thomas j watson 2

IBM Legend, Thomas Watson Jr

Watson’s father had taken a small company making punch card readers and turned it into the computer giant, IBM. When Watson Sr died, IBM had over $890m annual revenue (the equivalent of approximately $21bn today). It was clear that Thomas Jr had a daunting task to step out of his father’s shadow and take the company to the next level.

The early Watson did not fit the profile of a successful industry giant: he was a “drifter” up to the age of 19; suffered from depression; dyslexia; smoked marijuana; and barely graduated from university. But it was his time in the military during WWII that moulded him to be a leader: “[I] realised that I had the force of personality to get my ideas across to others.” After the war, Watson returned to IBM where he had been a salesperson. He quickly rose through the ranks and became its president in 1952.

This was a period marked by volatile change and some in IBM expressed concern over Watson’s ability and his decision to restructure the organisation (even though it had become a “messy company”). He was to take the company in a completely new direction both structurally (many credit him with how many companies today are organised into divisions) as well as focusing on mainframe computers; developing new hardware; software and consulting for huge brands and industries.

Watson broke away from tradition and urged his staff not to accept conventional wisdom: the ‘IBM way’ … is whatever way is most efficient, no matter how it was done in the past.” He laid the foundations of the IBM we know today. When he stepped down in 1971, IBM’s annual revenue was $7.5 billion (equivalent to $43 billion now).

If you want to achieve excellence, you can get there today. As of this second, quit doing less-than-excellent work.

Thomas Watson Jr’s Lessons

  1. There is simply no subsitute for good human relations. It’s easy to talk about but harder to realise. The real lesson is that you must work at them all the time and make sure your mangers are working with you.
  2. Create an organisation your staff want to work for. To attract and keep good people, you must create a company they want to be part of. That means making staff feel totally involved and valued, where they are treated fairly. If you don’t do that, it’s awfully hard to get a business off the ground.
  3. The two things an organisation must increase. The first is communication, both upward and downward. The second is education and training. IBM intentionally built a culture that flowed up from its people.
  4. Work for the greater good. The company interest must take precedence over departmental or division interests. Co-operation is more important than self-interest. In a speech, Watson declared that IBM was not based on products or businesses, but on a set of shared beliefs about the company’s place in the world and how to act to achieve that.
  5. It’s OK to fail. Watson famously said, “If you want to increase your success rate, double your failure rate.” He encouraged his team to take chances, stating that success is often to be found on the far side of failure. To him, the most dangerous threat was complacency and conformity. Watson recounts a story of keeping an employee who lost the company $600,000, “I just spent $600,000 training him. Why would I want somebody to hire his experience?” His permission for staff to try things and fail without retribution played a large part in growing IBM at a time of huge company, industry and global change.
  6. The importance of a shared philosophy. Watson was a fierce champion of the IBM philosophy of doing business. Technical ability can be taught but employees either believed in IBM’s approach or they were let go:
    • Dedication to every client’s success;
    • Innovation that matters—for our company and for the world;
    • Trust and responsibility in all relationships.

Quotations

  • “I never varied from the managerial rule that the worst possible thing was to lie dead in the water with any problem.”
  • “Solve it quickly, solve it right or wrong. If you solved it wrong, it would come back and slap you in the face, and then you could solve it right.”
  • “Doing nothing is an absolutely fatal way to manage a business.”
  • “All the problems of the world could be settled easily if people were only willing to think. The trouble is that people very often resort to all sorts of devices in order not to think, because thinking is such hard work.”
  • “Really big people are, above everything else, courteous, considerate and generous – not just to some people in some circumstances – but to everyone all the time.”



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