Sam Palmisano is Chairman of the board, President and Chief Executive Officer of IBM and Chairman of IBM’s Executive Committee. He was elected Chairman in October 2002, effective January 1, 2003, and has served as Chief Executive Officer since March 2002. Prior to his appointment, Palmisano was President and Chief Operating Officer. His career graph shows a steady growth from the time he joined IBM in 1973. In his long and illustrious career in IBM, Palmisano has held a number of key leadership positions. 1973–1989, Sales Representative; 1989–1991, Executive Assistant to Chief Executive Officer John Akers; IBM Japan, 1991–1993, Senior Managing Director, Operations; Integrated Systems Solutions Corporation, January 1993–1996, President; October 1993–1996, CEO; 1995–1997, Head of Strategic Outsourcing; Personal Computer Company, 1996–1997, Managing Director; Personal Systems Group, 1997–1998, Senior Vice President; IBM Global Services, 1998–1999, Corporate Senior Vice President and Manager; Enterprise Systems Group, 1999–2000, Senior Vice President; IBM Corporation, 2000–2002, President and Chief Operating Officer; 2002–, President and CEO; 2003–, Chairman of the Board. Palmisano was born into an old family that had its roots in eighteenth-century America. Its members had spread their influence across the United States as physicians, politicians, and business leaders. Palmisano's father owned an automobile repair business in Baltimore, Maryland, where young Palmisano learned his street smarts among the rough-and-tumble laborers of Baltimore's docks. He attended a Roman Catholic college preparatory school, Calvert Hall, in Towson, Maryland, where he distinguished himself as an honors student and an outstanding football player. He played center and tackle for the school and was noted for his intelligent and unselfish conduct on the playing field as well as for his toughness. Palmisano was also a gifted musician who joined Baltimore's musicians' union while he was in high school. He once had a weeklong professional engagement playing the saxophone in a backup band for the Temptations, which paid him a thousand dollars. He used his earnings to buy himself a car. Palmisano remembered his youth as a happy one with loving parents and siblings. He lived in a disciplined household where he was taught to behave well and work hard. In 1969 Palmisano entered Johns Hopkins University, where he became a popular student. He played football for Johns Hopkins and was considered an outstanding scholar-athlete. When he graduated with a bachelor's degree in history in 1973, he was invited by the Oakland Raiders to try out for their professional football team. Palmisano saw little future in physical collisions with men who outweighed him. Apparently a career in music did not appeal to him either, because he went to IBM's Baltimore office to apply for a job. He was hired as a Sales Representative and sent to an IBM training school; there he met Gaier Notman, who became his wife. Palmisano found IBM to be an exciting place to work in the 1970s. The company's employees referred to themselves as IBMers, meaning that they shared a special corporate culture. To Palmisano, IBM was more than a money-making enterprise; it was a corporation that stood as a model for other companies to emulate, a firm that gave women and minorities jobs and equal pay 28 years before the law required fair treatment. His winning personality, intelligence, and drive made him a successful salesman. IBM focused on building behemoth mainframe computers and inviting software developers to write programs for them through the 1970s and most of the 1980s. In 1988, however, Palmisano changed the way IBM sold computers. He had been assigned to a team formed to sell a new giant computer called the AS/400. His assertive approach to sales set the pattern for IBM's future. On his own initiative, Palmisano took the AS/400's specifications to numerous software companies and persuaded them to write programs for it before the computer was ready to market. The result was that when the AS/400 was launched, there were already over one thousand programs available for it. Potential customers had a multitude of applications to choose from if they purchased the computer—a powerful attraction that made the AS/400 one of IBM's most successful products. This achievement made Palmisano a rising star at IBM. Palmisano became John F. Akers' Executive Assistant in the spring of 1989. Akers, who was then IBM's CEO, later recalled Palmisano as the best Executive Assistant he had ever had—always ready with what Akers needed when he needed it. In 1991 Palmisano was sent to direct the operations of IBM Japan. During this period, Palmisano gained a reputation for being a maverick who challenged the decisions of upper-level managers while frequently introducing innovations that kept IBM Japan's balance sheet healthy. He was instrumental in bringing the ThinkPad®, a laptop computer, to the Japanese market and making it a success. However, IBM was doing less well in its home country and it lost $5 billion in 1992. In 1992, IBM's Board of Directors replaced Akers with Lou Gerstner, a manager from R.J. Reynolds, the well-known tobacco company. Gerstner chose to shift IBM from being a company that produced commodities to one focused on services to clients, and he recognized Palmisano as someone who shared his long-term goals for the company. Gerstner made Palmisano President of Integrated Systems Solutions Corporation in January 1993. Palmisano met with his managers for two days each month, examining every services contract that IBM held around the world. He wanted Integrated Systems to grow, and he pressed his sales force to target the clients of rival services companies. IBM's management had long believed that services contracts were for long-term profits, taking possibly as long as several years to enter the black. Palmisano, however, challenged the notion that services could not boost short-term earnings and insisted that new contracts make money from the very start. He led by example; he was noted for hopping on an airplane at a moment's notice to meet a potential client in person. His employees caught his fire—whereas the parking lot at IBM's headquarters was nearly empty at night and on weekends, the lot in Tarrytown was filled seven days a week, long after five o' clock. In 1993 Integrated Systems Solutions Corporation grossed $14.9 billion; by 1996 it made $22.9 billion. The flow of money generated by Palmisano's division helped Gerstner keep IBM intact while Palmisano's emphasis on service fit well with Gerstner's plans for the company's future. Gerstner consequently appointed Palmisano Managing Director of IBM's Personal Computer Company on April 1, 1996. The Personal Computer Company was a $10 billion per year business that allowed Palmisano to gain experience in running some of IBM's hardware units. That year, Gerstner combined Integrated Systems Solutions Corporation with other smaller service groups to form IBM Global Services, which accounted for 29 percent of IBM's total revenue. Palmisano's responsibilities were expanded in 1997 when he became senior vice president of the Personal Systems Group, which put him in charge of IBM's personal computer business. He was a rigorously goal-oriented leader who expected his managers to meet their promised goals. In December 1997, however, he found himself falling behind his own goals for the fourth quarter. Beginning on December 26, he held conference calls with his sales representatives at 7 a.m. and 9 p.m. every day through December 31, pushing them hard but finally meeting his sales goal. IBM's various businesses were booming, but Gerstner wanted to take IBM's services to a higher level. In January 1998 he made Palmisano a Senior Corporate Vice President in charge of IBM Global Services, which was the world's largest provider of information technology with 135,000 employees. Palmisano was then put in charge of IBM's Enterprise Systems Group. There he began IBM's acceptance of the free open-source-code Linux operating system in late 1999. Open source code allowed anyone to read and modify the operating system code to work with other programs. Palmisano advocated open-source software standards rather than proprietary standards as a way to unify all of IBM's hardware and software offerings. Such unification would allow clients to pick and choose what they wanted with the assurance that every component would work with all others without any special proprietary programs that might be difficult to learn. In October 1999 Palmisano introduced "Project Pain," in which IBM's servers were offered to customers at discounts as high as 70 percent. In 1999, IBM's computer business declined as part of a slump that affected high technology businesses worldwide, and the company's growth flattened. In spite of the downturn, IBM grossed $85.9 billion while netting $7.7 billion. IBM's services—particularly IBM Global Services—accounted for 41 percent of the company's revenues, and were largely responsible for IBM's business decreasing only slightly while competitors saw double-digit drops in income. Moreover, IBM had a market capitalization of $186 billion, providing it with enormous resources not only for weathering the downturn in business but also for readying itself for its next phase of development. Palmisano maintained that he was completely surprised when he was informed that he was the new President of IBM. Nevertheless, he became the company's President and Chief Operating Officer on September 1, 2000, responsible for its day-to-day operations as well as being Gerstner's heir apparent. Palmisano had acquired a nickname, "The Closer." The name was apt because he had, perhaps without realizing it, compiled the best sales record in IBM's history. His skills in closing deals with clients had sometimes made the difference between profit and loss on a division's bottom line. In addition to Palmisano's negotiating skills, he had also emphasized the importance of cultivating high-end clients and pressured his subordinates to pursue multimillion-dollar contracts. As President, Palmisano quickly established weekly operations conferences—even though he disliked meetings—in place of monthly ones, and asked for weekly reports from his managers detailing what business plans they had for the coming week. That year, IBM Global Services hired 19,000 new employees and grossed $33.2 billion of IBM's total income of $88 billion. Global Services's nearest competitor earned only $19.2. In addition to increasing sales, Palmisano strove to improve cooperation among IBM's various units. In January 2001 he made public IBM's intention to invest $1 billion in Linux; he wanted to give IBM's units a unifying goal to create hardware, software, and services that worked together seamlessly. Palmisano's resourcefulness was tested on September 11, 2001, when terrorists demolished the twin towers of the World Trade Center. The attack destroyed the offices of Fiduciary Trust's subsidiary Franklin-Templeton, one of IBM's clients. Palmisano saw to it that Fiduciary Trust received all the technological materials it needed to restart Franklin-Templeton—an IBM employee even checked local hospitals for a missing Franklin-Templeton worker. Palmisano's response to the emergency showed that he was reshaping IBM into a service company that cared about the well-being of its clients. He wanted to form a corporate culture in which employees could again say "I'm an IBMer," confident that they stood for something good. Further, he wanted his employees to understand that they were recognized by management for their good work. To do this, he took his personal touch to employees. One of his goals was to foster a sense of commitment to IBM's standard of excellence on the part of every employee, regardless of position. Palmisano is known for his charismatic and likable personality; he is also decisive, passionate about his work, and very competitive. When he ran Integrated Systems Solutions Corporation, a subsidiary of the International Business Machines Corporation (IBM), he was said to have kept a list of a rival company's clients and checked names off the list as his sales force won them for IBM. His usually relaxed demeanor belied a fiery temperament and a strong personality that drove him to micromanage almost every project he directed. Those who worked for him gave him high marks for honesty and candor; they liked him even though he often generated high anxiety levels in his subordinates with demands for almost daily updates on what they were doing. Palmisano's leisure activities included reading history books, skiing, golfing, and jogging to stay in shape. In recognition of his leadership role as co-chair of the U.S. Council of Competitiveness’ National Innovation Initiative, as well as his many business accomplishments, Palmisano was awarded an honorary Doctor of Humane Letters degree from Rensselaer Polytechnic Institute in September 2005. He brought optimism and exceptional self-discipline to his leadership of IBM and enthused the same in all the IBMers.