IBM Redux: Lou Gerstner and The Business Turnaround of the Decade by Doug Garr, Harper Business, 1999, 351 pages.

When Doug Garr was hired by

IBM

(IBM) - Get Report

to be a speechwriter for personal systems group head Bob Stephenson in March 1996, he didn't know what to expect. "I was hired to be a speechwriter for a guy who hated to give speeches," said Garr in a recent interview with

TheStreet.com

.

It turns out there wasn't much that could prepare him for the 20-month experience, which ended in December 1997 when he says the Armonk, N.Y.-based company dismissed him for publicly discussing that he wanted to write a book on IBM CEO

Lou Gerstner

. After he left Big Blue -- an IBM spokeswoman says in response that Garr wasn't pulling his weight -- he developed enough contacts to complete

IBM Redux

.

Unlike many CEO profiles -- which are often no more than faux bios commissioned by the company -- the book's biggest accomplishment is its meaty depiction of the inner workings of Gerstner's time at Big Blue. (Gerstner's early life is not totally ignored, however; the first 115 pages of

IBM Redux

depicts a young Lou excelling as a hard-working "grind" at the rigorous Chaminade Catholic School in his hometown of Mineola, N.Y.)

Although not a technology wonk, Gerstner clearly has a gift for slashing costs off a balance sheet (fired employees would have an entirely different take on this "gift," of course), a trait he picked up during his years at the consulting giant

McKinsey

. After 12 years there, Gerstner was passed over for a plum job in New York. It was at that point that the executive changed course, Garr writes. "I went home and said I no longer wanted to be the guy putting slides on the machine," he recalled to a McKinsey colleague. "I wanted to be making the decisions."

This source-soaked book hits its stride when studying the ins and outs of Gerstner's reign at the top of the largest computer company on the planet. What makes it such an interesting read is that the tale of Gerstner's handiwork is interspersed with a great story line: IBM's metamorphosis from near extinction in 1993 to a Wall Street darling in 1999. Garr also wrote

Woz: The Prodigal Son of Silicon Valley

; this helps him splice together the inner-workings at Armonk with the outside world's reaction to IBM's turnaround.

IBM is notoriously guarded and Gerstner is a well-known control freak, so it must not have been easy for Garr to do research on the IBM chief executive. "Corporate America, is paranoid, IBM is very paranoid," he told

TSC

. Garr also recalled how executives who did talk to him would tell guards not to sign Garr in for fear that someone higher up would find out. "I never saw more nervous Nellies in my life."

The book gives great insight into IBM's lumbering PC division, which is dubbed as the company's "Vietnam" by one industry executive quoted by Garr. Last year, IBM's PC unit lost $1 billion, so it's difficult to imagine how inefficient IBM's PC business was back in Gerstner's early years. Computer components were not interchangeable, so there were always too few or too many parts in the company's inventory. At one point, IBM had seven months of inventory sitting on the shelves. Since PC components lose 2% to 5% of value each month, readers can clearly see why this division was -- and still is -- such a loss leader for Big Blue.

Garr details the behind-the-scenes events of IBM's hostile takeover of Cambridge, Mass.-based

Lotus

for $3.5 billion in June 1995, and how close IBM was to buying

Apple

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shortly before the Lotus acquisition. Although Gerstner publicly stated at the time that the firms' cultures were just too different, Garr uncovers that the real reason for the fallout in talks was that Apple's top executives were more interested in their golden parachutes than in merging with IBM.

One drawback to the book, which

Business Week

reviewer Ira Sager has also noted, is that Gerstner's voice isn't heard. Garr states in his full-disclosure notes at the end of the book that Big Blue has never cooperated on a book written about IBM or an IBM executive, and it wasn't about to make an exception for his project. The author -- who has continued his speechwriting duties for such luminaries as Carly Fiorina, the newly crowned CEO of

Hewlett-Packard

(HWP)

-- says he did most of his due diligence for the book by interviewing former IBM and McKinsey executives, especially former CFO Jerry York, who some consider to be more responsible than Gerstner for financially turning around Big Blue.

Thus, it's not surprising that Garr's book is much more effective looking at IBM's turnaround from an outsider's, rather than an insider's, perspective: His viewpoint is more what you'd expect from an investigative reporter than from a former IBM speechwriter writing for an outside audience.

It's safe to say there will be a ghost-written autobiography of Louis Vincent Gerstner Jr. in the future, perhaps after his self-imposed 10-year stint as CEO expires in 2003. Gerstner's massive ego -- which includes having a reserved seat called "the throne" on his corporate jet -- wouldn't have it any other way.

Let's just call Garr's

IBM Redux

a substantive and engaging prequel.

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