IBM surpassed $100 billion in annual revenue in 2008, which is laudable–but 18 years late. Therein lies a tale about the dangers of what author Jim Collins labeled Big Hairy Audacious Goals.
In the early 1980s, IBM’s then-CEO John Opel declared that IBM would hit $100 billion in revenue by 1990. Although it may be hard to remember back that far, IBM was the world’s most profitable company in the 1980s. Its market capitalization accounted for roughly three-quarters of the value of the entire computer industry. Opel wanted to keep IBM from getting too complacent, so he challenged the company to increase in size from $40 billion of annual revenue in 1983 to the magic $100 billion mark by the end of the decade.
A recent post at Dan Ariely’s Predictably Irrational Blog about Microsoft’s Mojave Experiment reminds us of a cynical moment during our research for Billion-Dollar Lessons when we concluded that, too often, marketing is when companies lie to their customers, and market research is when companies lie to themselves.