Thomas J. Watson, Sr.
After an early life of failures and legal troubles, Thomas J. Watson bounced back from adversity to make IBM one of the great American companies of the 20th century.
Thomas J. Watson was born on Feb. 17, 1874 in Campbell, Steuben County. Tom worked on his father’s farm while attending grade school. After attending the Addison Academy, he tried teaching but quit after one day. He studied accounting and took a bookkeeping job, but soon decided to try his luck as a traveling salesman.
Watson had little success at first. He lost a job in Buffalo when his wagon and supplies were stolen while he celebrated a sale in a saloon. He sold shares in the Buffalo Building & Loan only to see his boss run off with all the money. His attempt to run a butcher shop also failed, but it introduced him to cash registers. Impressed by their convenience, Watson believed he could sell them for National Cash Register, the dominant manufacturer.
As a National Cash Register salesman, Watson learned innovative, effective methods of sales management from his boss, John Henry Patterson. At one sales meeting Watson wrote the word THINK on an easel. It became his motto for the rest of his career. He wanted salesmen to use their heads to figure out new markets for their products and new ways to sell them.
Watson became a leading salesman at NCR, but not everything he learned there was ethical. In 1912 he was one of 27 NCR officials convicted for violating the Sherman Anti-Trust Act. They would have spent a year in jail had not public pressure following NCR’s flood relief work in Dayton, Ohio, led to their convictions getting overturned in 1915. By then, Patterson had fired Watson, who had too many innovative ideas for his boss’s comfort.
The Computing-Tabulating-Recording company gave Watson another chance. C-T-R made tabulating machines that read punch cards to compile statistics. The company’s founders had pioneered tabulation technology but now were facing stiff competition. Watson realized that he could crush the competition by denying them licenses to use technology based on C-T-R patents. His old boss might have done that, but Watson renewed the licenses and resolved to beat the competition in the marketplace.
As president, Watson put his personal stamp on C-T-R by motivating his salesmen with big commissions and other incentives. He broadened C-T-R’s market by focusing on products useful to small businesses around the world. He put his stamp on the company indelibly in 1924 by renaming it International Business Machines, or IBM for short.
IBM became the archetypal 20th century business success story. It weathered the Great Depression thanks to regular income from customers who rented its machines and used IBM punch cards. He kept people on the job even as demand slowed, and his gamble paid off when the government’s new Social Security Administration signed a big contract with IBM. Building on its tabulation technology, IBM became a pioneer in the development of computers during World War II and remains a computer innovator to the present day.
Thomas Watson remained CEO of IBM until shortly before his death on June 19, 1956. Despite all his early setbacks, Watson has come to be known as one of the world’s greatest salesman.
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