Lesson from the top: Quiet diplomacy at work
Meir Nissensohn, who used to be the CEO of IBM Israel, talks about the merits of quiet diplomacy at the workplace.
When 11-year-old Meir Nissensohn was told that his family was leaving Buenos Aires and immigrating to Israel, he decided to rebel. "There, we would go to Boca Juniors games, and in Israel they took us on Saturdays to the field in Kiryat Haim. It wasn't the same." Even today, almost 60 years on, Nissensohn jokes about local soccer. He worships the Argentinean game, especially now that he can watch it here on television. "Israeli soccer hasn't improved much," he says. "Here it is not obligatory to pass to a player on your team. In Israel, it's a much more social game. You kick freely and pass to the opponent, too. There, everyone aims for the other goal, because in Argentina the whole game is aimed at winning."
At first, Nissensohn boycotted his school in the Ramat Chen neighborhood of Ramat Gan, where he settled with his parents, two brothers and two sisters in 1955. "I didn't want to study, and I said that the Israel story didn't interest me." Then he asked to be sent back to fifth grade so he could sit beside his younger sister. "I didn't like Israel and I rebelled," he recalls. "On top of that, I didn't know Hebrew and didn't pass the entrance exam that the school principal gave us."
Nevertheless, Nissensohn proceeded to become an outstanding student. "The teacher was a lot smarter than me. She understood that I was acting out and flattered me: 'You are excellent even when you do nothing.' At the end of the first quarter, she gave me an A in every subject except Hebrew. That made me change course: noblesse oblige." The principal also knew how to get the job done, and at the end of the year he offered to let the rebellious Nissensohn skip straight to seventh grade - on condition that he pass three exams at the end of the summer.
"They were good educators who understood what it does to a kid when you have faith in him and give him a challenge like that. My parents suggested that I spend the summer vacation having fun, but I studied. The communists put it into our heads that everyone is equal, but that is erroneous. There are people who were born to work and there are those who were born to live it up. Whoever was born to work is unhappy having a good time; whoever was born to have a good time is unhappy working."
Avoiding local professions
Nissensohn is now wrapping up a 43-year career at IBM, one of the largest American companies in the world. He spent the final 16 years as CEO of IBM Israel, which employs more than 2,000 workers. In the past six years he was involved in 11 acquisitions of Israeli companies or companies that operated development centers in Israel. Along the way he was twice sent to fill senior roles at IBM France. A few months shy of his retirement, he is still involved in the company and helping the new CEO settle in. "But I am no longer the leader, because there is only one CEO."
Nissensohn was born in the Argentine capital to native Argentinean parents. "My grandfather's father was in the delegation that met Baron Hirsch," he says, referring to the German-Jewish philanthropist who promoted Jewish farming colonies in Argentina. "They were Zionists and wanted to come to Israel, but Baron Hirsch said it wouldn't work out so well. He bought land for them in Argentina and they went. Grandfather, who was very young, quit very soon because he didn't really know much about farming. He went to Buenos Aires and studied law. He was the first Jewish lawyer in Argentina. Later on, he was president of the community, which was a half-million strong. Grandmother was the president of WIZO Argentina.
"We immigrated to Israel in 1955 and lived in Ramat Gan. I guess the atmosphere at home was the right one. Our parents taught us the importance of work and personal responsibility. I had a very wise father. It is impressive how a man of that generation saw change and realized how important it is to adapt yourself to changes. He gave a kid the freedom to decide what he wants and how to do things. He said, 'You aren't studying for me. You don't want to study? Don't study.'
It worked, maybe because it was consistent and maybe because I followed the personal example that he set. He is a man who studied and gave importance to knowledge and education. They didn't attend parents' meetings at school. My mother would say to us in the morning, 'You were coughing in the night, don't go to school,' and I would say I was going. They never checked if I was doing my homework. I did my homework, I was a nerd. Dad was a little disappointed that none of us became a doctor or a lawyer.
"After high school I even got into an academic atuda in Jerusalem [an army program that allows soldiers to complete their university studies first]. But the night before registration Dad said to me, 'Look, I'm the last one who should be bringing this up because I want you to live here, but this world is changing a great deal and God knows what will happen in the future. A lawyer is a local profession.' Dad spoke from experience, because he did not remain a lawyer after we moved to Israel. I decided that I would enlist first, and decide later what I wanted to do."
After the army Nissensohn studied engineering at the Technion Israel Institute of Technology, Haifa, and landed a job at IBM, where he chose the administrative track. He views the social protest in Israel and the plight of the middle class through the same spectacles - as part of a global economic phenomenon, the same phenomenon his father warned about more than 40 years ago. "If 500,000 people take to the streets [referring to the big summer 2011 march in Tel Aviv], it means there is a problem.
"The coal miner in Britain was earning pennies and leading a horrible life, and at a certain point it was cheaper to bring coal from Australia and he lost his job. The same goes for the farmer who was used to working a small plot of land around the house and managed to make a living from it. Vehicles made it possible to transport goods from place to place and that was great, but it was very bad for the poor farmer. In our own day, too, if the younger generation continues to play the previous game - it won't work. It has to change."
In which direction?
"You have to find the new areas where you have added value; to reposition yourself. If you want to remain a coal miner or small farmer, you don't stand a chance. Everyone knows it is easier said than done, but there is no choice; the world is becoming flatter and flatter. Even suits today are measured here and sewn in Hong Kong ... A large part of production moved to China, and from China to Vietnam, because of the cost."
So the protest of the 500,000 people is not directly related to social justice?
"My first CEO at IBM told me he was ashamed to tell them at home how much he was making, because he was afraid it would offend his father. That is something that belongs to the past. Today, kids don't earn more than their parents. The American dream worked for 50 years. Not everyone got to be the CEO of IBM, but people improved their quality of life. Today they are struggling to reach the quality of life their parents were accustomed to, and therefore the wrongdoings and injustice also make it onto the table. When things are good and the quality of life rises, I am prepared to live with a great many injustices; but when that doesn't happen, I begin to look for where things need fixing."
What is your solution for social justice?
"We have yet to find a better solution for creating value than the free market. It would be great if we found one. Does capitalism have to be extreme or inconsiderate of everything? Absolutely not. The question is, how do you run the free market in a way that is balanced, enlightened, ethical and not swinish? The failure is not in the principle, but rather in the execution."
Nissensohn is blessed with personal charm and comes across as an unconventional executive. He is relaxed and highly self-aware - and mainly self-deprecating, sometimes excessively so, and ascribes much of his success to luck. If you ask him, he spent the prime of his career "not getting in the way" of the people working around him, or being in charge of "everything that was wrong with the company."
You'd come into the office in the morning and work until night for many years. Surely you did something positive here.
"Perhaps my advantage is that I recognize my limitations; the fact that I cannot know everything. My team of programmers knows that I can't contribute anything when it comes to writing code, and therefore if everything is fine they don't come to me. I barely understand the words they use. We have hundreds of software products, and they get updated so fast that even people in charge of limited chunks have trouble staying current. I set aside material that arrives to read 'when I get the time'; time goes by and it goes into the trash. Keeping up-to-date is a lost cause. The beauty of a global company is that we create for people the possibility of asking advice of those in the know. If I tried to manage the way that they used to, I wouldn't succeed - because I can't know better than my managers what they have to do. But I can create opportunities for them to maximize their abilities."
Managers don't have to know everything?
"Once and for all you have to shatter the paradigm and understand, not humbly, that you do not know [everything], and even if you did know, it is not certain that it's relevant. Therefore you constantly have to adapt yourself to the new situation. In the past they thought a good manager was a person who knew the plant and spent years working his way up from the bottom. Today that course has to be covered in six months, because everything changes. What you learned two, three, four years ago can help you, but also trip you up. When I was young there was a hierarchy and I thought differently, but when I was appointed CEO, I suddenly realized the enormous scope of the activities I was in charge of. So you change the way you manage, and try to look for where you have added value."
Where do you have added value?
"There are cases where you have to leverage the knowledge that exists overseas. I also have to make sure, for example, that the various departments work together; to bring together activities and people. Sometimes you have to resolve conflicts that do not get resolved on their own, to decide them."
You are a type of mediator.
"With people who cannot come to an agreement, I tell them to come to me. They enter the room, I sit and deliberately remain silent. In the vast majority of cases they reach an agreement without my opening my mouth. I feel that I did quite a lot - I put them in a room, I was nice."
The formative experience - the one that gave Nissensohn the tools to sit in the CEO's seat - was his appointment as human resources director at IBM at a relatively young age and without possessing the appropriate qualifications. He came to IBM as a young software engineer, a Technion graduate, but soon realized that writing lines of code did not appeal to him. "I'd thought that I would study programming and gain experience and travel the world. And then I realized that it was a beautiful thing but I didn't like it."
He applied to become assistant director of human resources, a job he held for 18 months. And then the director quit. "I was a little kid with barely any experience who found himself involuntarily, at the age of 27, as director of human resources for the company. It was irresponsible of the executives to appoint me, but maybe they had no choice. The company had 315 employees back then. I have held a lot of positions since: I was vice president for finance; I twice held senior positions abroad; I was CEO; but that was undoubtedly my hardest job. It's an impossible task."
What's so difficult about the job of human resources director?
"When you are dealing with people, you cannot be wrong in even 1 percent of the decisions. An employee can suddenly pull out a yellowing page from 35 years ago and remind you that you once gave him a score of 3 instead of 4, because it bothers him to this day. Of course, you do make mistakes, but knowing that mistakes have such an impact - it kills you. It's a job that requires, on the one hand, dealing with problems objectively; and on the other, remembering that people have subjective problems. You cannot ignore emotion, but your decision and your work must be professional. The analogy, perhaps a foolish one, is to a doctor: You don't want a doctor who is guided by emotion. Therefore I try not to involve feelings. It has helped me a lot over the years, but I learned it the hard way. I made a rule for myself that if I am ticked off about something, at that moment I do not decide. When I get upset I take a time-out."
Do you really manage not to get worked up?
"Yes. Today I also don't have the need. We deprive ourselves of a lot of energy when we let our feelings guide us, when we get angry instead of handling matters. I constantly tell myself, 'Meir, keep cool, you are a doctor and this is your job.' And, after all, nobody wants to go to a doctor who shouts and loses his cool. Everyone wants a doctor who is quiet, calm and rational. I guess I worked on myself, because I manage to treat things in a businesslike manner without the world falling apart. This conduct has also taught me and made things easier for me."
Still, doesn't a manager who is expecting results get upset when he is let down?
"I am a fairly calm person, mainly when those who upset me are not around to tell. But seriously, I am upset when someone makes an obvious mistake and insists on proving that he's right. That drives me to distraction. On the other hand, if someone comes and says, 'I thought it was right, but I made a mistake,' even if it is a serious mistake that caused major damage to the company I tell him, 'Okay, that's a pity' - and move on without feeling a thing. We all make mistakes. It's not that I work on myself: 'Don't get upset,' but when a person says that he made a mistake and admits it, what good will my getting upset do?"
Most people fly off the handle occasionally. There must be people here in the building who will say, "Meir Nissensohn yelled at me."
"I don't yell. I don't think I am entitled to yell at anyone. Am I somebody's father? Nor is it helpful. I do a job. I am paid for that. Why as a manager do I have the right to abuse the employees? Tell me when anyone has approached his manager and said, 'You really want to get what you need? Demean me, yell at me, humiliate me.'"
So what do you do?
"I close the door and explain in private what is wrong. The first time, a second time. Not in public, not in an email - certainly not in an angry email. I pick up the phone or invite [the person to come in] for a conversation. It works much, much better. Consider what works on you, what has a better impact."
How you do motivate people?
"I discovered years ago that we all seek to maximize our abilities. We need the money, that's obvious, but in terms of deriving enjoyment from work, maximizing abilities is the most important. I try to enable people to maximize their abilities, to provide freedom, not to be too hands-on, to allow changes in position, swapping, trying new things. I didn't know if I liked a lot of things until I tried them. I don't have a crystal ball. I was given a chance to try things, to grow, to be worth more, and I think that is what people are after. Think about yourself - I can also see your eyes, your enthusiasm about what you do."
How do you manage not to make a lot of mistakes?
"What saved me is the terrible difficulty I had in the beginning. It nearly broke me, but since it didn't break me, it taught me quite a lot. The option of losing my cool is nonexistent for me to begin with, because I know that it will do no good. I also like people: I see them from a centimeter and from a kilometer."
What about people who have failed? For example, when someone unsuitable has to be fired?
"When it's necessary, you fire. But in any case you must not come to that in a sudden manner. You accompany a weak employee for some time, point out to him the problems, try to help. It shouldn't come as a surprise to him. The company also loses out when an employee is fired. We all have a tendency sometimes to make a situation that is unpleasant for us also unpleasant for the other party, to justify it. But two wrongs do not make a right."
When do you decide to terminate?
"I don't play God and I don't dabble in psychology. I don't judge people, but rather judge performance and job suitability. You can demonstrate in an orderly manner what it is that you expect from people in terms of objective standards, and if they do not achieve that, they understand. If you have done a good job, in most cases you reach an understanding that we have come to the end of the road in a professional, correct and dignified manner."
Is the termination process at IBM different from that at other companies?
"The privilege of a large company is that we can afford to be more patient, and to do things in a manner that is correct in the long-term. It is possible that at a small company this is more difficult to do, because another redundant monthly salary can be a burden."
Maybe there is also an element of wastefulness in that?
"The difference is like that between a marathon runner and a sprinter - there is room for both. A marathon runner who tries to be sprinter will fall. As a marathon runner, I can do things right, handle the employees correctly; I'm not doing them a favor. All the other employees are watching. Perhaps this is one of the reasons why I enjoyed working at a big company. Maybe I am a marathoner."
Were there situations in which you behaved like a sprinter?
"Here and there, and I failed. Certainly. When I didn't think hard enough, I got clobbered later."
IBM Israel is fully owned by the global company. In addition to selling its products and services, the Israeli branch is also home to its biggest research and development department outside the United States, employing some 1,100 people. "I am glad to say I never heard the word 'Zionism' at IBM," Nissensohn says. "The decisions were always made on the merits of each case. The activity keeps growing and the results are excellent."
Within a six-year span IBM acquired 11 companies in Israel (some of them are R&D centers of multinational companies that IBM had bought earlier ). In practice, about 10 percent of IBM's total acquisitions worldwide - 107 acquisitions for some $20 billion - are connected to Israel. That is why the company today operates out of 14 different locations in Israel. Some of the acquired businesses go on to work opposite IBM companies in other countries and sell their products.
IBM Israel's main role is to locate the company, provide a little help behind the scenes with negotiations and primarily with integration. IBM has people who specialize in negotiations, and they go anywhere in the world where a deal is on the table.
According to Nissensohn, in contrast to what sometimes happens at other companies that buy a company in order to control its technology, at IBM they don't buy and then fire. "On the contrary, that is one of the things of which I am very proud: The number of people who work in each of the businesses today is greater than it was on the day we acquired them."
What is your most successful acquisition?
"It's tough to say because they have all grown since then, knock wood. The Israeli storage [technology] company XIV, which was acquired in 2008 for $300-350 million, is responsible for a phenomenal product. I am not allowed to say how much they sell, but it is a very successful and major product all over the world."
How do you function within this huge multinational structure of 400,000 employees in 170 countries?
"There is endless communication between us, alongside orderly processes. The amount of knowledge you need to make decisions is phenomenal. It's not like once upon a time when a person sat down and said, 'Okay, we'll do it this way.' We have two processes on the strategic level: One tries to understand where the technology is going so as to determine which products will be created (a global technology outlook ); and the other - which over the years we found that we need - tries to analyze the processes that take place in the market (a global innovation outlook ).
"Basically, three things make a company great: good strategy, good processes, and a good organizational culture. I am in charge of the strategic bit that pertains to Israel and for its adaptation, for processes and changes that are needed in Israel, and for the proper organizational culture."
What is the proper organizational culture?
"The thinking that there is a conflict between the employer and employee is fundamentally mistaken. In my eyes, there is an identifiable connection between them: the employee aspires to maximize his potential, and the company benefits when that happens. This is the groundwork for the organizational culture. I believe that the greatest influence I have derives not from what I say, with all due respect to the people who listen to me. The only thing that can make an impact is setting a personal example. You have to behave the way you expect other people to behave. 'Follow me,' like in the army. The commander runs first, that makes the difference."
There is debate about the government's involvement in grants for high tech. For example, the grant that Intel got.
"At IBM we did not take government funds - not as a matter of principle but rather because it was not justified from our standpoint, because there are ramifications to it. In general, I am in favor of encouraging the high-tech industry in Israel. Obviously, the investment in Intel was not a flop. They have tremendous export. I don't know whether it was the right thing to do - you'd have to see what the alternatives were, what happened with money that they put into other places. I favor a real discussion. A superficial discussion is harmful."
Is Israeli high tech a success story?
"It is a phenomenal success story, but if we do not take care to preserve it, it won't happen on its own. We have to devote as much as possible to education, so that we will have engineers, technicians and scholars of a high caliber. It requires the surrounding ecosystem, the help of the scientist and universities. The army does an incredible job, unintentionally perhaps. That doesn't exist anywhere else in the world. It is fantastic. They take the most suitable people, teach them (where they gain experience in the most advanced things ) and then send them out."
Recently there was heated debate over dividend distribution by multinational companies (profits trapped in Israel by the tax system ). How does it work at IBM?
"In principle, there are dividends. IBM is careful to comply with universal rules and does not build special rules for each country. They are careful not to pull 'tricks.' Trust is one of our core values. We receive daily reminders about ethical conduct. We have the 400,000 employees [worldwide] sign an ethical code twice a year and there are also exams on it."
'Confusion is not permitted'
How is your relationship with your bosses in the United States?
"Usually good; only rarely are there raised tones. It can't be helped. Our world works by a system that exerts pressure to deliver achievements. Confusion is not permitted. It's nothing personal, it's a machine. Once upon a time we were evaluated annually, and we thought that was awful; we moved to quarterly evaluations and thought that was truly horrible. Now the evaluation is weekly, evidently with some justice. You can't wait for the end to discover that there is a big difference between expectations and execution."
When asked if a good CEO is actually like a successful politician, Nissensohn agrees only with the positive aspect of the term. "The term 'politician' sounds negative," he says, "but you are living in an organization full of people and so you have to learn to attain cooperation - not in the negative sense of finagling deals. We don't finagle deals, it doesn't work in the long run."
All in all, has it been difficult for you?
"I always worked long hours. I don't want to call it 'working hard'; there are others who work harder than I do. I know that this sounds terribly disingenuous."
What do you mean by long hours?
"It's tough to define how many, because you don't know when it begins and when it ends. Let's say approximately 12 hours a day at the office and afterward at home."
You have a family, you've raised children, now there are grandkids. (He is married to Varda, an architect, and has two daughters and a son. ) Does it seem reasonable to you to work like that?
"No, the balance is unreasonable. But I don't know how to fix the facts of life. There is competition and there is no getting around that. If there are two people who are vying for a job, they will take the one who works more. If they do not say this outwardly, they will do it without saying. You miss out a lot on raising the children, on being a partner in the house. There are prices to be paid. There are no free lunches. A career is a beautiful thing, but raising children is no less beautiful. So maybe somebody opts more for career and less for children, or vice versa. In any event, there is a price to pay. Now you decide which price you prefer to pay. I have no solution to the basic problem. No one can say, 'Don't schedule calls after 4 P.M.' Let's see you tell the Indians and Americans not to schedule calls. In this respect, technology helps somewhat."
Technology also restricts somewhat.
"Technology helps whoever wants to get home at a reasonable hour, to share in putting the kids to bed and afterward finishing up the work he had planned for that day. You never finish it all. In the U.S., there are loads of people who work from home. It's a good combination for a person to be at home a lot and it's also good for the company, because it saves space that costs money and, all in all, yields a better result."
When you get home, where is the cell phone? In what position is the computer?
"The telephone and computer are with me at all times, open. I walk around with a Galaxy II, but when it comes to emails I hit the right letter only once every few times. The computer is in the living room and I glance at it periodically. It gives me flexibility. Also on Saturday. I've often been told not to write my cell phone number on my business card, but you'd be surprised - not that many people call it. Perhaps I'm intimidating. If they do take the trouble to call I say, 'Thank you for calling.' It's preferable, because sometimes if you allow a problem to fester, it is harder to resolve because the matter gets more and more bogged down.
Where has this been intrusive? You go on trips with friends and are about to leave, and then somebody calls and you hold everybody up. Happily, I manage to switch on and switch off fairly easily."
This may be a misperception or deliberate misleading on your part, but you sound like a person with little drive to get ahead.
"I have no drive? I don't know. Things sometimes get mixed up. I greatly enjoy doing a good job. I guess I wouldn't break down every wall to attain a specific position. I'm only flesh and blood. When you start believing that you truly are greater than everyone, it's a problem. Years ago, I read an article by the wife of a cardiac surgeon, who wrote that she married a nice modest man but the patients ruined him because they treated him like God and he changed. You have to keep reminding yourself to take it easy, keep things in proportion."
What about luck?
"I was very fortunate in that I happened to choose the right company to work for. I was fortunate to be at all sorts of junctures in the right place and at the right time. There are moments when I take a sideways glance, and there are excellent people here who did not have the luck that I had. Many of the successes depend on a specific situation. Even if there are two identical people, it's possible that one would have had the same thing a year earlier or a year later and fallen on his face.
"Others might be, but I'm not God. I never - in 43 years - argued over salary. I never asked for a raise - and yes, of course I had a mortgage to pay - but I'm no volunteer. Let's put things on the table: The orphans and widows who invest in IBM pay my wages. Did anyone force me to stay? No. But I enjoyed myself, and I don't think anybody owes me anything."
So now what, other than being a more available grandfather?
"There are so many interesting things happening every moment, and I'm like a kid in a toy store. Obviously I want to divide my time a little differently, carry on working in a nonoperative manner - in other words, not to manage a company but rather be a director or consultant. On a personal level, I want to get involved in social activism - I don't know what yet - and to have a bit more free time to do things I haven't done: family, reading, soccer (I feel bad about shaming the youngsters by playing ). We'll see how it goes. I have learned that whatever I plan works out differently. Reality gets the better of you. In the end I didn't go to law school. Sometimes I think that maybe I should have done that after all. I only look old, but I am young."