Thomas J. Watson, Jr.
Encyclopedia
Thomas John Watson, Jr. (January 14, 1914 – December 31, 1993) was an American
businessman, political figure, and philanthropist. He was the 2nd president of IBM
(1952-1971), the 11th national president of the Boy Scouts of America
(1964-1968), and the 16th United States Ambassador to the Soviet Union (1979-1981). He received many honors during his lifetime, including being awarded the Presidential Medal of Freedom
by Lyndon B. Johnson
in 1964. Watson was called "the greatest capitalist in history" and one of "100 most influential people of the 20th century".
. Then two sisters were born, Jane and Helen, before the youngest child, Arthur Kittredge Watson
, was born.
Both sons were immersed in IBM from a very early age. He was taken on plant inspections — his first memory of such a visit (to the Dayton, Ohio
factory) was at the age of five — business tours to Europe and he made appearances at IBM Hundred Per Cent Club meetings (annual gatherings for the company's elite sales representatives), even before he was old enough to attend school.
At home his father's discipline was erratic and often harsh. Around the time he was thirteen, Tom Jr. suffered for six years with what might now be called clinical depression
.
Talking to a reporter in 1974, Watson, Jr. described his relationship with his father; "My father and I had terrible fights ... He seemed like a blanket that covered everything. I really wanted to beat him but also make him proud of me." But this relationship was not all negative: "I really enjoyed the ten years (working) with him". In his book he says; "I was so intimately entwined with my father. I had a compelling desire, maybe out of honor for the old gentleman, maybe out of sheer cussedness, to prove to the world that I could excel in the same way that he did."
Watson Jr. attended the Hun School of Princeton
in Princeton, New Jersey
. He claimed in his autobiography
that as a child he had a "strange defect in his vision" that made written words appear to fall off the page when he tried to read them. As a result Watson struggled in school, and he acknowledged that Brown University
reluctantly admitted him as a favor to his father. He obtained a business degree in 1937. He married Olive Cawley (1918–2004) in 1941. They had six children.
After graduating Watson became a salesman for IBM, but had little interest in the job. The turning point was his service as a pilot
in the Army Air Force
during World War II
. Brother "Dick" (Arthur) Watson had dropped out of Yale
as a Major in Ordnance. Tom Jr. became a Lieutenant Colonel flying military commanders. Tom Jr. later admitted to journalists that the one career he would have liked to follow was an airline pilot. Piloting came easily to him and for the first time he had confidence in his abilities. Toward the end of his service Watson worked for Major General Follett Bradley, who suggested that he should try to follow his father at IBM. Watson regularly flew Bradley, the director of lend-lease
programs to the Soviet Union
, to Moscow
during the war. On these trips he learned Russian, which would later serve him well as the American Ambassador to the Soviet Union.
Watson returned to IBM at the beginning of 1946. He was promoted to be a Vice President just six months later and was promoted to the board just four months after that. He became Executive Vice-President in 1949.
systems for its commercial products.
Watson, Sr. had repeatedly rejected electronic computers as overpriced and unreliable, except for one-of-a-kind projects such as the IBM SSEC.
Tom Jr. took the company in a new direction, hiring electrical engineers by the hundreds and putting them to work designing mainframe computer
s.
Many of IBM's technical experts also did not think computer products were practical, since there were only about a dozen computers in the entire world at the time. Even the supporters of the new technology underestimated the potential. Cuthbert Hurd
, brought in from the Atomic Energy Commission
's Oak Ridge National Laboratory
to determine if there was a market, predicted "... he could find customers for as many as thirty machines."
Even so, until the late 1950s the custom-built US Air Force SAGE
computerized tracking system accounted for more than half of IBM's computer sales. The company made little profit on these sales but, as Tom Jr. said "It enabled us to build highly automated factories ahead of anybody else, and to train thousands of new workers in electronics."
Tom Jr.'s decision was justified; in the longer term it redirected IBM to its later position dominating the computer market. Even in the short term it paid off; for revenues more than tripled in six years, from $214.9 million in 1950 to $734.3 million in 1956. This dramatic rate of growth almost matched the wartime years; a better than 30% compound growth rate that Tom Jr. maintained for much of the twenty years of his leadership of IBM. It was a record even better than that of his father.
Despite the presence of his son, Thomas Sr. kept a firm grip on the reins until 1955. Tom Jr. described the position of his father as "He wanted to make me head of IBM, but he didn't like sharing the limelight."
Tom Jr. took over effective control in a dramatic moment; though the formal handover took place a few months later. The occasion was signing the Consent Decree which was offered by the government after its latest anti-trust investigation. Tom Jr. saw that the Consent Decree, which sought to strip IBM of half its card-making capacity, was largely irrelevant since the future was in computers not cards. There was another condition: IBM had to sell machines outright as well as lease them. This had repercussions in the late 1960s when leasing companies recognized the financing loophole that it created.
Behind this decision was another: spending more on research and development. IBM was only spending 3% on research and development when other high technology companies were spending between 6% and 9%. Tom Jr. learned the lesson, and thereafter — at least until the 1990s (when, even then, Gerstner
only dropped it to 6%) — IBM consistently spent 9%. By comparison, the equivalent figure for Japan was 5.1%, though its high technology companies exceeded even the IBM level, with the 1983 spending for Canon being 14.6% and that for NEC being 13.0%.
This training program was to take him, over the next five years, through many of IBM's operating groups. Tom Jr. believed his most important influence was Albert Lynn Williams
, a CPA
, who became president of IBM in 1961.
Although the initiative, and as such much of the credit for the birth of the information revolution, must go to Tom Jr., considerable courage was also displayed by his then aging father who, despite his long commitment to internal funding, backed his son to the hilt; reportedly with the words "It is harder to keep a business great than it is to build it."
Prior to his time IBM had primarily emphasized the sales organization, with a reasonable range of products. Tom Jr., however, promoted the research and development structure that is essential to modern high technology industry. It was under his supervision that the laboratories were built up, to a point where, in the late 1980s, they contained Nobel Prize winners; and to the point where the research and development function could stand on an equal footing with marketing, true to his original objective.
When Tom Jr. started this process in 1949, IBM was reportedly two years behind its main competitor, UNIVAC
. In the 1980s, it was arguably up to a decade ahead of anyone else; though its problems since seem to have destroyed much of its strength in this area. This was not so obvious to the outside world, because the new products still followed the conservative release pattern started in the 1920s (and pursued very profitably until recently). Despite the hype about 'pre-releasing' products which did not yet exist, only when the market was sufficiently developed, and a launch was financially justifiable, did IBM commit its marketing resources. In the labs though, they were able to plan speculatively for the future decades in advance, independent and untroubled by commercial demands. It was an ideal environment for an industrial researcher, and highly productive for IBM.
The first result of this was the IBM 7030 Stretch program to develop a transistorized "supercomputer" a hundred times more powerful than the vacuum tube 704. It failed to meet its price and performance goals, at a reported cost of $20 million. Although embarrassing in terms of the rumors that drifted to the outside world, it would not however be the last IBM computer series to be terminated and the cost was small in IBM's terms; and the experience gained was invaluable. One of IBM's strengths was that, until the 1980s, it really did learn from experience. Most other companies are only too anxious to bury deep their embarrassing mistakes; and never use the invaluable information they have gained. IBM however made very good use of these particularly hard earned lessons.
The three computer families that eventually emerged from 1958 onwards comprised the IBM 7070
and IBM 7090
for large government business, the IBM 1620
for the scientific community and the IBM 1401
for commercial use. Despite the fact that many observers believed that Tom Jr was frittering away the resources his father had built up, these new ranges were remarkably successful, doubling IBM's sales once more over the six years from 1958 ($1.17 billion) to 1964 ($2.31 billion), maintaining IBM's dramatic growth rate virtually undiminished at approaching 30% compound. The effect was that IBM had become independent of outside funding.
In the early 1960s he oversaw the IBM System/360 project, which produced an entire line of computers that ran the same software and used the same peripheral
s. Since the 360 line was incompatible with IBM's previous products, it represented an enormous risk for the company. Despite delays in shipment, the products were well-received following their launch in 1964 and what Fortune
magazine called "IBM's $5 Billion Gamble," in the end, paid off.
Smaller units were Electric Typewriter, IBM World Trade, Service Bureau Corporation Supplies Division; and Time Division (sold off in 1958).
Watson said "We had a superb sales organization but lacked expert management organization in almost everything else". His goal was to redirect IBM to absorb the shocks of change, including change from its own innovation.
He introduced the terminology "line and staff". In his words: "By the mid-'50s just about every big corporation had adopted the so-called staff-and-line structure. It was modeled on military organizations going back to the Prussian army in Napoleonic times."
His organization "... provided IBM executives with the clearest possible goals. Each operating man was judged strictly on his unit's results, and each staff man on his effort toward making IBM the world leader in his specialty."
The final element of formal organizational change was the isolation of headquarters staff in Armonk, New York
. This was said by him to be in order to be near his family. He lived in Connecticut, where taxes were lower; but kept his staff across the border in New York State so, it has been suggested, that IBM would not be seen as similarly evading taxes. Cynics said it was his fear of nuclear warfare
(he owned a fallout shelter
).
His first book in 1963 discussed his management philosophy.
from the Boy Scouts of America
in 1955 for his service to youth. He was the national president of the BSA from 1964 to 1968. His father had also served on the national executive board and was International Commissioner in the 1940s.
Lyndon B. Johnson
in September 1964 awarded Watson the Presidential Medal of Freedom
, the highest award a U.S. President can bestow on a civilian.
Watson was inducted into the Junior Achievement
U.S. Business Hall of Fame in 1976.
He was awarded the Vermilye Medal in 1967.
In 1987 Fortune
magazine hailed Watson on its cover as "the greatest capitalist in history."
In 1998 he was included on TIME Magazine's 100 most influential people of the 20th century.
. After recovering, he was appointed by Jimmy Carter
to be Ambassador to the Soviet Union, serving from October 29, 1979 to January 15, 1981. Prior to this service he was the Chairman of the General Advisory Committee (GAC) which was set up by President Kennedy to give advice to the President about America's nuclear defense policy.
He was an avid sailor and pilot. He named 7 successive sailboats after Palawan
, the last in 1991. Watson sailed his sailboat Palawan further up the Northern coast of Greenland than any non-military ship had done previously for which he won the New York Yacht Club
's highest award and the Cruising Club of America
's Blue Water Medal
. He traveled the route of Captain Cook in exploring the Pacific. He flew aircraft from helicopters and jets to stunt planes and he was the first private citizen to receive permission from Soviet Premier Mikhail Gorbachev
in 1986 to fly to all the time zones of the Soviet Union (a route he had previously done as a pilot ferrying General Bradley) in a jet he piloted himself.
Watson had homes in Greenwich, Connecticut
; North Haven, Maine
; Stowe, Vermont
; Vail, Colorado
; New York City
; and Antigua
. He died in Greenwich on December 31, 1993, of complications following a stroke
. He was 79.
Watson was the principal benefactor of the Watson Institute for International Studies
at Brown University
and the Thomas J. Watson Fellowship
(which supports students to study a topic of personal interest for a year) and other charitable gifts.
Watson contributed to the Watson Pavilion at Greenwich Hospital
in Connecticut
, which named the Olive and Thomas J. Watson Jr. Pavilion (a wing) after him and his wife. He was also the principal benefactor of Owls Head Transportation Museum in Owls Head, Maine
.
from 1975 onward. These included a library, the Thomas J. Watson Library of Business and Economics, and several smaller building grants.
Watson funded a Columbia East Campus residence hall named Watson House. The house became a landmark on campus and is one of the most coveted places for undergraduate seniors to live. In honor of Watson, the 2006-2007 residents of Watson House opened up a small snack shop called "The Watson Joint" emblematic of Watson's business principles.
The House organizes an annual trip to the Watson Estate in Maine.
United States
The United States of America is a federal constitutional republic comprising fifty states and a federal district...
businessman, political figure, and philanthropist. He was the 2nd president of IBM
IBM
International Business Machines Corporation or IBM is an American multinational technology and consulting corporation headquartered in Armonk, New York, United States. IBM manufactures and sells computer hardware and software, and it offers infrastructure, hosting and consulting services in areas...
(1952-1971), the 11th national president of the Boy Scouts of America
Boy Scouts of America
The Boy Scouts of America is one of the largest youth organizations in the United States, with over 4.5 million youth members in its age-related divisions...
(1964-1968), and the 16th United States Ambassador to the Soviet Union (1979-1981). He received many honors during his lifetime, including being awarded the Presidential Medal of Freedom
Presidential Medal of Freedom
The Presidential Medal of Freedom is an award bestowed by the President of the United States and is—along with thecomparable Congressional Gold Medal bestowed by an act of U.S. Congress—the highest civilian award in the United States...
by Lyndon B. Johnson
Lyndon B. Johnson
Lyndon Baines Johnson , often referred to as LBJ, was the 36th President of the United States after his service as the 37th Vice President of the United States...
in 1964. Watson was called "the greatest capitalist in history" and one of "100 most influential people of the 20th century".
Early life
Thomas Watson, Jr. was born on January 14, 1914, just before his father was dismissed from his job at NCRNCR Corporation
NCR Corporation is an American technology company specializing in kiosk products for the retail, financial, travel, healthcare, food service, entertainment, gaming and public sector industries. Its main products are self-service kiosks, point-of-sale terminals, automated teller machines, check...
. Then two sisters were born, Jane and Helen, before the youngest child, Arthur Kittredge Watson
Arthur K. Watson
Arthur Kittredge Watson served as president of IBM World Trade Corporation and United States Ambassador to France.-Family:He was born in Summit, New Jersey. His father, Thomas J...
, was born.
Both sons were immersed in IBM from a very early age. He was taken on plant inspections — his first memory of such a visit (to the Dayton, Ohio
Dayton, Ohio
Dayton is the 6th largest city in the U.S. state of Ohio and the county seat of Montgomery County, the fifth most populous county in the state. The population was 141,527 at the 2010 census. The Dayton Metropolitan Statistical Area had a population of 841,502 in the 2010 census...
factory) was at the age of five — business tours to Europe and he made appearances at IBM Hundred Per Cent Club meetings (annual gatherings for the company's elite sales representatives), even before he was old enough to attend school.
At home his father's discipline was erratic and often harsh. Around the time he was thirteen, Tom Jr. suffered for six years with what might now be called clinical depression
Clinical depression
Major depressive disorder is a mental disorder characterized by an all-encompassing low mood accompanied by low self-esteem, and by loss of interest or pleasure in normally enjoyable activities...
.
Talking to a reporter in 1974, Watson, Jr. described his relationship with his father; "My father and I had terrible fights ... He seemed like a blanket that covered everything. I really wanted to beat him but also make him proud of me." But this relationship was not all negative: "I really enjoyed the ten years (working) with him". In his book he says; "I was so intimately entwined with my father. I had a compelling desire, maybe out of honor for the old gentleman, maybe out of sheer cussedness, to prove to the world that I could excel in the same way that he did."
Watson Jr. attended the Hun School of Princeton
Hun School of Princeton
The Hun School of Princeton is a private, coeducational, secondary boarding school located in Princeton Township, New Jersey, United States. The school has a Princeton, New Jersey mailing address. The school serves students from grades 6 through high school. Currently, the headmaster is Jonathan...
in Princeton, New Jersey
Princeton, New Jersey
Princeton is a community located in Mercer County, New Jersey, United States. It is best known as the location of Princeton University, which has been sited in the community since 1756...
. He claimed in his autobiography
Autobiography
An autobiography is a book about the life of a person, written by that person.-Origin of the term:...
that as a child he had a "strange defect in his vision" that made written words appear to fall off the page when he tried to read them. As a result Watson struggled in school, and he acknowledged that Brown University
Brown University
Brown University is a private, Ivy League university located in Providence, Rhode Island, United States. Founded in 1764 prior to American independence from the British Empire as the College in the English Colony of Rhode Island and Providence Plantations early in the reign of King George III ,...
reluctantly admitted him as a favor to his father. He obtained a business degree in 1937. He married Olive Cawley (1918–2004) in 1941. They had six children.
After graduating Watson became a salesman for IBM, but had little interest in the job. The turning point was his service as a pilot
Aviator
An aviator is a person who flies an aircraft. The first recorded use of the term was in 1887, as a variation of 'aviation', from the Latin avis , coined in 1863 by G. de la Landelle in Aviation Ou Navigation Aérienne...
in the Army Air Force
United States Army Air Forces
The United States Army Air Forces was the military aviation arm of the United States of America during and immediately after World War II, and the direct predecessor of the United States Air Force....
during World War II
World War II
World War II, or the Second World War , was a global conflict lasting from 1939 to 1945, involving most of the world's nations—including all of the great powers—eventually forming two opposing military alliances: the Allies and the Axis...
. Brother "Dick" (Arthur) Watson had dropped out of Yale
YALE
RapidMiner, formerly YALE , is an environment for machine learning, data mining, text mining, predictive analytics, and business analytics. It is used for research, education, training, rapid prototyping, application development, and industrial applications...
as a Major in Ordnance. Tom Jr. became a Lieutenant Colonel flying military commanders. Tom Jr. later admitted to journalists that the one career he would have liked to follow was an airline pilot. Piloting came easily to him and for the first time he had confidence in his abilities. Toward the end of his service Watson worked for Major General Follett Bradley, who suggested that he should try to follow his father at IBM. Watson regularly flew Bradley, the director of lend-lease
Lend-Lease
Lend-Lease was the program under which the United States of America supplied the United Kingdom, the Soviet Union, China, Free France, and other Allied nations with materiel between 1941 and 1945. It was signed into law on March 11, 1941, a year and a half after the outbreak of war in Europe in...
programs to the Soviet Union
Soviet Union
The Soviet Union , officially the Union of Soviet Socialist Republics , was a constitutionally socialist state that existed in Eurasia between 1922 and 1991....
, to Moscow
Moscow
Moscow is the capital, the most populous city, and the most populous federal subject of Russia. The city is a major political, economic, cultural, scientific, religious, financial, educational, and transportation centre of Russia and the continent...
during the war. On these trips he learned Russian, which would later serve him well as the American Ambassador to the Soviet Union.
Watson returned to IBM at the beginning of 1946. He was promoted to be a Vice President just six months later and was promoted to the board just four months after that. He became Executive Vice-President in 1949.
IBM President
Tom Watson, Jr. became president of IBM in 1952. Up to this time IBM was dedicated to electromechanical punched cardPunched card
A punched card, punch card, IBM card, or Hollerith card is a piece of stiff paper that contains digital information represented by the presence or absence of holes in predefined positions...
systems for its commercial products.
Watson, Sr. had repeatedly rejected electronic computers as overpriced and unreliable, except for one-of-a-kind projects such as the IBM SSEC.
Tom Jr. took the company in a new direction, hiring electrical engineers by the hundreds and putting them to work designing mainframe computer
Mainframe computer
Mainframes are powerful computers used primarily by corporate and governmental organizations for critical applications, bulk data processing such as census, industry and consumer statistics, enterprise resource planning, and financial transaction processing.The term originally referred to the...
s.
Many of IBM's technical experts also did not think computer products were practical, since there were only about a dozen computers in the entire world at the time. Even the supporters of the new technology underestimated the potential. Cuthbert Hurd
Cuthbert Hurd
Cuthbert Corwin Hurd was an American computer scientist and entrepreneur, who was instrumental in helping the International Business Machines Corporation develop its first general-purpose computers.-Life:...
, brought in from the Atomic Energy Commission
United States Atomic Energy Commission
The United States Atomic Energy Commission was an agency of the United States government established after World War II by Congress to foster and control the peace time development of atomic science and technology. President Harry S...
's Oak Ridge National Laboratory
Oak Ridge National Laboratory
Oak Ridge National Laboratory is a multiprogram science and technology national laboratory managed for the United States Department of Energy by UT-Battelle. ORNL is the DOE's largest science and energy laboratory. ORNL is located in Oak Ridge, Tennessee, near Knoxville...
to determine if there was a market, predicted "... he could find customers for as many as thirty machines."
Even so, until the late 1950s the custom-built US Air Force SAGE
Semi Automatic Ground Environment
The Semi-Automatic Ground Environment was an automated control system for tracking and intercepting enemy bomber aircraft used by NORAD from the late 1950s into the 1980s...
computerized tracking system accounted for more than half of IBM's computer sales. The company made little profit on these sales but, as Tom Jr. said "It enabled us to build highly automated factories ahead of anybody else, and to train thousands of new workers in electronics."
Tom Jr.'s decision was justified; in the longer term it redirected IBM to its later position dominating the computer market. Even in the short term it paid off; for revenues more than tripled in six years, from $214.9 million in 1950 to $734.3 million in 1956. This dramatic rate of growth almost matched the wartime years; a better than 30% compound growth rate that Tom Jr. maintained for much of the twenty years of his leadership of IBM. It was a record even better than that of his father.
Despite the presence of his son, Thomas Sr. kept a firm grip on the reins until 1955. Tom Jr. described the position of his father as "He wanted to make me head of IBM, but he didn't like sharing the limelight."
Tom Jr. took over effective control in a dramatic moment; though the formal handover took place a few months later. The occasion was signing the Consent Decree which was offered by the government after its latest anti-trust investigation. Tom Jr. saw that the Consent Decree, which sought to strip IBM of half its card-making capacity, was largely irrelevant since the future was in computers not cards. There was another condition: IBM had to sell machines outright as well as lease them. This had repercussions in the late 1960s when leasing companies recognized the financing loophole that it created.
Behind this decision was another: spending more on research and development. IBM was only spending 3% on research and development when other high technology companies were spending between 6% and 9%. Tom Jr. learned the lesson, and thereafter — at least until the 1990s (when, even then, Gerstner
Louis V. Gerstner, Jr.
Louis V. Gerstner, Jr. KBE was chairman of the board and chief executive officer of IBM from April 1993 until 2002 when he retired as CEO in March and chairman in December. He is largely credited with turning around IBM's fortunes.He was formerly CEO of RJR Nabisco, and also held senior positions...
only dropped it to 6%) — IBM consistently spent 9%. By comparison, the equivalent figure for Japan was 5.1%, though its high technology companies exceeded even the IBM level, with the 1983 spending for Canon being 14.6% and that for NEC being 13.0%.
This training program was to take him, over the next five years, through many of IBM's operating groups. Tom Jr. believed his most important influence was Albert Lynn Williams
Albert Lynn Williams
Albert Lynn "Al" Williams was an American business executive who was president of IBM from May 1961 until March 1966.Born in Berwick, Pennsylvania, Williams attended Beckley College and became a Certified Public Accountant...
, a CPA
Certified Public Accountant
Certified Public Accountant is the statutory title of qualified accountants in the United States who have passed the Uniform Certified Public Accountant Examination and have met additional state education and experience requirements for certification as a CPA...
, who became president of IBM in 1961.
Although the initiative, and as such much of the credit for the birth of the information revolution, must go to Tom Jr., considerable courage was also displayed by his then aging father who, despite his long commitment to internal funding, backed his son to the hilt; reportedly with the words "It is harder to keep a business great than it is to build it."
Research and development
Of the two brothers, Tom Jr. made the most obvious impact on IBM as a whole, while Dick ran the international business.Prior to his time IBM had primarily emphasized the sales organization, with a reasonable range of products. Tom Jr., however, promoted the research and development structure that is essential to modern high technology industry. It was under his supervision that the laboratories were built up, to a point where, in the late 1980s, they contained Nobel Prize winners; and to the point where the research and development function could stand on an equal footing with marketing, true to his original objective.
When Tom Jr. started this process in 1949, IBM was reportedly two years behind its main competitor, UNIVAC
UNIVAC
UNIVAC is the name of a business unit and division of the Remington Rand company formed by the 1950 purchase of the Eckert-Mauchly Computer Corporation, founded four years earlier by ENIAC inventors J. Presper Eckert and John Mauchly, and the associated line of computers which continues to this day...
. In the 1980s, it was arguably up to a decade ahead of anyone else; though its problems since seem to have destroyed much of its strength in this area. This was not so obvious to the outside world, because the new products still followed the conservative release pattern started in the 1920s (and pursued very profitably until recently). Despite the hype about 'pre-releasing' products which did not yet exist, only when the market was sufficiently developed, and a launch was financially justifiable, did IBM commit its marketing resources. In the labs though, they were able to plan speculatively for the future decades in advance, independent and untroubled by commercial demands. It was an ideal environment for an industrial researcher, and highly productive for IBM.
The first result of this was the IBM 7030 Stretch program to develop a transistorized "supercomputer" a hundred times more powerful than the vacuum tube 704. It failed to meet its price and performance goals, at a reported cost of $20 million. Although embarrassing in terms of the rumors that drifted to the outside world, it would not however be the last IBM computer series to be terminated and the cost was small in IBM's terms; and the experience gained was invaluable. One of IBM's strengths was that, until the 1980s, it really did learn from experience. Most other companies are only too anxious to bury deep their embarrassing mistakes; and never use the invaluable information they have gained. IBM however made very good use of these particularly hard earned lessons.
The three computer families that eventually emerged from 1958 onwards comprised the IBM 7070
IBM 7070
IBM 7070 was a decimal architecture intermediate data processing system that was introduced by IBM in June 1960. It was part of the IBM 700/7000 series, and was based on discrete transistors rather than the vacuum tubes of the 1950s. It was the company's first transistorized stored-program...
and IBM 7090
IBM 7090
The IBM 7090 was a second-generation transistorized version of the earlier IBM 709 vacuum tube mainframe computers and was designed for "large-scale scientific and technological applications". The 7090 was the third member of the IBM 700/7000 series scientific computers. The first 7090 installation...
for large government business, the IBM 1620
IBM 1620
The IBM 1620 was announced by IBM on October 21, 1959, and marketed as an inexpensive "scientific computer". After a total production of about two thousand machines, it was withdrawn on November 19, 1970...
for the scientific community and the IBM 1401
IBM 1401
The IBM 1401 was a variable wordlength decimal computer that was announced by IBM on October 5, 1959. The first member of the highly successful IBM 1400 series, it was aimed at replacing electromechanical unit record equipment for processing data stored on punched cards...
for commercial use. Despite the fact that many observers believed that Tom Jr was frittering away the resources his father had built up, these new ranges were remarkably successful, doubling IBM's sales once more over the six years from 1958 ($1.17 billion) to 1964 ($2.31 billion), maintaining IBM's dramatic growth rate virtually undiminished at approaching 30% compound. The effect was that IBM had become independent of outside funding.
In the early 1960s he oversaw the IBM System/360 project, which produced an entire line of computers that ran the same software and used the same peripheral
Peripheral
A peripheral is a device attached to a host computer, but not part of it, and is more or less dependent on the host. It expands the host's capabilities, but does not form part of the core computer architecture....
s. Since the 360 line was incompatible with IBM's previous products, it represented an enormous risk for the company. Despite delays in shipment, the products were well-received following their launch in 1964 and what Fortune
Fortune (magazine)
Fortune is a global business magazine published by Time Inc. Founded by Henry Luce in 1930, the publishing business, consisting of Time, Life, Fortune, and Sports Illustrated, grew to become Time Warner. In turn, AOL grew as it acquired Time Warner in 2000 when Time Warner was the world's largest...
magazine called "IBM's $5 Billion Gamble," in the end, paid off.
Organizational structures
Perhaps Watson's most enduring contribution to IBM was its organizational structure, since new products, no matter how successful, carry a company for at most a few years. In 1956, in a move that became a bi-annual event, he reorganized IBM on divisional lines, to give a decentralized organization, with five major divisions in the US. The new structure comprised:- Data Processing Division — selling to (and servicing) commercial customers
- Federal Systems Division — selling to (and servicing) the US government
- Systems Manufacturing Division
- Components Manufacturing Division
- Research Division
Smaller units were Electric Typewriter, IBM World Trade, Service Bureau Corporation Supplies Division; and Time Division (sold off in 1958).
Watson said "We had a superb sales organization but lacked expert management organization in almost everything else". His goal was to redirect IBM to absorb the shocks of change, including change from its own innovation.
He introduced the terminology "line and staff". In his words: "By the mid-'50s just about every big corporation had adopted the so-called staff-and-line structure. It was modeled on military organizations going back to the Prussian army in Napoleonic times."
His organization "... provided IBM executives with the clearest possible goals. Each operating man was judged strictly on his unit's results, and each staff man on his effort toward making IBM the world leader in his specialty."
The final element of formal organizational change was the isolation of headquarters staff in Armonk, New York
Armonk, New York
Armonk is a hamlet and census-designated place located in the town of North Castle in Westchester County, New York. As of the 2010 census, the CDP population was 4,330....
. This was said by him to be in order to be near his family. He lived in Connecticut, where taxes were lower; but kept his staff across the border in New York State so, it has been suggested, that IBM would not be seen as similarly evading taxes. Cynics said it was his fear of nuclear warfare
Nuclear warfare
Nuclear warfare, or atomic warfare, is a military conflict or political strategy in which nuclear weaponry is detonated on an opponent. Compared to conventional warfare, nuclear warfare can be vastly more destructive in range and extent of damage...
(he owned a fallout shelter
Fallout shelter
A fallout shelter is an enclosed space specially designed to protect occupants from radioactive debris or fallout resulting from a nuclear explosion. Many such shelters were constructed as civil defense measures during the Cold War....
).
His first book in 1963 discussed his management philosophy.
Honors
Watson received the Silver Buffalo AwardSilver Buffalo Award
The Silver Buffalo Award is the national-level distinguished service award of the Boy Scouts of America. It is presented for noteworthy and extraordinary service to youth on a national basis, either as part of, or independent of the Scouting program...
from the Boy Scouts of America
Boy Scouts of America
The Boy Scouts of America is one of the largest youth organizations in the United States, with over 4.5 million youth members in its age-related divisions...
in 1955 for his service to youth. He was the national president of the BSA from 1964 to 1968. His father had also served on the national executive board and was International Commissioner in the 1940s.
Lyndon B. Johnson
Lyndon B. Johnson
Lyndon Baines Johnson , often referred to as LBJ, was the 36th President of the United States after his service as the 37th Vice President of the United States...
in September 1964 awarded Watson the Presidential Medal of Freedom
Presidential Medal of Freedom
The Presidential Medal of Freedom is an award bestowed by the President of the United States and is—along with thecomparable Congressional Gold Medal bestowed by an act of U.S. Congress—the highest civilian award in the United States...
, the highest award a U.S. President can bestow on a civilian.
Watson was inducted into the Junior Achievement
Junior Achievement
Junior Achievement or JA or JA Worldwide is a non-profit youth organization that was founded in 1919 by Horace A. Moses, Theodore Vail, and senator Winthrop M. Crane. JA focuses on educating kids in K-12 about the free enterprise system...
U.S. Business Hall of Fame in 1976.
He was awarded the Vermilye Medal in 1967.
In 1987 Fortune
Fortune (magazine)
Fortune is a global business magazine published by Time Inc. Founded by Henry Luce in 1930, the publishing business, consisting of Time, Life, Fortune, and Sports Illustrated, grew to become Time Warner. In turn, AOL grew as it acquired Time Warner in 2000 when Time Warner was the world's largest...
magazine hailed Watson on its cover as "the greatest capitalist in history."
In 1998 he was included on TIME Magazine's 100 most influential people of the 20th century.
Retirement
Watson left IBM in 1971 on his doctor's advice after having a heart attackMyocardial infarction
Myocardial infarction or acute myocardial infarction , commonly known as a heart attack, results from the interruption of blood supply to a part of the heart, causing heart cells to die...
. After recovering, he was appointed by Jimmy Carter
Jimmy Carter
James Earl "Jimmy" Carter, Jr. is an American politician who served as the 39th President of the United States and was the recipient of the 2002 Nobel Peace Prize, the only U.S. President to have received the Prize after leaving office...
to be Ambassador to the Soviet Union, serving from October 29, 1979 to January 15, 1981. Prior to this service he was the Chairman of the General Advisory Committee (GAC) which was set up by President Kennedy to give advice to the President about America's nuclear defense policy.
He was an avid sailor and pilot. He named 7 successive sailboats after Palawan
Palawan
Palawan is an island province of the Philippines located in the MIMAROPA region or Region 4. Its capital is Puerto Princesa City, and it is the largest province in the country in terms of total area of jurisdiction. The islands of Palawan stretch from Mindoro in the northeast to Borneo in the...
, the last in 1991. Watson sailed his sailboat Palawan further up the Northern coast of Greenland than any non-military ship had done previously for which he won the New York Yacht Club
New York Yacht Club
The New York Yacht Club is a private social club and yacht club based in New York City and Newport, Rhode Island. It was founded in 1844 by nine prominent sportsmen. The members have contributed to the sport of yachting and yacht design. The organization has over 3,000 members as of 2011. ...
's highest award and the Cruising Club of America
Cruising Club of America
-History:It was launched in the winter of 1921-1922 by a handful of experienced offshore sailors interested in cruising and the development of the cruising type of yacht....
's Blue Water Medal
Blue Water Medal
The Blue Water Medal is an honor awarded annually by the Cruising Club of America for a remarkable sailing feat. The first award was issued in 1923.-Winners:*Alex Whitworth "for a circumnavigation of the world via the Northwest Passage west to east."...
. He traveled the route of Captain Cook in exploring the Pacific. He flew aircraft from helicopters and jets to stunt planes and he was the first private citizen to receive permission from Soviet Premier Mikhail Gorbachev
Mikhail Gorbachev
Mikhail Sergeyevich Gorbachev is a former Soviet statesman, having served as General Secretary of the Communist Party of the Soviet Union from 1985 until 1991, and as the last head of state of the USSR, having served from 1988 until its dissolution in 1991...
in 1986 to fly to all the time zones of the Soviet Union (a route he had previously done as a pilot ferrying General Bradley) in a jet he piloted himself.
Watson had homes in Greenwich, Connecticut
Greenwich, Connecticut
Greenwich is a town in Fairfield County, Connecticut, United States. As of the 2010 census, the town had a total population of 61,171. It is home to many hedge funds and other financial service companies. Greenwich is the southernmost and westernmost municipality in Connecticut and is 38+ minutes ...
; North Haven, Maine
North Haven, Maine
North Haven is a town in Knox County, Maine, United States, in Penobscot Bay. The town is both a year-round island community and a prominent summer colony. The population was 381 at the 2000 census...
; Stowe, Vermont
Stowe, Vermont
Stowe is a town in Lamoille County, Vermont, United States. The population was 4,339 at the 2000 census. Tourism is a significant industry.-Geography:...
; Vail, Colorado
Vail, Colorado
The Town of Vail is a Home Rule Municipality in Eagle County, Colorado, United States. The population of the town was 4,589 in 2005. The town was established and built as the base village to Vail Ski Resort, with which it was originally conceived...
; New York City
New York City
New York is the most populous city in the United States and the center of the New York Metropolitan Area, one of the most populous metropolitan areas in the world. New York exerts a significant impact upon global commerce, finance, media, art, fashion, research, technology, education, and...
; and Antigua
Antigua
Antigua , also known as Waladli, is an island in the West Indies, in the Leeward Islands in the Caribbean region, the main island of the country of Antigua and Barbuda. Antigua means "ancient" in Spanish and was named by Christopher Columbus after an icon in Seville Cathedral, Santa Maria de la...
. He died in Greenwich on December 31, 1993, of complications following a stroke
Stroke
A stroke, previously known medically as a cerebrovascular accident , is the rapidly developing loss of brain function due to disturbance in the blood supply to the brain. This can be due to ischemia caused by blockage , or a hemorrhage...
. He was 79.
Philanthropy
Watson Institute for International Studies
The Watson Institute for International Studies is a center for the analysis of international issues at Brown University, focusing mainly on global security and political economy and society. Its faculty span a wide range of disciplines, including, anthropology, economics, political science, and...
at Brown University
Brown University
Brown University is a private, Ivy League university located in Providence, Rhode Island, United States. Founded in 1764 prior to American independence from the British Empire as the College in the English Colony of Rhode Island and Providence Plantations early in the reign of King George III ,...
and the Thomas J. Watson Fellowship
Thomas J. Watson Fellowship
The Thomas J. Watson Fellowship is a grant that enables graduating seniors to pursue a year of independent study outside the United States. The Fellowship Program was established by the children of Thomas J. Watson, the founder of IBM....
(which supports students to study a topic of personal interest for a year) and other charitable gifts.
Watson contributed to the Watson Pavilion at Greenwich Hospital
Greenwich Hospital (Connecticut)
Greenwich Hospital in Greenwich, Connecticut, is a community hospital serving people in lower Fairfield County and in lower Westchester County New York....
in Connecticut
Connecticut
Connecticut is a state in the New England region of the northeastern United States. It is bordered by Rhode Island to the east, Massachusetts to the north, and the state of New York to the west and the south .Connecticut is named for the Connecticut River, the major U.S. river that approximately...
, which named the Olive and Thomas J. Watson Jr. Pavilion (a wing) after him and his wife. He was also the principal benefactor of Owls Head Transportation Museum in Owls Head, Maine
Owls Head, Maine
Owls Head is a town in Knox County, Maine, United States. The population was 1,601 at the 2000 census. A resort and fishing area, the community is home to the Knox County Regional Airport...
.
Columbia University
After leaving IBM Watson donated tens of millions of dollars to Columbia UniversityColumbia University
Columbia University in the City of New York is a private, Ivy League university in Manhattan, New York City. Columbia is the oldest institution of higher learning in the state of New York, the fifth oldest in the United States, and one of the country's nine Colonial Colleges founded before the...
from 1975 onward. These included a library, the Thomas J. Watson Library of Business and Economics, and several smaller building grants.
Watson funded a Columbia East Campus residence hall named Watson House. The house became a landmark on campus and is one of the most coveted places for undergraduate seniors to live. In honor of Watson, the 2006-2007 residents of Watson House opened up a small snack shop called "The Watson Joint" emblematic of Watson's business principles.
The House organizes an annual trip to the Watson Estate in Maine.
External links
- Oral history interview, April 25, 1985. Charles Babbage InstituteCharles Babbage InstituteThe Charles Babbage Institute is a research center at the University of Minnesota specializing in the history of information technology, particularly the history since 1935 of digital computing, programming/software, and computer networking....
, University of Minnesota, Minneapolis. Interviewer was Arthur L.C. Humphreys - IBM biography of Watson Jr.