How the power players do it - by Fortune senior editor at large Patricia Sellers

IBM exec: Culture is your company's No. 1 asset

March 10, 2011: 11:11 AM ET

by Patricia Sellers


Now that's a subject that most leaders would be wise to pay more attention to.

Ginny Rometty speaking at an IBM event. Photo: Tom Raftery/Creative Commons

One boss who does: Ginny Rometty at IBM (IBM).

And to her benefit. Currently in charge of sales and marketing and strategy at Big Blue--and No. 8 on Fortune's Most Powerful Women list--Rometty is mentioned in Fortune's current cover story about IBM as a possible successor to CEO Sam Palmisano.

Recently Rometty spoke about culture at the Yale CEO Summit. Her talk to be so good that it's worth my sharing a few of her points here.

Culture, Rometty told the audience, has become the defining issue that will distinguish the most successful businesses from the rest of the pack.

For instance, Ford (F) got back on track by rerouting its culture. CEO Alan Mulally rallied faithful followers. And in turn, the entire organization refocused on Ford's core value: quality.

The biggest cultural challenge for corporate leaders: social media. Rometty cited Nielsen research that shows social media accounts for almost a quarter of the time Americans spend online. Social media's consumption of time spent on mobile devices? Around 50%.

So, she said, "Your message has to be a dialogue, and it has to be authentic." Especially, she added, since some research suggests that consumers trust information from each other twelve times more than they trust messages or ads from companies.

Most importantly, "You have to rethink the way you treat and talk to employees," she added.

On Facebook, Rometty said, more people "self-identify" with IBM than with any other organization. Given this reality, IBM decided to cede control to its employees--that is, let them devise behavior guidelines.

This process began in 2005, when IBM employees used a wiki to create a set of guidelines for all IBMers who wanted to blog. Since then, IBMers have evolved the guidelines to include all social media.

Today, IBM's "Social Computing Guidelines" aren't necessarily what would come out of an Office of the President. For example, No. 10 of 12 on the list is: "Don't pick fights, be the first to correct your mistakes."

Hey, it works. This sort of culture-carrying throughout the organization has helped propel IBM near the top of Fortune's Most Admired Companies list. And it has helped propel Rometty's career as well.

Now that she's close to the top, she believes more than ever: "Culture has to come from the bottom up."

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About This Author
Pattie Sellers
Pattie Sellers
Senior Editor at Large, Fortune
Executive Director of MPW/Live Content, Time Inc.

Pattie Sellers has written more than 20 Fortune cover stories including "Marissa Mayer: Ready to Rumble at Yahoo," "Muhtar Kent's New Coke," "Oprah's Next Act", "The $100 Billion Woman" (Melinda Gates), and "Gone with the Wind" (Ted Turner). She co-founded Fortune Most Powerful Women and oversees the Fortune MPW Summit, the preeminent gathering of women leaders in business and beyond—and programs such as Fortune MPW Entrepreneurs and the Fortune-U.S. State Department Global Women Leaders Mentoring Partnership. Pattie also develops Live Content across Time Inc. Her blog, Postcards, is about how power players lead and navigate their careers. Pattie won Time Inc.'s prestigious MVP award for her performance in 2012.

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