The deadline could be soon. Gerstner's contract runs out March 1, when he turns 60, an age when IBM CEOs often hire full-time caddies. Insiders say Gerstner will be gone in a year, two at the most. But unlike General Electric, where chief Jack Welch spent years training a handful of competing managers, IBM has been slow to start its management makeover. "You can't just trot someone out in a quarter," says Geoffrey Moore, author of the high-tech classic Crossing the Chasm. "It's critical that you orchestrate these major transitions."
Gerstner argues that he spent the past 24 months putting together the company's future team of managers. But Palmisano, 49, remains largely unknown outside IBM. And until the announcement 10 days ago, IBM appeared in no hurry to change this. Big customers and technology partners say he hasn't been by to meet them. And while Palmisano delivered a keynote address this January at the LinuxWorld trade show in New York, he has since kept a low profile.
Inside the company, the story is different. Palmisano is already taking on a bigger role. "If you want to get something serious done, everyone points to Palmisano," especially when it comes to strategic alliances and other key decisions, says Vivek Ranadive, CEO of IBM partner Tibco Software. "He's the chosen one."
Palmisano has led many of the company's key businesses. In 1996, he was appointed to revitalize the lagging PC business. Products had been slow to market, and sales were lackluster. He reassigned executives, cut down on meetings and got results. By the end of the year, IBM's business had gained market share for the first time in the 1990s.
In 1998, the 6-foot-2-inch golden boy moved to IBM's services business, where he continued to build the organization and cemented his reputation as a "big producer." When Apple Computer ousted CEO Gil Amelio, Palmisano made the short list of possible replacements. Compared with his CEO, Palmisano is warmer, friendlier, and he's more connected to IBM's past (he was a close friend of former IBM CEO John Akers). "From the minute you meet him you say, 'This is a guy I'd like to have a beer with after work,'" says former IBMer York.
It doesn't appear likely that Palmisano will be eaten alive, either. "If you're on Lou's team, you're a forceful personality," says Steve Mills, a 28-year IBM veteran and senior VP of its software group. "The wallflowers don't do very well here."
