Before long IBM school felt even worse to me than Carteret or Hun or Brown. Not only was my performance poor, as usual, but I couldn’t escape being seen as T. J.’s son. Everyone in the school was trying to guess what Dad wanted done with me—without any regard for what I wanted myself. The head of the school, Garland Briggs, had been headmaster of the Hun School when I was there. Dad had picked him, in his simplistic way, because he needed an educator and Briggs was one he knew. I always thought Briggs was way out of his depth in that job. He had the big idea that it would please Dad if I were elected class president. So he put the other students up to it, even though they all knew I needed tutoring to get by. Unfortunately for me, I lacked the force of character to say, “I won’t have this.”
Endicott seemed more and more bleak. The place didn’t offer much in the way of fun, and even if it had, I felt obliged to behave soberly and responsibly. Usually I ate with my classmates at the hotel; if we went out it cost money, and most of them were poor. Besides, there was no place to go. Endicott’s restaurants were working-class Italian places, and the food they served always gave me heartburn. Once in a while I’d talk some of the Scandinavians in the class into going skiing for a weekend, but the local slopes weren’t very good. Soon I’d be back in my room at the Frederick trying to focus on some big black textbook with a title like Machine Methods of Accounting.
I complained constantly to my college friends outside the IBM school, and Nick Lunken, one of my fraternity brothers, decided I was a sitting duck for a practical joke. He called up one day and said he wanted to fly to Endicott to see me. I was delighted. He said, “If you have any friends in class who might like to have a ride in my airplane, bring them along.” So I got the vice president of the class and the treasurer, both of whom were trying hard to make their way in IBM. Nick was a little late, and we waited at the Endicott airport, which is very small. Finally a red plane landed and I could see Nick in the cabin with a huge grin on his face. The door opened and out came a pair of silk legs—really good legs. They looked to me like they were about four yards long. Then the rest of the woman came out, and she was very hot-looking. To this day I don’t know how Nick set it up. The woman hopped down and made a beeline for the side of the field, where a kid was standing with a horse. The door of the plane opened again and a racetrack tout came out, a guy in a long blue double-breasted chesterfield coat and black derby. He had a bottle of Scotch in his hand, and my two classmates began backing away from the scene. The woman got on the horse and started galloping around with her skirts up to her hips. Finally Nick stepped out of the plane.
I said, “For God’s sake, Nick, what is this?”
“I knew you’d want to meet Grandmother Verne,” he said. “She’ll get off that horse in a minute, but she’s very fond of horses. And this fellow’s here in case you want to lay a bet.”
I didn’t know anything about horse racing. But by then the other two officers of my class were disappearing around the airport building. They didn’t want to be connected with whatever terrible thing was going on. I bought Nick and his friends lunch at a hot-dog stand, and it seemed like hours before I could get rid of them. Finally I stood watching the plane disappear, and went resignedly back to my schoolbooks.
About once a month, Dad would show up. The local managers would get tense, because Dad was great at spotting something wrong that no one else had thought of and blowing up about it. No matter what aspect of the business he examined, he insisted on having a hand in the details and was always bristling with ideas and questions, forcing people to be on their toes. Often he gave orders without warning and it could happen at any hour, which meant that managers didn’t dare leave their offices or their houses when he was in town. Dad’s unpredictability would sometimes produce odd behavior in people. Garland Briggs, for example, tied himself in knots over whether to leave me at my studies or order me down to the train station to greet my father. Generally I took it upon myself to be there, standing dutifully on that cold platform as the train pulled in, shooting steam.
Dad’s favorite spot in Endicott was the IBM Homestead. This was a square old lovely Italian-style house with dark green tiles that originally belonged to the town’s founder. Dad had added a long wing with forty room-and-bath cubicles for guests, and that was where customers would come for one-week courses on how to use punch-card machines. The master suite was always reserved for Dad. From his window he could look out and see it all—the IBM golf courses, the shooting ranges, the country club, and the factory buildings down below. He would inspect the factory during the day—walking through the plant, putting his foot up on the stool of a guy at a drill press, and getting into a conversation that would sometimes last half an hour. Then he’d come out and bark orders to his secretaries based on what he’d heard. Dad was always alert to what the factory man needed. In 1934, after one of these tours, Dad overruled his factory managers and abolished piecework, saying it distracted people from producing high-quality goods.
At night Dad would go into the Homestead dining room, sit down next to some customer—they all wore badges that said who they were—and start a conversation. When dinner ended more people would draw up to the table and he might have fifteen or twenty to talk to. It was easy to see he was a great salesman. His words would come out in a dignified way, he’d make a few simple gestures, and whether they agreed with him or not, people would listen. After a while he’d say, “Gentlemen, let’s go into the living room and continue this conversation.” He’d talk until one or two in the morning. It was all right for him, but terrible for me if I was there. I was usually bored but I always had to stay to the end because he would feel hurt if I walked out.
There was no better way to learn about IBM than to be present when Dad visited a class. Some of the things he said didn’t mean much; he sermonized a lot about self-improvement, as in his letters to me at Brown. But he also told stories to illustrate his management principles. The most important story involved how he learned to sell cash registers. Dad got hired as a salesman for the Cash in Buffalo, New York, in 1896. During his first couple of weeks he failed to close a single sale. Finally he reported this to the branch manager, a tough old-timer named Jack Range, who blew up. He lit into Dad so hard that Dad used to say he was just waiting for the tirade to die down so he could quit. But when Range decided he had pushed my father as far as he could, he suddenly turned friendly. He reassured Dad and offered to help him sell some cash registers. He told Dad, “I’ll go out with you, and if we fall down, we’ll fall down together.” They loaded a big, fancy machine onto the wagon and sold it that same day. Range showed my father how to hit the right notes in talking to businessmen and how to improvise on the canned sales pitch that Patterson required all his salesmen to use. Range let my father watch him close several more sales, until finally Dad caught on.
My father carried that lesson in his bones. He wanted his managers to be on sales calls with a guy three or four times before labeling the man a failure. And he believed that each employee was entitled to help from those above. He would say “A manager is an assistant to his men.” That personal relationship between the individual and the supervisor became the IBM equivalent of the social contract.
I never disagreed with those lessons Dad taught, but I’d heard them all a hundred times before. Generally I tried to keep my distance during his visits. Although he never said anything about it, I was sure he was unhappy that I wasn’t earning top grades. All the same I persevered, and finally school was done. As a sort of graduation, the whole class went to Manhattan to attend the Hundred Percent Club. This was IBM’s annual sales convention, one of the morale-building techniques Dad had learned from Patterson. Hundreds of IBM men who had made their quotas were brought to New York, at company expense, for a huge banquet at the Waldorf. There were songs and awards and testimonials as each salesman stood at the podium and said a few words. It went on for hours. At the end I had to give a little speech. On behalf of the new graduates I gave my fa
ther a book of yachting prints, and he and I were presented to the audience as the newest members of the IBM Father-Son Club. This was something Dad had founded back in the 1920s, on the firm belief that nepotism was good for the business.
Fresh out of sales school, I was handed one of the company’s prime territories in Manhattan—the western half of the financial district, including part of Wall Street. People eager to curry favor with Dad were constantly tossing business my way. I sold plenty of accounting machines and always beat my quota, but I got more and more depressed. At one point I made a feeble protest to one of my father’s top men. He said, “Oh, go on, young man. We help all of our salesmen. You’re doing a great job, and ninety-nine percent of what’s happened is yours anyway.” My three years as an IBM salesman were a time of sickening self-doubt.
I lived with my parents during this entire period, in their beautiful townhouse at 4 East Seventy-fifth Street. Every morning I would walk to IBM headquarters on Madison Avenue and punch in—IBM made time clocks, so everybody including Dad punched in. Then I’d go downstairs and have coffee at Halper’s, the drugstore on the corner. A lot of the young people did that; once in a while, my father would walk in and the place would clear out. I got along with my colleagues well enough—mainly because I think they expected worse when they heard the boss’s son was coming. I even made a few friends. But I was far from the image of a successful salesman. When I went to meet customers, I was bashful and not sure of myself at all.
My very first sales call was at a tall old office building on Broadway next to Trinity Church. I was supposed to be prospecting, calling cold, and I stood in the lobby looking at the directory and wondering where to start. In my hand I had a printout showing the calls that had already been made at that address. There had been very few. Suddenly on the directory I noticed the Maltine Company. I recognized the name because I knew one of their products: cod liver oil spun up with a grain derivative and given to children as a tonic. It came in a brown bottle with a wide neck so you could get a big spoon into it. The stuff had the consistency of honey, and it tasted very good.
I went up the elevator to the Maltine Company. Inside the front door of the office was a low oak fence with a gate, and a receptionist sat on the other side. I said, “I’m Thomas Watson. I’m a sales representative from the International Business Machines Corporation, and I wonder if I could see your chief financial officer to talk about punch-card accounting.”
“I’m sure you can’t,” she said. “We’re very busy here today.”
“Would you mind just presenting my card to that individual? If he can’t see me today I’d be glad to come back some other time.”
She took the card, and when she came back she said, “Come right in, young man.” I was thrilled. I walked right into this executive’s office and he got up from his desk and shook hands. He said, “It’s nice of you to call.”
“Well, sir, I like Maltine tonic,” I said. “I used to take it as a kid, and my mother set great store by it. I’m a new salesman and I was looking at the register and thought I should start with a familiar name. And that’s why I’m here.”
“Are you the son of Thomas Watson, the head of your company?” he asked. I said I was. “Let me tell you a little story,” he said. “I had a friend with his own business, and he brought his son into the business with him. This son liked to live pretty high on the hog and he didn’t really want to work. Finally he became a drunk and the father had to fire him.”
I heard him out and said, “Thank you for telling me that. I will give it some thought. But now I’d like to tell you about the punch-card method of accounting.”
He said, “Aw, hell, I’m not interested in that. I just heard you were T. J. Watson’s son and I thought you ought to know that a lot of people in your shoes fail. So nice to meet you, Mr. Watson.” And he showed me the door. I was tempted to abandon my IBM career on the spot. I had no idea why the man had made those remarks, and when I told my father about the incident, he couldn’t explain it either. He simply said I’d had a very sorry first call.
My luck improved somewhat after that. When I could catch a prospect’s interest, I found selling very exciting. The first thing we always tried to do was bring the prospect to a demonstration. Then we’d ask if we could make a survey of his business. That meant going into his office and figuring out how to apply punch cards to his bookkeeping. We’d look for procedures that were easy to automate. Punch cards were especially good for handling billing, accounts receivable, and sales analysis, because they all depended on the same data. It was easy for us to show how the equipment used for doing those things would more than pay for itself.
The cheapest installation we had was something called the International 50. It included a card-sorter, a keypunch, and a non-printing tabulator, all for fifty bucks a month. We could tell the customer, “It’s fifty dollars a month and it’ll probably replace a girl. You’re paying the girl ninety dollars.” If that whetted the guy’s appetite, you could push him along and say, “For a couple hundred dollars, we can give you an installation that prints. That will do all your bills and checks for you and will cut labor costs even further.”
What made the job at IBM unusual was that we didn’t actually sell our punch-card machines. Most of what we called sales in IBM were really rentals. What we pitched was a complete service—the use of the equipment plus the continuing assistance of IBM’s staff. This way of doing business went back to Herman Hollerith, who came up with it out of pure pragmatism. His early machines broke down so often that people were reluctant to buy them; so Hollerith rented them out and promised to keep them in good shape. When Dad took over, he saw that here was something magic. The rental system required a big field force and large amounts of cash, but it made the business stable and essentially depression-proof. If you didn’t sell a single machine in a year but worked hard at pleasing the customers who already had installations, you would bring in the same income as the year before. The rental system was one of IBM’s greatest strengths.
All the equipment was on one-year leases, and signing the new lease gave us a pretext to call on the senior executives of the companies we sold to. We were always taught to aim high—in sales school they said, “Call where the decision is made! Call on the president!” Dad equipped us with plenty of tools for cultivating executives. Think magazine was the most unusual of these. It was a general-interest monthly magazine, very well put together, and the only way to tell it was from IBM was by reading the very small print at the bottom of the opening page. Every issue opened with an editorial on world progress, written by Dad. If a sales prospect was about to show you out, you might say, “Mr. Jones, I can see that you’re not very interested and these machines don’t fit everywhere. But while I’m here, let me give you a magazine that may interest you. This one, for instance, has speeches by Franklin Roosevelt and Tom Dewey, and an article by Lee De Forest, the inventor of the radio tube. I’d like to leave this with you, along with my card. If you like, you can have a subscription free. Just let me know and I will get you on the list.” Think was distributed to everybody who had an IBM machine. But it didn’t stop there. The press run was close to one hundred thousand, and we only had thirty-five hundred customers. Dad had copies sent to anybody whose goodwill might possibly help IBM, including high school teachers and ministers and rabbis in the areas where we did business, all college presidents, and all members of the House of Representatives and the Senate.
My father never praised me for my work as a salesman. It was so easy for him to deprive me of my self-confidence with just a word. We’d be having a casual conversation at home and he’d say, “What do you think of the new sales plan?” or “What do you think of Mr. Jones?” No matter how I responded, he’d listen for a minute and then come back with something terribly cutting like: “You know, you are really not experienced enough to have an opinion on Mr. Jones.” I think Father must have enjoyed these petty emotional exercises. Maybe he was trying to test me, but
it was a test no one could pass.
The better I got at selling, the less I worked. There was a salesman I knew, named Vic Middlefeldt, who liked to fly. We’d make a couple of calls in the morning and then drive out to the airport. The New York office manager was Lotti Lomax, a delightful lady I knew pretty well, and she covered for us. I’d tell her, “I’m going flying with Middlefeldt. If anyone wants to reach me, tell them I’m on a call and I’ll be home by six o’clock at my parents’ house.” I didn’t care what kind of impression my behavior was making. By 1940, I was spending half the days flying airplanes and half the nights in nightclubs.
My parents knew I was staying out late a lot and sometimes coming home with a few drinks in me, but they rarely said anything about it. I must have been in the Stork Club three or four nights a week, always with a girl and usually with a whole group of people. The Stork Club was one of the big cafe society nightclubs, El Morocco being the other. At the Stork Club a velvet rope separated the bar from the rest of the club. You’d go to the rope and ask for a table, and if you’d been spending as much money there as I had, you’d get shown to a good one right off the bat.
Father, Son & Co. Page 9
