■ The Big Idea
In the early 1990s, International Business Machines Corp. (IBM Corp.) was in a devastating slump. Stock prices had dropped from $43 in 1987 to $12 in 1992. System/390 mainframe sales were at an all time low. IBM Europe, Middle East and Africa (EMEA) reported a dismal gross profit margin of 38% in 1992, down from 56% in 1990.

In both print and TV, chroniclers heralded the eventual demise of this industry giant. Charles Morris and Charles Ferguson co-authored a book titled Computer Wars. In it was a statement allegedly quoting Bill Gates as saying that IBM “will fold in seven years.” The Wall Street Journal said, “IBM will never again hold sway over the computer industry.

Then came Louis V. Gerstner, Jr. and IBM was never the same again.

■ About the Author
Louis V. Gerstner, Jr. was chairman of the board of IBM Corporation from April 1993 until his retirement in December 2002. He served as chief executive officer of IBM from 1993 until March 2002. In January 2003 he assumed the position of chairman of The Carlyle Group, a global private equity firm located in Washington, DC.

Prior to joining IBM, Mr. Gerstner served for four years as chairman and chief executive officer of RJR Nabisco, Inc. This was preceded by an 11-year career at American Express Company, where he was president of the parent company and chairman and CEO of its largest subsidiary, American Express Travel Related Services Company. Prior to that, Mr. Gerstner was a director of the management consulting firm of McKinsey & Co., Inc., which he joined in 1965.

A native of Mineola, New York, Mr. Gerstner received a bachelors degree in engineering from Dartmouth College in 1963 and an MBA from Harvard Business School in 1965. He is a member of the National Academy of Engineering, a Fellow of the American Academy of Arts and Sciences and has been awarded honorary doctorates from a number of U.S. universities.

Mr. Gerstner is a director of Bristol- Myers Squibb Co. and a member of the advisory boards of DaimlerChrysler and Sony Corporation. He is vice chairman of the board of Memorial Sloan- Kettering Cancer Center, a member of the board of the Council on Foreign Relations, a member of The Business Council, and a fellow of the America- China Forum.