Louis Vincent "Lou" Gerstner Jr. (born March 1, 1942) is an American businessman, best known for his tenure as chairman of the board and chief executive officer of
IBM from April 1993 until 2002, when he retired as CEO in March and chairman in December. He is largely credited with turning IBM's fortunes around.
Gerstner was formerly CEO of
RJR Nabisco, and also held senior positions at
American Express and
McKinsey & Company
McKinsey & Company is a global management consulting firm founded in 1926 by University of Chicago professor James O. McKinsey, that offers professional services to corporations, governments, and other organizations. McKinsey is the oldest and ...
. He is a graduate of
Chaminade High School
Chaminade High School is a Roman Catholic Marianist college preparatory high school for boys in Mineola, New York, United States. Chaminade’s main campus is also home to Saragossa Retreat Center, one of their three retreat houses.
Athletics
...
(1959),
Dartmouth College
Dartmouth College (; ) is a Private university, private research university in Hanover, New Hampshire. Established in 1769 by Eleazar Wheelock, it is one of the nine colonial colleges chartered before the American Revolution. Although founded t ...
(1963) and holds an
MBA
A Master of Business Administration (MBA; also Master's in Business Administration) is a postgraduate degree focused on business administration. The core courses in an MBA program cover various areas of business administration such as accounti ...
from the
Harvard Business School
Harvard Business School (HBS) is the graduate business school of Harvard University, a private research university in Boston, Massachusetts. It is consistently ranked among the top business schools in the world and offers a large full-time MBA p ...
.
Currently, Gerstner is the chairman of the board of directors of the Broad Institute of MIT and Harvard
and chairman of the board of the Gerstner Sloan Kettering Graduate School of Biomedical Sciences.
Gerstner is the author of ''Who Says Elephants Can't Dance'', the best-selling account of IBM's transformation; and he is the co-author of the book ''Reinventing Education: Entrepreneurship in America's Public Schools''.
American Express
Gerstner joined
American Express in 1978 as the
executive vice president
A vice president, also director in British English, is an officer in government or business who is below the president (chief executive officer) in rank. It can also refer to executive vice presidents, signifying that the vice president is on ...
of its charge card division. A year later he was named
president of the Travel Related Services group, which was responsible for American Express cards,
traveler's cheque
A traveller's cheque is a medium of exchange that can be used in place of hard currency. They can be denominated in one of a number of major world currencies and are preprinted, fixed-amount cheques designed to allow the person signing it to ma ...
s, and travel-service offices. At this time,
MasterCard and
Visa
Visa most commonly refers to:
*Visa Inc., a US multinational financial and payment cards company
** Visa Debit card issued by the above company
** Visa Electron, a debit card
** Visa Plus, an interbank network
*Travel visa, a document that allows ...
had begun to compete for the company's market share. Gerstner found new uses and users for the card. In 1980, most department stores did not accept American Express cards — by 1985 retail sales were second only to airline tickets in card purchases. College students, physicians, and women were singled out in various marketing pushes. Corporations were persuaded to adopt the card as a more effective way of tracking business expenses. Gerstner also created exclusive versions appealing to higher-end clients, such as the Gold Card, which carried an annual fee of $65 and came with a $2,000 line of credit, and the Platinum Card, which had a $250 annual fee, a $10,000 check-cashing benefit, and private club memberships for traveling executives.
As sales and profits rebounded, Gerstner was promoted to chairman and
chief executive officer
A chief executive officer (CEO), also known as a central executive officer (CEO), chief administrator officer (CAO) or just chief executive (CE), is one of a number of corporate executives charged with the management of an organization especially ...
of AmEx's Travel Related Services in 1982, and president of the parent company in 1985. Although he claimed the position at the age of 43, Gerstner dismissed the speculation that his success was the product of being a
workaholic
A workaholic is a person who works compulsively. A workaholic experiences an inability to limit the amount of time they spend on work despite negative consequences such as damage to their relationships or health.
There is no generally accepted ...
. Gerstner told Leslie Wayne, "I hear that and I can't accept that. A workaholic can't take vacations and I take four weeks a year."
As chairman and chief executive officer of the Travel Related Services division, Gerstner spearheaded its successful "membership has its privileges" promotion. Not only was the division continually the most profitable in the company, but it also led the entire financial services industry. Despite these successes, Gerstner hit a ceiling at American Express, as chief executive
James D. Robinson III
James Dixon Robinson III (born 19 November 1935) is an American businessman best known for his position as the chief executive officer of American Express Co. from 1977 until his retirement in 1993.
Education
Robinson attended Woodberry Forest ...
was not expected to retire for another 12 years. During Gerstner's 11-year tenure at American Express, membership had increased from 8.6 million to 30.7 million. He left AmEx in 1989 to succeed
Ross Johnson as chairman and chief executive officer of
RJR Nabisco following its $25 billion
leveraged buyout
A leveraged buyout (LBO) is one company's acquisition of another company using a significant amount of borrowed money ( leverage) to meet the cost of acquisition. The assets of the company being acquired are often used as collateral for the loa ...
by
Kohlberg Kravis Roberts
KKR & Co. Inc., also known as Kohlberg Kravis Roberts & Co., is an American global investment company that manages multiple alternative asset classes, including private equity, energy, infrastructure, real estate, credit, and, through its strat ...
.
IBM
Gerstner was hired as chairman and CEO of
IBM in April 1993. The company's board had forced his predecessor
John Akers to resign, looking first within the computer industry for his successor. However Apple's
John Sculley
John Sculley III (born April 6, 1939) is an American businessman, entrepreneur and investor in high-tech startups. Sculley was vice-president (1970–1977) and president of PepsiCo (1977–1983), until he became chief executive officer (CEO ...
,
Motorola
Motorola, Inc. () was an American multinational telecommunications company based in Schaumburg, Illinois, United States. After having lost $4.3 billion from 2007 to 2009, the company split into two independent public companies, Motorola ...
chairman
George Fisher, and
Bill Gates
William Henry Gates III (born October 28, 1955) is an American business magnate and philanthropist. He is a co-founder of Microsoft, along with his late childhood friend Paul Allen. During his career at Microsoft, Gates held the positions ...
of
Microsoft
Microsoft Corporation is an American multinational technology corporation producing computer software, consumer electronics, personal computers, and related services headquartered at the Microsoft Redmond campus located in Redmond, Washi ...
were not interested (other rumored candidates included
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