Dad came back from that trip and sat down with me in October to tell me how he was going to divide up the world. World Trade—Dick’s company—would build and sell machines everywhere except the United States; IBM Domestic—my side-would be confined to the continental U.S., but as the parent company it would also handle aspects of the business like financing and research and development for all of IBM. For the time being Dad was going to add the chairmanship of World Trade to his usual duties, with a senior man named Harrison Chauncey as number two and Dick as a vice president—the same rank I had! I told Dad that splitting off World Trade was the worst idea I’d ever heard. I said darkly, “If you do this, you’ll live to regret it.”
He looked at me with total innocence and said, “Why do you object to this so much?”
There were a lot of plausible business arguments I could have used. But the question caught me so completely off guard that the only thing that came to mind was personal: “There’s no place for me to travel! I like to travel!”
That made my father smile. “Well,” he said, “I’ll tell you what. I’ll give you Alaska, Hawaii, and Puerto Rico, and you can travel there.”
I was so embarrassed that I agreed and left his office feeling totally stymied. Later that week he called me in, this time with Dick, to discuss the plan again. I started to present my business objections one at a time. Setting up World Trade would only multiply bureaucracy and expenses, I said; and I predicted that the minute World Trade was separate, it would start developing its own products, thereby wrecking IBM’s manufacturing efficiency. Dick took the diplomatic course of sitting by and not saying a word, but I sensed a rising tide of impatience in Dad. The objection that finally caused him to flash was my pressing him on who should get Canada. Our business there produced a big cash flow and I hated to lose it. There was no reason for giving Canada to World Trade except that they needed the cash more than we did. It was a real weak spot in Dad’s plan. I could see him bristle, and I really bored in. I said, “Anybody can see that Canada belongs with the domestic company! If World Trade can’t stand on its own without Canada, then you shouldn’t split it off at all.”
Dad rose up and thundered, “What are you trying to do, prevent your brother from having an opportunity?” Those words killed me. They set me up against my brother, who was right there. Dad would say that kind of thing without thinking, because he always aimed to win. He used the Marquis of Queensberry rules if he had time to think about them, but when he was in a corner, it didn’t matter what the rules were; he wanted to accomplish his purpose. There was really nothing more I could say. Dick and I rode down in the elevator with Dad and walked him outside to where he had a limousine waiting. He got in and rolled down the window and said, “Now remember, boys, stay together.” I was devastated. Dick and I went back upstairs and I tried to paper over the rift between us by saying I hadn’t meant anything personal. Having won his point, Dick was generous enough not to rub it in.
The old man went ahead and organized the IBM World Trade Company in early 1949, formally splitting it off as a wholly owned subsidiary a year later. Most of my fears turned out to be unfounded. World Trade did not drag IBM down. It capitalized on Europe’s economic recovery, financed itself through its own profits and foreign borrowings, and grew as fast as the American company. Dad did not insult me by giving Dick equal rank. He made Dick a vice president, sure enough, but he also gave me the big promotion I’d been working so hard to earn. In September of 1949 I became executive vice president, the job Kirk had when he died. I didn’t even lose my dreamed-of chance to travel in Europe. Since the U.S. Army stayed there in force, and its punch-card installations were the responsibility of the domestic IBM, there were ample opportunities for me to go around inspecting.
As my brother rose at World Trade, I made great efforts to stay out of his way and help in any manner I could. I bowed out of the International Chamber of Commerce, so he could take my place. I took him to a meeting of the American Society of Sales Executives and introduced him around. I avoided any discussions of European business or international affairs. Later on, when he needed executives who knew how to twist tails and produce results, I sent him some of my best men—most notably Gilbert Jones, my former executive assistant, whom Dick chose many years later as his successor as chairman of World Trade. I thought Dick was extraordinarily able, and in our off-hours we grew very close. We often took our wives and children on ski trips together, and Nancy and Olive became best friends.
None of this was enough to defuse the tension in our family. Dad remained suspicious that I was secretly out to undermine my brother, and Dick, taking his cues from Dad, played very close to the vest. He would discuss World Trade with Dad but never with me. The situation made it very difficult over the next few years for the three of us to do business. There were aspects of World Trade in which the domestic company had to be involved, since we were the parent—important matters like financing and product planning. But when Dad and Dick and I would meet to talk about IBM’s future, there was constant strife. Even the smallest difference of opinion between Dick and me would cause Dad to question my motives, and this in turn led to bitter fights—always between Dad and me, with Dick sitting silently by. Usually this happened behind closed doors, but at one point I blew up at them in public. We were at the Metropolitan Club, and Dad told me to keep my opinions on Europe to myself. I completely lost my temper, told them that one business could not have two heads, and swearing loudly at both my father and Dick, I stormed out. I don’t remember the details, but I remember the outcome, because I thought it was the end of my IBM career.
I spent the night paralyzed with remorse for my outburst. The next morning Dad buzzed me up to his office. “Young man,” he said, “if you fail in IBM or in life, it will be because your temper did you in.” He dismissed me without letting me say a word. That was just as well, because too much was at stake. We were right on the brink of estrangement—both of us felt it—and neither of us wanted to jump over the edge. Dad came very close to firing me. Many years later, after his death, I found a note he had drafted at the time. It was written in pencil on the back of a luncheon menu, and it said:
I gave a great deal of thought to this relationship between Dick and you and came to the decision that if the past differences were to continue, you and he must part. I am writing this as I want you to have plenty of time to look about.
Fortunately he never sent it. I’d have felt shattered, but the immediate consequence would have been to escalate the fight. I’d have gone to him and said, “You’re threatening me. Let’s get this out on the table right now.” I was very peppery with him, and I’ve often wondered whether I behaved that way because of courage or because I thought I had power over him as his firstborn. I never could decide which. But Dad knew it was much more effective to let me stew in guilt. The more I thought about my outburst, the more miserable I felt.
The only way to be sure of ending one of our battles was to write. I have quite a collection of the apologies I sent him during the years after the war. Following the incident at the Metropolitan Club, I wrote him this:
Dear Dad,
I have given a great deal of thought to what you said about my temper and believe that you have put your finger on the one thing which can bring to an end a career which otherwise can be very successful. The lack of control of temper and the tendency to think last and speak first is something which has hampered me in my dealings not only with you but with my own family, my business associates and my friends. My last break at the Metropolitan Club and my swearing at you is an act which I will never forget and from which my heart will never fully recover. Family conferences with you and Dick are something that I’ve looked forward to all my life and for me to thoroughly ruin one of our first is something for which I owe not only you but also Dick a real apology.…
You mentioned … how you wanted to feel that I would and could take a place as a rallying point for the family as its oldest and really
if I can successfully do this it will fulfill my greatest ambition. Of course, you can never have confidence in my ability to do so until I prove to you that I can control Tom Watson Jr. and think before I speak. You are a practical businessman and have built IBM on fact not promises.…
Believe me, I have and will continue to pay for my statement at the Met. Club but that’s my fault. If you see fit to watch from now on you’ll see a change that will please you. Temper will be watched and also stupid jealousy and I’ll be a different and better son and brother.
With sincere intentions & great love,
Tom
This was one of our worst clashes, but Dad and I got into big arguments practically every month. We’d reconcile and try to cooperate, but pretty soon he’d second-guess me on a decision or I’d express an opinion on something he thought was none of my business, and we’d go at it again. In retrospect I realize what a toll these flare-ups must have taken on Dad. Another of the papers he left at his death was a meditation he wrote around his seventy-fifth birthday. From the way it reads, he is smarting from something I said. I’ve obviously accused him of driving able executives out of IBM so he can surround himself with yes-men. He feels depressed and haunted by the names of those who have died, or quit, or been fired. He thinks Dick and I are anxious for him to leave—something he’s fiercely determined not to do.
Nobody should have the right to challenge my knowledge of IBM due to my 35 years experience. Think what I could have done with the guidance of someone of experience.
I will give all I have got to leaving IBM with enough people in the Executive end who believe in me. Joe Rogers, Fred Nichol and Charlie Kirk, Titus & Ogsbury all helped me—the latter 2 thought my policies were not good & they brought great damage to us. That is why I had to let out two vice-presidents. That was the hardest job I ever did in my whole work in IBM—but I had to do it.
The reason I’m sticking on the job & working is because the leading industrialists and bankers of the world seem to be unanimous that I have accomplished something worthwhile in building a sound business & in establishing certain policies which have proven to be beneficial to all of the employees of IBM & last but not least to the public we serve & the stockholders who entrust us with their investment. The moral to this is: It has always been my hope & ambition that my two sons would be ambitious & determined to prepare themselves to carry on the IBM Company & put the name of Watson far above its present standing in the industrial, social & economic world & as a result they will each have a greater opportunity to be of service to their family, relatives & worthwhile institutions and deserving people everywhere.
I am equally proud of both my sons and I’m also proud of what they have accomplished in the short time of their respective service with the company and I know that both my sons realize that experience is the greatest teacher.
I’m glad I never saw the note at the time. I’d have felt guilty as hell, and probably I’d have gotten mad, because Dad made it sound as if our apprenticeships were never going to end. I’d have started fighting all over again.
It didn’t occur to me then, but I suspect that my sister Jane was behind some of these disputes. Jane had Dad’s ear, and at that stage in our lives, she and I didn’t get along very well. She’d have seen the World Trade issue in terms of rivalry because she was so competitive herself. If you had to pick who was the strongest and hardest driving of T. J. Watson’s children, it would be a toss-up between Jane and me. She was a handsome woman, tall and dark haired, and she’d already made a name for herself in Washington and New York social circles. She had Dad’s ability to get to know and charm the top people, but it was going to take another twenty years before she and I learned to get along.
Dad’s feelings for Jane were complicated. I could never see what he wanted for her, and maybe he didn’t know himself. It probably never crossed his mind that she might have a career, even though women executives were not unheard of at that point, and IBM actually had a woman vice president in charge of our field force for systems service. But Dad didn’t seem to want Jane to get married, either. She stayed single until she was thirty-three years old, and to me it seemed as if she’d come close to wrecking her life for Dad. She’d had several suitors, but he’d driven them away. It wasn’t until after the war that Jane found an acceptable man. His name was John Irwin II, and he was tall, attractive, and probably the best dancer I ever saw. Jack never drank, never smoked, but boy could he dance. He’d been president of his class at Princeton all four years and captain of the track team. His war record was outstanding too—he served on General MacArthur’s staff, rose very rapidly, and was discharged a full colonel, one rank higher than mine. He was starting a promising career as a lawyer and diplomat.
Once Jane got married I had hopes that we might become tolerant of one another. She and Jack and Olive and I had some good times skiing together in Vermont and going to Margaret Truman’s parties at the White House. But any success I had at IBM seemed to burn Jane up. I finally saw just how competitive she felt toward me during a visit to her house in the spring of 1950. There were pictures and trophies of Jack everywhere—Jack as an oarsman, Jack as a track star, Jack as this, Jack as that. Jane knew I was a little envious of Jack because every opportunity I had missed in my youth he had hit on the head. She saw me looking at mementos of his war career and said, “Tom, did you know that Jack was a full colonel?” She was needling me because I hadn’t made it to that grade. I completely lost my temper. “Yeah, of course I know he was a full colonel. But I was the one flying airplanes all over the world!”
There were always certain things Dad could say that would tick me off in ten seconds. After this episode, telling me to be nice to Jane was one of them, and holding Jack up as an example was another. Jack and I got along fine, but Dad was never convinced I meant him well. He’d say, “I don’t know why you object to your brother-in-law. He is a very thoughtful fellow. He thinks very carefully before he speaks.” His implication was clear: Jack had the discipline and self-control that I lacked. I’d rise to the bait every time.
There were times in those early years when Dad and I really got along—generally when he relaxed his grip enough to let me run parts of IBM as I knew I could. As executive vice president, I was now IBM’s number-two man, practically speaking, even though Dad had arranged things, perhaps wisely, to keep George Phillips as a buffer between us. He did this by shuffling titles, promoting Phillips to president and kicking himself upstairs to the new position of chairman.
In my new job I was responsible for a great deal more than our sales operation. I was supposed to oversee all of IBM’s manufacturing, which meant that I had to find a way quickly to become somebody in the eyes of more than nine thousand factory workers. They were tremendously loyal to Dad, they’d been loyal to Kirk, but they barely knew me. Dad saw that this could be a problem, and six months after I got promoted, he called me to his office and handed me an envelope. “Here’s your opportunity to endear yourself to the factory people,” he said. “Why don’t you talk to them?”
It was an anonymous letter complaining about the working conditions in one of our plants. It said, “We have fifty people working in a building that was designed to be a warehouse. It isn’t properly heated and there’s only one toilet. It is a disgrace to have IBM people working this way.” I left the next day, and when I reached the factory, I found that conditions were exactly as described. Somebody had decided May was a warm enough month for the furnace to be overhauled. They’d torn it to pieces, and then a cold snap hit, so everybody was miserable. I did what I thought Dad would have done. I got temporary heaters put in within ninety minutes of my arrival. Within two hours I had men cutting foundations for new toilets in the back. Then I called all the workers together. I took a stepladder and climbed up on it and said, “I want to read you this letter. Unhappily it’s unsigned, because I would like to give a raise and a promotion to the man who wrote it. I wish he’d had enough confidence in me to sign
his name. But he’s absolutely right. Those men with jackhammers are putting in eight more toilets and we’re going to permanently improve the building’s heat.” It was a happy way for me to begin my duties in manufacturing, and word of what I’d done spread through all our plants.
Dad was pleased when I got back to New York and told him of my performance on the stepladder. It showed I was learning. What may have pleased him even more was that IBM was beginning to make money from some of my earlier decisions. For example, thanks to a personnel change I’d made the year after Charley Kirk died, our typewriter division was about to earn its first profit. Ever since Dad had bought the Electro-Matic Typewriter Company in 1933, we’d been trying to sell American business on the virtues of electric typewriters. Dad thought they were a sure bet, because they were fast and neat and enabled the women in the office to type without knocking their manicures to pieces. But the machines were several times more expensive than ordinary typewriters, and after the war they still hadn’t caught on. Our annual typewriter sales were only eleven million dollars, and we’d lost money in the business every year. So in early 1947 I told Norman Collister, the division chief, “I’d rather sell this operation outright than keep bleeding forever.” I was sharp with him, but he came back at me just as strongly.
“We’re still getting our feet under us.”
“It’s pretty hard for me to convince myself of that because we’ve been at it for thirteen years,” I said. “We have a big distribution system, a trained sales force, and there’s been no lack of money for development. If we were going to make it, we should have made it by now.”
Father, Son & Co. Page 21
