(FORTUNE Magazine) – He dissolved a clubby 92-year-old executive-management committee, asked the board to cut his bonus and redistribute the money to others, and reached far down the organizational chart for fresh ideas. That might sound like a corporate fairy tale, but in fact it's a few pages out of the first chapter in Sam Palmisano's tenure as CEO of the $81 billion behemoth. The 30-year company vet--who took the reins early last year--isn't resting on predecessor Lou Gerstner's laurels. Instead, he thrives on shaking things up. Palmisano, 52, has snatched up PricewaterhouseCoopers' consulting arm for $3.5 billion, helping shift Big Blue's focus from selling hardware and software to selling IT and consulting services. He has also promised to revolutionize the IT world with "on-demand" technology. If only sales and stock performance were better. --J.S.