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Head of IBM in Central Europe: Lithuania has “unbelievably well-developed infrastructure.”

June 02, 2015

Three years ago David La Rose took over as head of IBM’s Central and Eastern Europe division. For the last couple of days he has been conducting his first visit to Lithuania. VŽ caught up with him to discuss a range of topics; his different experiences of management in other countries, IBM’s cognitive computing system Watson the reasons behind IBM’s decision to stop producing computers and Lithuania’s road towards innovation.

You spent eight years heading up IBM’s operations in Shanghai. Before that you worked in Australia, and three years ago you moved to Prague. What are the main differences that you have identified between these different locations?

History is what I emphasise the most when talking to people about the differences between Central Europe and Asia. Here, in Central Europe, history is unbelievable and deep, and I am making an effort to learn more about it.

You have to appreciate the history of these countries to understand the local people and culture. Then, you can learn what motivates the people and seek out their best qualities. This necessity to understand the history was the greatest difference in my experiences in Europe and Asia.

The most distinctive feature of Asia is the pace. In Asia, everything happens at a speed I have never seen anywhere else in the world. The pace in my native Australia differs from that seen in China or Japan.

In Asia, everything happens faster; there, they want to see immediate results. In Europe, the pace is different. It is not slow though; everything is very well thought out. Then after this period of reflection, activities are pursued with a specific purpose.

You describe yourself as a leader whose task is to generate constant growth. Does the pace of Asia not clash with such objectives?

[quote text=”You have excellent infrastructure; the managers who I have had the chance to meet are impressive.” name_surname=”David La Rose” description=”Head of IBM Central and Eastern Europe division” left=””]

Different business cultures imply that leaders with different styles are needed in each. You cannot lead in a single dimension, you have to lead in many directions.

For example, in China it was very important to consider unforeseen consequences. If a decision was made in a meeting one day, the next day as soon as you got out of bed implementation would have started at full speed, like a train that leaves the station at 100 miles per hour. There would be problems if it went in the wrong direction.

Where is IBM heading? Last year, IBM sold its x86 server division. Why?

IBM is an innovations company creating high added value for businesses. Innovation is what we do. This means that we register more patents per year than any other company in the world and our lead in this field is significant. We seek to ensure the operations of the largest banks, telecommunications companies, hospitals and airlines in the world.

Hence, if any branches of business or product lines become items of mass-consumption, as a rule, IBM withdraws from that market. Personal computers turned into a mass product, and IBM withdrew from the sector. The same happened with printers and x86 servers; they became a mass consumption business, and IBM withdrew. We constantly revise our portfolio seeking to ensure that our operations create high added value.

What is next, what is our next great invention, what are we heading towards? The next great idea of ours – actually, it is already more than just an idea – is cognitive computing. We entered this field with our launch of the Watson system. These are learning computers.

Watson is currently being  is used to process big data, right?

At present, information is being created in  the most diverse ways and in such volumes that nothing can deal with. We believe that data is the new natural resource and, like any other natural resource, it does not become useful until you process it.

Gigantic companies accumulate tremendous volumes of data requiring great computing capacities to process. Only processed data can provide a competitive advantage to those companies.

One obvious field for the application of data analysis is the healthcare sector. Here we cooperate with physicians, hospitals and universities seeking to teach Watson everything that has been achieved in researching and diagnosing cancer. Thus, oncologists everywhere will have access to great volumes of data already synthesised: according to the symptoms, Watson will be able to determine the disease of the patient and predict the probability that the diagnosis is correct.

The system can also be applied in banks, where it can provide advice on finance issues. However, so far it has been mostly used in the healthcare system. It is no longer a field of research but a business division at IBM corporation.

What is the role of Eastern and Central Europe in all this?

The same as any other division of IBM – creating value for IBM shareholders. The question here is – how.

There are three fundamental directions of IBM activities: data, cloud computing and engagement. We already spoke about the data. As cloud computing arrived, technologies shifted from physical systems to services in the virtual space. The third and, in my opinion, very important direction refers to engagement.

We notice that increasingly more services are moving towards segmentation by one. Five or ten years ago, you would have been asked to fill in a questionnaire and finally you would have been offered services according to whether you are male or female, your age or the amount of your salary.

Nowadays the thinking has changed: each individual consumer is a separate segment for the service provider. This is part of the engagement. What do we offer to our customers? Solutions for how to improve this interaction with each individual customer and how to do this distinctively. You will rarely hear us speaking about products, because the focus is on innovation development.

How does this occur?

At present, it is already a fairly routine practice for the large banks to use our systems. Our main portfolio comprises computer systems, power supply systems and other equipment already installed in the banks and telecommunications companies. Generally, our customers use their main software on our platform.

Currently, we are helping them solve different problems. We aim to help them to become more competitive, create new sources of revenue and gain a competitive advantage. For that purpose we offer our portfolio – we can do that through consulting, service provision or suggesting a solution through organisations of business partners. We aim to find effective solutions.

This is your first visit to Lithuania. What are your impressions?

Your infrastructure is unbelievably well developed – this is what I have found out during this visit to Lithuania. Your optic fibre internet infrastructure is substantially better than that of other countries in the region. The consumer base is very sophisticated in the field of digital technologies.

After meeting various business partners and clients I have formed the impression that there is a great demand for cloud computing solutions. This issue was a very frequent subject of discussions in the last 24 hours.

In Lithuania, banks and telecommunications companies are developing cloud computing programmes. Here, companies understand the requirements of the new market very well.

I know I am speaking in very broad terms; however, at the moment we would not like to reveal the names of specific companies that we are helping with the development of private cloud computing infrastructure, because we do not have any completed projects in Lithuania yet. However, as soon as we complete them, we will make a very ‘loud’ announcement.

So, Lithuania has excellent infrastructure and a well-educatedconsumer base. What obstacles are there for innovation in Lithuania, and what should the country do to become more innovative?

One of the key tasks to be implemented by a country seeking more innovations is to keep its most talented people in the country.

You have excellent infrastructure; the managers who I have had the chance to meet are impressive. Not just in Lithuania – this applies to all three Baltic States; I have also had the opportunity to meet managers from Latvia and Estonia. I believe that innovations do not pose a problem. The problem that needs to be resolved is how to retain talent, and make sure it is applied and included in the national strategy.

How can Vilnius become a smarter city? How can better service be provided for its citizens, and how could these beoffered in a more effective and less costly way? This is not just a task for the municipality, but also for companies such as IBM.

Read the entire article in Lithuanian at VZ.lt 

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Aistė Žebrauskienė
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    Aistė Žebrauskienė Press Officer
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