Thomas J. Watson, Jr. (1914-1993) assumed control of International Business Machines (IBM) from his father in 1956. Under his leadership, IBM entered the computer market, focusing on sales, service, and adaptation. He also changed IBM's management style and invested in new plants and laboratories. Toward the end of his life, Watson became involved in arms control and Soviet-U.S. relations, serving as the ambassador to the Soviet Union in 1979.
Thomas J. Watson, Jr
Thomas J. Watson, Jr. was born on January 14, 1914 to Thomas J. Watson, Sr. and Jeannette Watson, in Short Hills, New Jersey. The Watsons later had two daughters, Jane and Helen, and another son, Arthur. Thomas Watson, Sr. began managing the Computin g-Tabulating-Recording Company (CTR) in 1914. In the 1920s, Thomas Watson, Sr. became chief executive officer and renamed the company IBM.
Trouble at School
Thomas Watson, Jr. was a poor student and often in trouble. He embarrassed his father, a member of the school board, by putting skunk odor in the school's ventilating system, forcing the school to close for the day. Watson had trouble reading and had little self-confidence. The greatest moment of his childhood was when he flew in an airplane for the first time, at age ten, and saw his first film with sound, both on the same day. Although his father always told him he was free to choose any career, Thomas Watson, Sr. groomed his son from an early age to take over IBM, taking him to sales conventions, factories, and meetings.
Because his grades were poor, Watson needed his father's help getting into college. He attended Brown University, where he also received poor grades, but managed to graduate. In September of his freshman year, Watson learned to fly, gaining a great deal of self-confidence. Besides flying, Watson spent his time at college drinking and socializing. In his senior year, Watson decided that he wanted to work for IBM. He began as a sales trainee that fall, after spending the summer of 1937 traveling to Asia, Germany, and Russia.
Trained at IBM School
Watson began his sales training at IBM's school in Endicott, New York. The IBM school strove to inspire enthusiasm, loyalty, and high ideals in its trainees. Over the front door the motto "THINK" was written. Students and teachers alike wore the company "uniform," dark business suits with white shirts. When Watson went to a bar for a drink after school, the bartender asked "Doesn't your father have a big policy about liquor?" Watson recalled in his autobiography, Father, Son & Co. The policy applied to drinking on the job or on IBM property, but Watson felt Endicott was a rather unpleasant place, where he was singled out as the boss' son.
Watson spent most of his training time learning about IBM's punch card system, an automated accounting system. Although he did poorly in school, he graduated and was given a prime sales territory, the western half of Manhattan's financial district. He did very well, but felt it was because of who he was, not what he did. His three years in sales were full of self doubt. By 1940, Watson made some sales calls in the morning and spent the rest of the day flying airplanes. His evenings were spent drinking and dancing in nightclubs. His behavior caused a stir at IBM, but his father did not say much as Watson managed to stay out of the gossip columns.
Flew for His Country
In early 1940, war seemed inevitable. Watson knew he wanted to fly planes for his country, but wanted to avoid flight school and military discipline. He joined the National Guard and during the week "marked time" at IBM. On weekends he practiced flying with his squadron. In September 1940, the National Guard was mobilized, and Watson became a military pilot at Fort McClellan in Alabama.
After the bombing of Pearl Harbor, Watson married Olive Cawley, a model he had met in 1939. He was transferred to California, where his squadron flew along the coast, looking for Japanese submarines. He disliked his commander, and asked his father to help him. A week later Watson was transferred to the Command and General Staff School at Fort Leavenworth, Kansas. Watson became the aide-de-camp of Major General Follett Bradley. Together they traveled to Moscow where they set up the Alaska-Siberia ferry route to bring planes to the Soviets. Watson held other positions during the war, flying about 2,500 hours in five years.
In 1942, Olive gave birth to a baby boy, who died at the age of two months. In 1944, their son Tom was born. The couple also had five daughters.
After the war, Watson returned to IBM to work as the assistant to Charles Kirk, IBM's executive vice president. Watson became a vice president, one of only five, in 1946.By 1950, Watson and Al Williams were running the company, with Thomas Watson, Sr. occasionally making a major decision. In 1952, Watson became president; his father was chairman of the board. Four year later, he became the official head of IBM. One month later, his father died.
Watson's management style differed from his father's. Watson wanted managers to use their imaginations and to make decisions without always checking in with him. Although Watson could be harsh, he tried to loosen things up at IBM. Soft collars on shirts, rather than hard ones, were now allowed. IBM employees could have an occasional drink. Watson also decentralized the company's administration, encouraged more research and development, and increased the company's debt.
Watson saw that IBM's punch cards would need to be replaced by computers. The success of IBM's 604 Electronic Calculator convinced Watson that the field of electronics would be expanding rapidly, so he enlarged the company's research department. In six years, the company increased the number of engineers and technicians from 500 to over 4,000. In the early 1950s, Watson worried about the UNIVAC computer, produced by Remington Rand. He wanted to create a computer to compete with it. In 1953, IBM unveiled the 701, a computer for scientific use. The IBM 702, an accounting computer, was up and running by 1956. In 1954, the company started delivering a small business computer, the 650, which could perform complex accounting operations.
In the early 1960s, IBM began developing a new computer, the System/360. Development took longer and cost more than expected, with hundreds of computer programmers having to write millions of lines of code. The development of this software alone cost half a billion dollars. The new computers used integrated circuits, an innovation at the time. In 1964, Watson announced the System/360, even though it was not fully developed. By 1966, the System/360 was running with the long awaited software. System/360, a compatible multiple model system, was revolutionary. The feature of compatibility did not yet exist in computers. System/360 would allow any of the computers in this "family" to use the same software, disk drivers, and printers as any other computer in the family. A business could start with a small, inexpensive model and move up to bigger, more powerful ones by mixing and matching components from IBM's catalog.
In 1974, IBM's president, Frank Cary, set up a part of IBM called General Systems, to develop minicomputers. He established major research centers in San Jose, California and Boulder, Colorado. The San Jose center became known for its informality and unusual methods of problem solving. Watson approved of the innovations because he felt IBM needed change.
Chose Health over IBM
In 1952, the Antitrust Division of the Justice Department brought a restraint of trade case against IBM. Watson went over his father's head, allowing IBM's lawyers to settle the case by signing a consent decree in January 1956. In 1969, the Justice Department filed an antitrust complaint accusing IBM of monopolizing the computer industry. The government wanted IBM broken up. This was one of the biggest antitrust cases ever. The government felt that IBM's marketing tools were used to destroy their competition. Six months after the suit was filed, IBM gave up the marketing practice of bundling-selling everything a computer customer would need for one price. Instead, each component was sold separately. The government's case dragged on until 1981, when the Reagan administration finally dropped it.
Although Watson intended to retire from IBM in 1974, he had a heart attack in late 1970 that caused him to reconsider the decision. After he recovered, he decided that he wanted to live more than he wanted to run IBM. Thomas Learson assumed the chairmanship and Frank Cary took over as president and CEO. Watson remained as the head of the board's executive committee, where he could retain some control. During his time at IBM, Watson oversaw the remarkable growth of the company. In 1957, the company hit $1 billion in sales. When he resigned in 1971, the company had sales of $7.5 billion a year.
An Active Retirement
While still in the hospital, Watson began making plans for a new sailboat. When he recovered, Watson and his crew sailed around Newfoundland. In 1974, he made a major voyage off the coast of Greenland, over 500 miles above the Arctic Circle.
Because he was one of the few liberal businessmen of the times, Watson became involved with government during the Kennedy years. He served on several committees and commissions, including the Advisory Committee on Labor-Management Policy, which dealt with unemployment, and the Peace Corps steering committee. Watson and his wife attended many social events at the White House. President Johnson asked Watson to be his secretary of commerce, but Watson turned him down. In 1977, President Jimmy Carter asked Watson to chair the General Advisory Committee on Arms Control and Disarmament (GAC). This commission advised the president on nuclear strategy. In 1978, GAC reported to Carter that the MX missile should not be developed because it was impractical.
In 1979, Watson became the U.S. ambassador to Moscow. He felt like a pawn in U.S.-Soviet relations, which at that time were quite bad. The Soviet Union had invaded Afghanistan. In response, the U.S. ended grain sales and boycotted the Moscow Olympics. When Carter lost the election to Ronald Reagan, Watson's stint in diplomacy ended. He then founded the Center for Foreign Policy Development at Brown University.
On his return from his ambassadorship, Watson began speaking and writing about arms control. In 1987, he flew across the Soviet Union, retracing the route he took during WW II, when he helped set up the Alaska-Siberia ferry route to bring planes to the Soviets. In 1990, he published his autobiography.
For over three decades, Watson amassed one of the best scrimshaw collections in the country, including 200 intricately carved pieces, all made of whalebone by American whalers. The collection was kept in his home in Greenwich, Connecticut, and at his summer home on North Haven Island, Maine. Watson sailed and flew planes, helicopters, and stunt planes. He had a personal fleet that included a Lear jet, a Breezy, a Twin King Air, a Taylor Cub, and a Bell jet 206 helicopter. His favorite was his stunt plane, a high-tech model, weighing only 850 pounds. Watson perfected a stunt show featuring inward loops and upside down flying. He rode a motorcycle around the island, dodging mouflon sheep. He also tinkered with antique cars, and had four Ford Model T automobiles. He kept them on the island to teach his grandchildren how to drive. Watson died of complications following a stroke on December 31, 1993 in Greenwich, Connecticut.
Further Reading on Thomas J. Watson, Jr
Rodgers, William, Think: A Biography of the Watsons and IBM, Stein and Day, 1969.
Sobel, Robert, IBM: Colossus in Transition, Times Books, 1981.
Watson, Thomas J., Jr. and Peter Petre, Father, Son & Co.: My Life at IBM and Beyond, New York, Bantam Books, 1990.
Business Month, August 1990.
Electronic News, January 10, 1994.
Forbes, September 17, 1990.