John Fellows Akers

John Fellows Akers (December 28, 1934 – August 22, 2014) was an American businessman. He was president (1983-1989), chief executive officer (1985-1993) and chairman (1986-1993) of International Business Machines Corporation (IBM).[1]

Education

Akers attended Yale, and while there became a brother of Delta Kappa Epsilon (Phi chapter).

Business career

IBM

Akers joined IBM in 1960 after serving in the Navy as a jet pilot.[2]

Akers said in 2010 “We were very square. We wore the blue suits, white shirts with button-down collars, striped ties, fedoras and wingtip shoes. The customers felt they could count on us.”[3]

He rose to become CEO. He was believed to benefit from support from one of his predecessors, Frank Cary.[4] In 1989, a young Sam Palmisano was appointed as Aker's assistant; decades later Palmisano would serve as chairman and CEO.[5]

Actions as CEO

Akers was credited with simplifying the company's bureaucracy to focus more on profits.[6] On January 29, 1988, in a sweeping restructuring intended to reverse three years of disappointing performance, Akers created five new, highly autonomous organizations responsible for all of the company's innovation, design, and manufacturing. The moves were intended to greatly decentralize the company, which had been seen as bloated and unable to keep up with the competition and give significantly more responsibility to a younger generation of managers, while significantly reducing the role of the company's Armonk, N.Y., headquarters in the day-to-day operations. Under the plan, thousands of employees had to switch jobs or find themselves working for new managers.[7] Akers' vision was to autonomize each division into "Baby Blues" with the aim of spinning them off from "Big Blue".[8]

Akers also presided over a major downsizing of IBM's workforce, cutting down from 407,000 to 360,000 by the end of 1991. The company had previously had a lifetime employment policy but successive voluntary buyouts and the first-ever layoff in March 1993, caused a morale crisis.[9] Akers also closed ten plants and trimmed manufacturing capacity by forty percent.

Resignation

On Tuesday, January 26, 1993, Akers was forced to announce his resignation, after several months of IBM insisting that it had full confidence in his leadership.[6] The company had posted a $5 billion annual loss.[10] The dividend was also slashed from $1.21 to 54 cents, after the company had failed to make enough profit to cover its dividend payments for eight business quarters. IBM president Jack Kuehler was shifted to the post of vice-chairman, while finance director Frank Metz was also ousted. Paul Rizzo, a rival with Akers for the CEO position back in 1985 who had retired in 1987 was restored to the post of vice-chairman and appointed finance director. Akers remained as chief executive for three months while a committee of directors chose a successor, long speculated to be an outsider.[11]

The management coup was mounted by longtime IBM director Jim Burke,[12] who organized secret meetings between Rizzo and outsider Louis V. Gerstner, Jr. to examine the company's problems.[8] It was also speculated that several entities were dissatisfied with losing their power on the board of directors and the declining stock price, including the banks which were once IBM's largest shareholders, as well as Aker's predecessors as CEO, John Opel and Frank Cary.[6]

Akers retired as chairman and CEO of IBM on April 1, 1993. He was succeeded in both positions by Gerstner,[13] the first CEO in IBM's history to attain the position from outside the company.

Legacy

Akers was chief executive during IBM's decline in the mid-1980s and early 1990s. Apple Inc. founder Steve Jobs described Akers as "smart, eloquent, fantastic salesperson, but he didn’t know anything about product.”[14]

The company's difficulties weren't caused by Akers alone, as some suggested that he was merely doing what he had been "programmed" to do by an outdated "IBM system",[6] while a complacent board of directors was also blamed.[15]

Other business roles

Akers was on the board of directors of Lehman Brothers when it filed for bankruptcy.

Personal

Akers died of a stroke at age 79 in Boston, Massachusetts on August 22, 2014.[16]

References

Notes

1. Rick Rojas and Steve Lohr (August 23, 2014). "John F. Akers, 79, Dies; Led IBM as PCs Ascended". New York Times. Retrieved June 11, 2020.
2. https://www.ibm.com/ibm/us/en/john_akers.html
3. https://www.ibm.com/ibm/us/en/john_akers.html
4. Bob Djurdjevic. "Akers: The Last Emperor (June 1991)". Djurdjevic.com. Retrieved 2014-07-28.
5. Timothy Prickett Morgan (7 November 2011). "Ex-IBM CEO John Opel dies aged 86". The Register.
6. Bob Djurdjevic (1993-01-26). "Akers: A Nice Guy Who Lost His Compass (Jan 1993)". Djurdjevic.com. Retrieved 2014-07-28.
8. Maria Pikalova. "How IBM Board Member Jim Burke Persuaded Gerstner to Put His Career At Stake". GOOD2WORK. Archived from the original on 2014-08-08. Retrieved 2014-07-28.
10. Lohr, Steve (1993-01-20). "I.B.M. Posts $5.46 Billion Loss for 4th Quarter; 1992's Deficit Is Biggest in U.S. Business". The New York Times. Retrieved 2017-03-25.
11. From LARRY BLACK in New York (1993-01-27). "IBM fires Akers and slashes dividend - Business - News". The Independent. Retrieved 2014-07-28.
12. Vanourek, Bob; Vanourek, Gregg (October 8, 2012). "The Legacy of Jim Burke". Triple Crown Leadership. Archived from the original on 19 November 2015. Retrieved 5 January 2018.
13. "IBM names RJR Nabisco's Gerstner as new CEO". UPI. Retrieved 2020-01-29.
14. Robert McMillan (2011-10-05). "Steve Jobs: HP Implosion Was an iTragedy | Enterprise". WIRED. Retrieved 2014-07-28.
15. Bob Djurdjevic. "''Akers: The Last Emperor? (June 1991)''". Djurdjevic.com. Retrieved 2014-07-28.
16. New York Times' John F. Akers led IBM as PCs ascended'

Bibliography

• Gerstner, Jr., Louis V. (2002). Who Says Elephants Can't Dance? HarperCollins. ISBN 0-00-715448-8.
• AKERS, John Fellows International Who's Who. accessed September 3, 2006.

External links

• IBM biography of Akers