific products like mainframes and minicomputers or to work with customers in specific industries like banking, oil or manufacturing.

In the United States, the company's nine-state marketing group based in Chicago has also been restructured along specialist lines. And recently, Robert J. LaBant, senior vice president in charge of IBM's North American marketing and services division, has traveled around the country, meeting with his staff and speaking of the "Chicago model" as a forerunner of the future for IBM's sales force.

There was a lively debate within IBM, analysts and company officials say, about whether simply to break up the marketing force, assigning people to individual lines of business and cutting the numbers sharply. Paul A. Rizzo, a vice chairman, was said to be the leading advocate for that course, according to analysts familiar with IBM's discussions.

The argument for having a separate marketing force for each of IBM's 13 business lines is that they involve different activities, each requiring a distinct business model. According to this line of thought, there is little purpose for corporate IBM other than to function as a holding company.

But Mr. Gerstner rejected that approach. In a memo to senior managers, he explained that he wanted the company to focus on its customers and markets, instead of worrying about another sweeping organizational change. And he said he wanted to try refocusing and streamlining the marketing force, instead of scrapping it.

The Gerstner memo lists steps the marketing force will take within 90 days to make sure that marketing people are focused on specific product groups. Mr. Gerstner's first objective: "Lines of business should have dedicated sales resources in each geography, and these resources should be clearly defined."

One edict -- "overheads should be reduced whenever possible" -- suggests further staff cuts.

The memo does not deal directly with the issue of recasting the marketing force into industry specialists. But IBM officials stressed that this has been the trend in recent months and that under Mr. Gerstner this would increasingly be the emphasis.

Some consultants say Mr. Gerstner is taking the right course. Under the industry-specialist model, IBM will provide packages of hardware, software, services and consulting expertise to its big corporate and institutional customers.

"If IBM is to be successful, its future must be in providing industry-by-industry specific solutions to business problems," said Sam Albert, a former IBM executive who is a consultant in Scarsdale, N.Y.

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