The Basic Beliefs of Tom Watson, Sr., IBM’s founder, guided the company through nearly a century of change — providing the guideposts for multiple reinventions that turned a small company into one of the pillars of global commerce. But what was suited to an industrial model required rethinking in a post-industrial world. So in 2003, the company began a step-by-step process of doing just that. Starting with senior leaders, this effort ultimately wound up in the broadest arena available to IBMers — our global intranet — in the form of a pioneering experiment in collective self-definition called ValuesJam.

IBMers came together by the tens of thousands in a worldwide, 72-hour online discussion on what, at its core, IBM most essentially is. Senior management believed that the only meaningful way to shape values for a global on demand enterprise like IBM — with its population of independent, 21st-century knowledge workers — was to trust that population to shape those values itself. Thousands of comments posted by IBMers over the course of ValuesJam were analyzed and distilled into three values.

These values are serving today as a touchstone for reconsidering everything we do and how we do it. In an even more-heavily attended jam in 2004, more than 57,000 employees posted 32,000 ideas and comments on how our values can be applied to improve IBM’s operations, workforce policies and relationships. To date, 35 of the best ideas — as rated by IBMers themselves — are in various stages of implementation, with executive owners responsible to the chairman for their timely development and deployment.

Our value of “trust and personal responsibility in all relationships” led IBM to strengthen its relationship with our millions of owners by better aligning executive compensation policies with shareholder interests. We settled on a simple formula: Senior executives now benefit from their stock options only after shareholders realize a 10 percent gain.

We have reinvented the employee suggestion system for a more collaborative era, enabling and incenting employees to brainstorm online and work together to refine ideas for productivity improvements.

The relationship between first-line managers and employees is one of the linchpins in a values-based management system. IBM is developing an employee evaluation system to assess managers, and integrate those results with manager training and development.

Already in use in the United States and with global deployment underway, IBM’s new online Opportunity Marketplace will match any IBMer (or external candidate) who has the right expertise to new assignments as people and positions become available. Employees will be able to take charge of their own skills development, in their current jobs, to meet the emerging market needs that will shape future job opportunities.

IBM created the global Manager Values Fund to help its 21,000 first-line managers bring our values to life — and backed it with a commitment of more than $100 million. The fund authorizes each first-line manager to spend up to $5,000 annually for extraordinary situations involving clients or employees, or to fund a promising idea or innovation.

Since 2001, we have used our global intranet to bring IBMers together on an unprecedented scale. An IBM “jam,” most simply, is a massive online discussion that develops actions out of a multiplicity of perspectives and expertise. This large-scale combination of technology and workforce strategy elicits participation by tens of thousands of employees from every geographic region and every part of the business. Topics of broad importance to the entire company — from the role of the manager, to the future of business consulting, to living our values — are discussed by employees over a defined period — typically two or three days. People “meet” who never otherwise would. Subject-matter experts and moderators guide jammers to build on each other’s ideas, and text-analysis tools from IBM Research capture and play back key themes.

Because one goal of this organizational intervention is to develop actions and improvements in the business, the jam typically includes a rating phase, when participants assess the feasibility and potential impact of each idea. Those ratings, the theme analysis and qualitative research combine to produce action plans and insight into the IBM population’s perceptions and priorities.