Father, Son & Co.

by Thomas J. Watson

  They were modeled after Roosevelt’s fireside chats. Because IBM was so big that it was impractical to gather everybody together in a single place, Dad arranged for the telephone company to put a microphone on his desk and hook it up so that he could be heard simultaneously over the public address systems of the factories in Poughkeepsie and Endicott and in several large offices. He was very good at these speeches. He’d start by saying, “The war is over and you’ve supported the company very loyally during the war.” Then he’d review the success of the business, thank the employees for their efforts, and remind them of the benefits IBM already offered. He’d talk about intangible things that made IBM a good place to work, like the right of any man to appeal to Dad personally if he thought he was being unfairly treated. Finally he’d announce a new plan to cover sickness and accident, hospitalization, disability, or whatever. When he announced the new IBM pension plan, Dad wrapped up his speech by saying that IBM’s “constant purpose” was to relieve its people of “fear for the care of themselves and their families.” Roosevelt himself couldn’t have said it better. Underneath all the old-fashioned folderol, the IBM of 1947 was amazingly up-to-date.

  I discovered that Dad had his finger in everything at IBM. A phenomenal number of executives—at one point I counted thirty-eight or forty—reported to my father directly. All these individuals had titles, some high and some low, but such distinctions didn’t matter because they all reported to him. People were constantly waiting outside his door, sometimes for as long as a week or two before they could see him. He saw the important ones, of course, but when I complained about people wasting time in his anteroom, he said, “Oh Tom, let them wait. They’re well paid.”

  We had no organization chart because Dad didn’t want people to be so focused on specific jobs that they concentrated only on those jobs. He loved to tell the story of visiting a friend from the Cash who had gone to work at an automobile company. At the man’s office there were organization charts everywhere. Each employee had one over his desk, along with a small framed job description spelling out what that individual was specifically responsible for. “It was the worst thing I ever saw,” Dad would say. “It was so restricting!” He wanted everybody to be interested in everything. It wasn’t unusual for Dad to call a sales manager to do a factory job or a factory manager to do a sales job, and he would demand answers and opinions and judgments on any segment of the business. Obviously IBM was becoming too big for that to be entirely practical. But it was his way of stretching each man and making him think about the business as a whole.

  I was fascinated by the routine he followed on ordinary business days. He never came to the office without having in mind four or five things he wanted to get done. He might have thought these things up the night before, or while he was shaving in the morning, or maybe he’d talked with somebody at dinner and a casual remark had reminded him of something. But when he hit the office, he knew what he wanted to accomplish. He’d sit down at his desk and then, for item A on his list, he would pick an executive. It wasn’t necessarily the guy you’d think would get the job, but the one he felt was the right man to do it that day. Dad would buzz and the man would come in and Dad would give him the word. For some things he might call several men and then there would be a meeting. But in the course of the day he’d clear those four or five items out of his mind.

  If he got everything launched before lunchtime, after lunch he’d sit in his office and call in a few more men at random. He’d think, “Well, I haven’t shaken up So-and-so for a while. So I’ll get him in and ask some questions about his department and in the process part his hair a little. He’ll get a pat on the back if I find something good or a kick in the tail if I find something bad.” In the course of a month, he’d have seen nearly every one of the thirty-eight people reporting to him. He dealt out kicks in the pants and pats on the back in about equal proportion.

  Dad used to badger the financial men mercilessly. Even though our business was to sell accounting equipment, Dad didn’t particularly trust numbers. He thought they could distract a businessman from the real issues at hand. Our controller in those days was a contemporary of mine named Al Williams, who soon became my best friend and eventually rose to be president of IBM. He was extremely talented, but that never stopped Dad from giving him hell. Al had a little loose-leaf book where he’d write, in very fine print, the basic figures of the business. Father would look at that book and say, only half jokingly, “This fellow Williams can’t keep anything in his head. He has to go to that little book.” Of course, the kinds of questions Dad asked were so arbitrary that you’d need twenty books to answer them. He’d say, “Now, Williams, how did we do last year in Peru?”

  Williams would say, “I’ll have to find that out. Our subsidiary in Peru is very small. I just don’t know how we did.”

  “Never mind. Let’s take a bigger company. Let’s take Brazil. We do a nice business in Brazil, don’t we?”

  Williams would go back to his office and call together his assistants. These were old professionals who really knew the business. He’d say, “Let’s add a section to my book here that will give the status of each of our foreign subsidiaries.” We were operating in almost eighty countries, so that would mean several new pages, all written very small. But the next time Al and Dad met, Dad would be on a different track. “Mr. Williams, how about platinum? Do we use any platinum? I notice it is going up quite a little. You ought to have those figures!” That little notebook eventually grew to four hundred pages—it was so fat Al couldn’t get it into his pocket. He always perspired easily, but in my father’s office Al’s palms would get so wet that he needed a handkerchief to turn the doorknob when it was time to leave.

  Like Williams, some of the men on the receiving end of Dad’s kicks and pats were very able executives. Dad would often be on the road or be busy with outside commitments, so that for weeks at a stretch, IBM would run itself, which is to say that the vice presidents and department heads would make the necessary decisions and do the work. Yet with the exception of Al and one or two others, it was rare for these men to speak their minds when Dad was around. The longer I worked at IBM, the more I became convinced that my father’s style silenced too many people.

  Dad never formally tried to teach me about business. When I spent time with him I almost always picked up something, but it would never have worked for me to pull up my chair alongside his desk as I had with Kirk, because it didn’t take much to get us into a tangle. Generally I stayed in my own office on the sixteenth floor of our Madison Avenue headquarters, and if he wanted me, he’d call. His office was one floor up, on the seventeenth floor; there was a buzzer near my desk and a stairway outside my door. Dad was totally unpredictable. When that buzzer sounded I never knew whether he was going to bring me up there and say, “Son, I want you to meet Mr. Alfred P. Sloan,” or “Tom, I’m really dissatisfied with the way things are going west of the Mississippi.”

  His method was to give me more and more latitude in making my own decisions, and at the same time to make me fight on anything that required his approval. I’d have to go up to his office and do a sales pitch, and more often than not, we’d end up in an argument. I knew that he was trying to test me, temper me, and expose me to the thinking processes that had made him so successful. That didn’t make his methods any easier to take: he would second-guess virtually anything I did. Sometimes I’d get the feeling that no detail of my work was too tiny to escape his notice. For example, when I’d first moved out of Kirk’s office a pretty secretary named Claudia Pequin was assigned to me. One evening when we were working late, Father came to the door of my office and knocked. The room was overheated and we’d been in there a while, so he must have gotten hit with a blast of perfume when I opened the door. He let several days go by—he would often let time pass for the sake of drama—and then one day he said, “You know, Tom, there is an unusual relationship between a man and his secretary. I’ve always had male secretaries. Now, I don�
�t mean to suggest that you are doing anything wrong, but in the course of business you end up having to travel with your secretary, for example, and the look of it might be misinterpreted.” By coincidence Miss Pequin left IBM to go to McGill University not long afterward. I saw to it that the next secretary assigned to me was male.

  Dad was teaching me but he wasn’t ready to promote me yet. He took Kirk’s job and gave it to George Phillips—old George Phillips who had been my babysitter and taught me to shoot. At first I didn’t mind, because Phillips, though thoroughly devoted to Dad, was no operating man, and with him in the job, the organization got used to the fact that I was probably going to move up. But I’d have Phillips all lined up in total agreement with something I wanted to do, and then we’d go into Dad’s office. If Dad didn’t agree, he’d treat Phillips just the way he used to when Phillips was only his secretary: “Phillips! How could you possibly say yes to that? You know that isn’t right!” Phillips would instantly reverse himself—at such moments there was no way to persuade him that Dad wasn’t infallible—and I’d be back where I started.

  I was in a pell-mell rush to make a success of myself, and pretty quickly I took over the role of vice president of sales, even though someone else normally performed that function. It didn’t surprise anybody who knew the other fellow that I could do this. He was a nice man, but shy and weak, and he tried to conceal it by buttering up my father and being pompous. He was the first Harvard graduate IBM ever had. Dad had hired him because he was the son of one of Dad’s friends in Short Hills, and he thought the man raised IBM’s image so much that he eventually put him on the board. But all the other executives knew that the fellow never really pitched in.

  It seemed perfectly natural for me to get involved in the sales force, because that was the area that meant most to Dad. I went on the road as Dad had always gone on the road, spending long weeks inspecting offices, calling on customers, and praising and encouraging the men. Our great expansion meant that there were hundreds of mundane problems to solve. I remember taking a trip with Phillips in the Midwest, and going to inspect the struggling little office we had in Pierre, South Dakota. This was one of the offices we’d opened after Dad decided we should be represented in every state capital. Pierre itself was a tiny place—we spent a morning shooting ring-necked pheasants in a field no more than three miles from the center of town. Dad’s idea for making small offices like this succeed was to install “three-way men” who sold products from all three of our divisions: time clocks, tabulating machines, and typewriters. But the office was losing money and I saw that three-way men would never work—the products were too diverse for most salesmen to span. I complained about this to Phillips, but then decided not to make any further fuss. It was better for Dad to open a few offices he might later have to close than never to open any new ones at all.

  One change I did push through was designating liaison men to serve as Mr. IBM in cities where we had multiple operations. In places like Chicago we’d have one office selling to banks, one to government agencies, one to small businesses and so on. That helped hone our sales pitches, but it made for labor problems because there was no coordination on things as basic as salaries. There would be two or three IBM offices in a building, and when typists met each other on the elevator they’d talk and find out they were making different wages in the different offices. The liaison men, usually older managers who wanted to slow down a bit, helped iron out these discrepancies.

  The part of my work that I loved best was picking and choosing men. In the maelstrom of postwar activity promotions came very rapidly. We were constantly naming new branch and district managers, assistant managers, and so forth. Many of these jobs went to young men just back from the war, and the average age of IBM officials quickly dropped below forty. I was very outspoken about who should get promoted, and I never doubted my ability to make personnel decisions fast and make most of them right. I never felt too sure of my intellectual depth, but I knew I had a lot of common sense. When I found people who I thought could contribute a lot to the business, I would prod them along. I did this with a self-confidence that surprised people who knew what I’d been like before I came under General Bradley’s influence. I’m sure one of those taken aback was Vin Learson, who eventually succeeded me as IBM’s chairman. Vin was still just a branch manager in 1947, in charge of our Philadelphia office. But he was a man of great force with a superior record, and I was planning to promote him. Then I got a letter from a man complaining that he had rented a house from Learson, and now Learson was suing him. They were fighting over the cost of repairing damage from a broken water pipe, or some such problem. So I called Learson in. I handed him the letter and said, “Get your sights up. You are tremendously able and you are going to the top of this business. Don’t mess around with petty little things where everybody is going to know you’re in a lawsuit for two thousand bucks.” Learson just nodded. The lawsuit never came up again and he was put in charge of a sales district the following year.

  I remember the first time I ever fought to keep a man from quitting. It was Kirk’s pal Birkenstock, the one Dad had promoted over so many other men. He came to see me soon after Kirk’s death, and things weren’t going well for him at all. He hadn’t been able to handle the job of general sales manager, and even before Kirk died he had been demoted to running a market research department called Future Demands. He knew Kirk and I had been rivals, and I’m sure he expected me to do him in. But I actually thought he had a lot going for him. He was even smarter than Kirk, more attuned to the outside world, and could think down into the depths of things. I would have told him so if he’d let me. But the minute he got into my office he made noises like, “There’s nothing much left for me, I’ve lost my job as general sales manager, all I’m doing now is make-work.…”

  I didn’t like his tone, so I forgot about giving compliments. I said, “You must not have much confidence in yourself. So you had a big mentor, and if he had lived you’d have had an easier time. But all of a sudden, he’s not there. Do you want people to think you’ve lost your nerve? If you’re any good, you can make it with me, with T.J., with anybody, not just Kirk! Now, if you think I’m not fair-minded, you ought to quit. But otherwise you ought to stay, because this is where the opportunities are.” He said, “Do you mean I can stay and not be under a cloud?”

  If a man wasn’t willing to stand up for himself, I didn’t want to work with him, and I didn’t think he should be in the company. I hated the atmosphere of adulation Dad had surrounded himself with. He had people hanging on his every word as if he were the Messiah. I thought the executives at IBM were stunted because of it: the higher a man rose, the less opportunity he had to use his common sense. From my days as a salesman I had a pretty good idea who Dad’s yes-men were, and I’d pick on these guys at the slightest provocation.

  I was right most of the time, but occasionally I was wrong as hell. I made a terrible mistake early in 1948, for example. Dad was after me because he thought IBM repairmen were spending too much time on what we called “inspections.” This meant checking machines in the field even if they were running just fine. Today it would be known as preventive maintenance and I was for it; but Dad thought of it as “fixing things that weren’t broken,” and we had some pretty hot words on the subject. Dad then decided to seek the opinion of J. J. Kenney, who was in charge of sales promotion. Poor Jack Kenney didn’t know the first thing about repairmen, and he was the type of guy who was so awkward with tools that he probably would have had trouble putting in a screw straight. But he’d worked around Dad a long time, and I figured Kenney would automatically agree that inspections should be cut. I was waiting for him near his office as soon as he came back from talking to Dad.

  “Tell me,” I said, “did the subject of inspections come up?”

  When he said it had, I blew up. I accused him of yessing the old man. I was in such a state that I almost called him a coward, except that he quit first and walked out. I knew I’
d gone too far—Kenney was a superior man who had started as an office boy and worked his way up, and Father would be furious if we lost him. To make matters worse, I found out later that day that Kenney hadn’t yessed Dad at all. On the contrary, he’d gone into Dad’s office carrying an automobile owner’s manual, and used it to point out that cars needed periodic maintenance even though they were much less complicated than IBM machines, so presumably IBM machines needed it too. I really panicked. The next morning I had a man waiting for Kenney on the train platform to ask him to reconsider, and when he came into the office I went straight to him. He listened to me apologize and beg for two hours until finally he was pretty sure he’d taught me a lesson. Then he agreed to stay.

  I’d have made more mistakes like this if it hadn’t been for the good advice of an executive named Red LaMotte, whom I’d known from boyhood. There weren’t many old-timers left who were bold enough to speak their minds but LaMotte was fearless. He was best known within IBM for having landed the massive Social Security contract in the thirties, but I thought of him as the only man who had ever done to my father what J. J. Kenney had just done to me. It happened back in the 1920s. Dad had been letting LaMotte have it for not making a sale. Finally Red said, in a rather dignified way, “Mr. Watson, I don’t really think we can continue to do business together. Thanks a lot.” And he went home to Gramercy Park, where he and his wife had a lovely apartment. Within a few hours Dad was there rapping at the door. Red and his wife politely took Dad’s coat and his derby and sat him down, acting as though they had no idea why he’d come. With LaMotte sitting right in the room, Dad turned to his wife and said, “Lois, I’ve made a great mistake and I need your help. Red is one of the people I count on to move IBM ahead. He has resigned, and I’m here to apologize and make sure I’ll have him back with me.” Dad was too proud to say “I’m sorry” directly, but Red gracefully accepted the apology anyway. LaMotte was an able guy in his own right, but it didn’t hurt that his wife was the daughter of one of IBM’s directors. Of all the people at IBM, he was perhaps the only one who moved in the same social world as Dad. He came from a genteel family, rode to the hounds, went to the opera, and belonged to many of the same clubs as T.J. I think Dad was always a little resentful of him. After their reconciliation they agreed that Red should run the Washington office, which enabled him and Dad to give each other a wide berth. He knew everybody at IBM, young and old, and had a humane and balanced view of character that was tremendously helpful to me.