Thomas Watson . He was the president of IBM who oversaw the growth of the company to become a multinational from the 1920s to the 1950s. It developed its effective management style and made it one of the most effective sales companies thanks to the punch cards it made. He was one of the richest men of his time.
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- 1 Biographical synthesis
- 1 Marriage
- 2 Work at the NCR
- 3 Creation of IBM
- 3.1 Watson’s strategy at IBM
- 4 Death
- 2 Source
He was born into a humble family on February 17 , 1874 in Campbell, New York .
His formal education was restricted to a course at the “Elmira School of Commerce”. His career began at age 18 as a bookseller. Later, he was on the road selling Wheeler & Wilcox sewing machines and musical instruments, learning his salesmanship skills.
He also learned a lot from his bosses, learning that other street vendors charged a commission per sale, while he did not. In the end they fired him because he confessed that a sewing machine that he carried on horseback had been stolen from him.
After a while he collaborated with CB Barron, an “expert” businessman, selling shares in a loan company (Northern New York State Building and Loan Association). Barron turned out to be a con man who one day disappeared with all the money without a trace, and for this Watson was fired.
So he tried setting up a butcher shop in Buffalo, but it went badly and he was forced to sell it along with all his machinery. Among the machines was a cash register from the National Cash Register Company. When Watson went to NCR to transfer ownership to the new owner of the butcher shop, he met John Range, who offered him a job at the company and trained him as a salesman.
It was from 1895 , when he entered the National Cash Register Company. It didn’t take long for him to rise to the position of general manager of sales. He later ran into trouble with the law and received complaints for anti-competitive practices, such as selling faulty cash registers. He was sentenced to 1 year in jail, but later pardoned for helping victims of a flood in Dayton, Ohio, in 1913 .
He married Jeanette M. Kittredge on April 17 , 1913 , with whom he had two sons and two daughters.
In 1948 , Thomas Watson used his privileged position on the Columbia University board of trustees (which he had joined in 1937 ) to lift Dwigth D. Eisenhower into his presidency (a position he would hold until 1953 , the year he became President of the USA).
Watson’s eldest son was Thomas John Watson, Jr. ( 1914 – 1993 ), and he was the one who in 1956 took over IBM. He suffered from dyslexia that prevented him from reading and writing correctly, and for this reason it was difficult for him to continue his studies. Brown University accepted him to study economics only as a favor to his father.
Watson Jr. entered IBM as a salesman, although with little interest in this job. He preferred to be a pilot during World War II ( 1939 – 1945 ) as it was easy for him and he took advantage of his abilities. In the end, a general he worked for recommended that he follow in his father’s footsteps at IBM.
In 1956 (when Thomas Watson Sr died), he became president of IBM, and changed the strategy of the company: instead of turning to tabulating machines, he hired many electrical engineers to make large computers (mainframes). In the 1960s he oversaw the IBM System / 360 project, which was a risk for the company as it would be incompatible with its previous products. However, they were well received, and Thomas J. Watson Jr was also decorated for his exploits.
I work at the NCR
The NCR had a clear monopoly on one market, that of cash registers, which was constantly growing. Competition was light and practically limited to the sale of second-hand NCR machines. Company President John PattersonHe could not bear that others were enriched at the expense of a business that he considered his and his alone. He decided to make the competition pay dearly for his audacity: he founded a fictitious organization dedicated to the sale of cash registers whose sole objective would be to ruin the competition. He put Thomas Watson in charge. Watson did not hesitate, for this purpose, to take advantage of the power of the NCR to buy back its used machines and even the original ones of the competition at a higher price than they would later resell them. The life expectancy of these machines was suspiciously short and, as soon as they stopped working, an NCR salesman would visit the unfortunate buyer to offer him a new machine. The success of the operation was resounding. Logically, the movements of the NCR ended up attracting the attention of the federal government. 30 of the company’s top officials, including the president and Thomas Watson, were sentenced to one year in prison and a $ 5,000 fine for monopolistic practices. However, probably due to popular pressure in favor of the company (which had made a more than remarkable effort to alleviate the damage caused by the great flood of Dayton in1913 ), the Cincinati Court of Appeals reversed the conviction in 1915 based on the omission of material presented by the defense.
By then, Thomas J. Watson had already been promoted to the second position of the company. To be fired shortly after, in 1914 . With the threat of prison still hanging over his head and with a newly formed family, he left for New York. There he contacted Charles R. Flint. He proposed that he take over the management of one of his companies: the Computing Tabulating Recording Company. And this is where the IBM story begins.
Creation of IBM
Charles R. Flint had managed in 1911 the merger of 3 of his companies to form the CTR: Tabulating Machine Company (the company founded by Herman Hollerith), Computing Scale and International Time Recording. In 1914 , his management became complicated and for this reason he turned to Thomas Watson, who entered as CEO, and became President in 1915 .
In 1917 , CTR entered the Canadian market under the name International Business Machines Co., Limited. In 1924 , CTR changed its name to International Business Machines Corporation, and thus IBM was created.
Watson’s strategy at IBM
When Watson joined IBM, it had fewer than 400 employees. But over time, and with Watson as president, IBM became a very powerful company; so much so that in 1952 it was denounced by the government, for monopoly. In those days, IBM controlled more than 90% of the tabulating machines in the United States. The CTR had a highly diversified production, but Watson was soon attracted by the potential of tabulating machines. Although its biggest consumer was the Census Bureau, it was clear to Watson that other large businesses might be inclined to exploit the possibilities of this product as well.
Watson’s management was undeniably influenced by his experience with John Patterson. The obsession with the culture inherited from his stay at NCR soon pushed him to create the cultural foundation that would later make IBM so famous. His experience at NCR also taught him that a happy employee is a loyal employee and therefore provided them with more than favorable working conditions. It also imported the territorial division system for sellers as well as the mandatory sales quotas and institutionalized the premiums for exceeding them.
The result of Watson’s management was very positive. He multiplied the company’s profits and expanded his domains to Europe, South America, Africa and Australia. In 1924 the CTR changed its name to something more attractive and more indicative of its current IBM activity. By 1929 , IBM already had 20% of the market for tabulating machines. The company not only managed to survive the collapse of the stock market, but also came out largely strengthened. Much of the success was due to the good use of the special policies promoted by Roosevelt (the so-called “New deal”). The newly created Social Security System required the tabulation of the time that each employee dedicated to their job and IBM was in charge of providing the necessary equipment.
Another major influence on Thomas Watson’s career was his former NCR colleague (and later one of General Motors’ top engineers) Charles Kittering. Kittering instilled in Watson a respect for research and development. Thomas Watson was convinced that R&D would guide his business to success. That is why IBM dedicated a large part of its effort to the development of new technologies from the 1930s on.
Throughout his life, Thomas Watson showed a deep interest in international relations. He worked closely with the International Chamber of Commerce and in 1937 he was elected its president. That same year, he received from the hands of the German Chancellor Adolf Hitler the Eagle with Star medal of foreign merit for his services. It is worth highlighting the role of IBM in supplying the NAZI regime with the material necessary for conducting censuses. Through its German subsidiary, Dehomag, IBM made a fortune by leasing continuously updated tabulating machines and the punch cards needed to store data. Needless to mention the importance of this technology in the application of the Final Solution. With the outbreak of World War II in 1940, Watson decided to return the medal to Hitler. After all, IBM’s motto “To world peace for world business” did not quite fit the German attitude.
With the entry of the United States into the war as a result of the attack on December 7, 41, IBM obtained millionaire profits from the sale of military and computer equipment to the army. Its workforce doubles and reaches 22,000 employees. She dedicated 1% of her profits to create a fund to help widows and orphans.
In the 1940s, IBM fully entered the general-purpose computing market. In April 1944 he presented the Mark I (designed by Howard Aiken). In the 5 years that its design lasted, the electromechanical technology used had become obsolete and its calculation speed was far below those of contemporary electronic machines such as the ENIAC. It was used by the military for ballistic calculation and naval design. In 1948 IBM introduced its first electronic machine: the ‘SSEC.
He died on 19 of June of 1956 , of a heart attack (like Herman Hollerith ), one of the richest people of his time, and considered one of the best businessmen in the world.