John Opel, Former IBM CEO, 1925-2011
November 14, 2011 Timothy Prickett Morgan
John Opel didn’t want to run a hardware store after college and the great irony (pun intended) is that he ended up running IBM, the largest data processing hardware company in the world at the peak of its mainframe and midrange prowess.
Opel, who was 86, died on November 3. He was IBM’s fifth CEO and without a doubt one of its better ones. Ginni Rometty, who will be IBM’s ninth CEO when she takes over on January 1, has several sets of big shoes to fill. (Well, the assumption is that Lou Gerstner’s were not that big physically, but virtually they were pretty big.) And as current and soon-to-be-retiring IBM CEO Sam Palmisano said, he believes Rometty is ready for the job and can do it, and there seems to be little doubt on anyone’s mind, after a few weeks, that she can.
Open grew up in Jefferson City, Missouri, where his father ran a hardware store. He got a BA in English at Westminster College in that state, fought in the Pacific Theater during World War II, and finished up his MBA at the University of Chicago in 1949. He had one job offer editing economic textbooks–the UoC is a hotbed for economics today, and was starting its rise back then–and for all we know, Opel might have gone on to be an economist had he taken that job. The other offer he had was from his dad, running the hardware biz.
On a fishing trip with his father and a friend named Harry Strait, who happened to be a salesman for IBM in Missouri, Strait offered Opel a job peddling the time clocks, meat slicers, and tabulating equipment that Big Blue sold at the time. Opel did the installations and maintenance of the equipment himself, and he was good at his job and rose up through the executive ranks. In 1959, when Tom Watson, Jr., was CEO at IBM, Opel was called to IBM’s Armonk, New York, headquarters by the son of IBM’s founder to be his executive assistant after Watson, Jr., saw Opel giving some training sessions to IBM sales reps. And in 1964, Opel was put in charge of the launch of the System/360 mainframe, the machine that more than any other in the history of IT, aside from the IBM PC, that set the pace for computing in the past five decades.
As I am fond of reminding people, IBM didn’t gorge itself on share buybacks and other financial engineering back in the early 1960s. At the time that IBM bet on the System/360 project to create a single, unified computing lineup with a shared software environment that consolidated its prior platforms and offered brand new capabilities, the company had around $3 billion a year in sales and committed a mind-boggling $5 billion to the multi-year effort. Opel was right in the middle of that, and he as much as anyone else helped IBM pull off the biggest IT project the world has ever seen. That is the IBM that I respect and that Oracle co-founder and CEO Larry Ellison also respects.
After running IBM’s finances and then its mainframe divisions for a while, Opel was appointed president of the company in 1980 when Frank Cary was CEO, and he was involved in the development and launch of the IBM PC the following year. At the mandatory IBM CEO retirement age of 60, Cary was bumped upstairs to chairman and Opel took over until 1985. IBM’s top mainframe salesman, John Akers, was on the fast track then, and although we didn’t know it at the time, so was Sam Palmisano, who Akers appointed as his own executive assistant in 1989. That was two years before the mainframe hit the wall and Unix servers and PCs started eating into the data centers of the world, and four years before Akers was ousted after IBM suffered huge losses during the recession in the early 1990s but mostly because computing had changed but IBM had not.
Palmisano and Rometty were forged as executives during that near-death experience, and that is why IBM has a cold and calculating eye toward any business that is not performing. Perhaps they will instill this in IBM’s next generation of leaders, or perhaps this is only something you can learn by experience. For all the great things Opel did, he didn’t see it coming, and neither did Akers. (Or if he did, Opel didn’t have any power or influence to help IBM.) But Opel did as well as any other executive in the upper echelons of global business trying to cope with the changing landscape in his market, and that is not just something. It is a legacy.