John Fellows Akers

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John Fellows Akers (born December 28, 1934) is a U.S. businessman. At IBM, he was president between 1983 and 1989, the CEO from 1985 until 1993; and chairman between 1986 and 1993.

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

IBM[edit]

Akers ascended to CEO as a result of support from his predecessor Frank Cary.[1] In 1989, a young Sam Palmisano was appointed as Aker's assistant, decades later Palmisano would served as Chairman and CEO.[2]

Akers was credited with simplifying the company's bureaucracy to focus more on profits.[3] 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 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.[4] Akers' vision was to autonomize each division into "Baby Blues" with the aim of spinning them off from "Big Blue".[5]

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 the mass layoffs caused a morale crisis.[6] Akers also closed ten plants and trimmed manufacturing capacity by forty percent.

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.[7] The company had posted a $5 billion USD annual loss, the largest in corporate history. 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.[8]

The management coup was mounted by longtime IBM director Jim Burke, who organized secret meetings between Gerstner and Rizzo to examine the company's problems.[9] 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.[10]

Akers retired as Chairman and CEO of IBM on April 1, 1993, and was succeeded in both positions by outsider Louis V. Gerstner, Jr.[11]

Legacy[edit]

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.”[12] CNBC has named Akers as one of the "Worst American CEOs of All Time", stating that, "While the rest of the world was moving toward personal computing, Akers remained stuck in the mainframe age, never quite figuring out what to do. Many outsiders viewed Akers as being in over his head. IBM was paralyzed by his lack of decisiveness."[13]

The company's difficulties, however, 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",[14] while a complacent board of directors was also blamed.[15]

Post-IBM[edit]

He was also on the Board of Directors of Lehman Brothers when it filed for bankruptcy.

References[edit]

External links[edit]

Business positions
Preceded by
John Opel
CEOs of IBM
1985–1993
Succeeded by
Louis V. Gerstner, Jr.