Friday, September 28, 2007
Thomas John Watson, Sr. (February 17, 1874 – June 19, 1956) was the president of International Business Machines (IBM), who oversaw that company's growth into an international force from the 1920s to the 1950s. Watson developed IBM's effective management style and turned it into one of the most effective selling organizations yet seen, based largely around punched card tabulating machines. A leading self-made industrialist, he was one of the richest men of his time and was called the world's greatest salesman when he died in 1956.
Early life and career
Watson had a newly acquired NCR cash register in his butcher shop, for which he had to arrange new repayments. On visiting NCR he determined to join the company; and after a number of abortive attempts he finally succeeded. Led by John Patterson, NCR was then one of the leading selling organizations, and John J. Range, its Buffalo branch manager, became almost a father figure for Watson and was a model for his sales and management style. Certainly in later years, in a 1952 interview, he claimed he learned more from Range than anyone else. But at first he was a poor salesman, until Range took him personally in hand. Then he became the most successful salesman in the East, earning $100 per week. In 1899, at the age of 25, Watson was rewarded with the NCR agency for Rochester, one of NCR's smaller branches. As an agent he got 35% commission. As a result of these techniques, which largely revolved around knocking the main competitor (Hallwood), in four years Watson made Rochester effectively an NCR monopoly. As a reward he was called to the NCR head office in Dayton, Ohio, U.S..
Watson's role in the scheme of things then was to knock out the competition in the used cash register market. It was made less legal by the chosen means. Using funds allegedly supplied by NCR he set up what was ostensibly a completely independent organization, Watson's Cash Register and Second Hand Exchange, in Manhattan. Undercutting the competition, for he had no need to make a profit (having effectively limitless funds from NCR), he gradually monopolized the business; until he was able to buy out the competitors, which he promptly did. He then moved on to Philadelphia and after that progressed across the country, repeating the operation and covertly establishing another near monopoly for NCR, in the second-hand business, to match that already established in the new machine market.
In 1908, when the second-hand business was merged into the regular sales offices, Watson became assistant sales manager; moving up to become sales manager in 1910 with a further role - working along with NCR's engineers - in new product development.
In terms of the questionable second-hand business, Watson later claimed that he didn't appreciate the implications of what he was doing, and indeed it is quite possible that he was so immersed in the work that he failed to understand the full depth of Patterson's machinations. Nevertheless it was a clear, indeed blatant, breach of the anti‑trust legislation; though until that time such legislation had, in the spirit of the age, been more honored in the breach rather than by adherence. Perhaps he was unlucky, but along with 30 other NCR managers (including Patterson) on 22nd February 1912 he was indicted in an anti‑trust suit instigated by managers previously.
In the six months before his trial he met his wife to be, Jeanette Kittredge. He married her just two weeks after the trial finished on February 13th 1913; he having been found guilty and sentenced to a $5,000 fine plus a year in Miami County jail. The jail sentence was unexpected, previously only fines had been imposed; and the sentence was appealed.
Watson joined the Computing Tabulating Recording Corporation (CTR) on May 1, 1914. When Watson took over as general manager, the company had fewer than 400 employees. In 1924, he renamed the company International Business Machines. Watson built IBM into such a powerful force that the federal government filed a civil antitrust suit against them in 1952. IBM owned and leased more than 90 percent of all tabulating machines in the United States at the time.
Throughout his life, Watson maintained a deep interest in international relations. He was known as President Roosevelt's un-official Ambassador in NY and often entertained foreign statesman. In 1937 he was elected president of the International Chamber of Commerce (ICC) and at that years biennial congress in Berlin stated the conference keynote to be World Peace Through World Trade. Watson has been one of the few CEO's to develop such a policy.
Watson worked with other local leaders to create a college in the Binghamton area, where IBM had major plants. In 1946 IBM provided land and funding for Triple Cities College, an extension of Syracuse University. Eventually it became part of Binghamton University. Its School of Engineering and Applied Sciences is named the Thomas J. Watson School of Engineering and Applied Sciences.
Watson was named chairman emeritus of IBM in 1956. A month before his death, Watson handed over the reins of the company to his oldest son, Thomas J. Watson, Jr.
Head of IBM
Watson married Jeanette Kittredge, from a prominent Dayton, Ohio railroad family, on April 17, 1913. They had two sons and two daughters.
As a Democrat (after his criminal indictment by the Taft Administration) Watson was an ardent supporter of Roosevelt. He was considered Roosevelt's strongest supporter in the business community.
The US Supreme Court, in 1936, upheld the lower court decision that IBM, together with Remington, should cease its practice of requiring its customers to buy their cards from it alone. In the event it made little difference because IBM was the only effective supplier to the market; and profits continued undiminished.
As a powerful trustee of Columbia University (June 6 1933–death) Watson played the central role in convincing Dwight D. Eisenhower to become president of the school.
Was Chairman of the Elmira College Centennial Committee in 1955 and gave Watson Hall, primarily a music and mathematics academic building.
Thomas J. Watson, Jr., succeeded his father as IBM chairman and later served as Ambassador to the Soviet Union under Jimmy Carter.
Jeanette Watson Irwin married businessman John N. Irwin, later Ambassador to France
Helen Watson Buckner became an important philanthropist in New York City.
Arthur K. Watson served as president of IBM World Trade Corporation and later as Ambassador to France. Famous quote
Watson, Thomas J. (1934). Men-Minutes-Money A collection of excerpts from talks and messages delivered and written at various times. International Business Machines.
Watson, Thomas J. (1954). As a Man Thinks...: the Man and His Philosophy of Life as Expressed in His Editorials. International Business Machines.
Maney, Kevin (2003). The Maverick and His Machine: Thomas Watson, Sr. and the Making of IBM. John Wiley & Sons. ISBN 0-471-41463-8 .
William H. Rodgers. Think; A Biography of the Watsons and IBM (1969).
Robert Sobel Thomas Watson, Sr.: IBM and the Computer Revolution (1981).
Richard S. Tedlow. The Watson Dynasty: The Fiery Reign and Troubled Legacy of IBM's Founding Father and Son. (2003)
Thomas J. Watson. Father, Son & Co.: My Life at IBM and Beyond. (1990)
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