Thomas Watson Jr. – Founder of IBM (1914 – 1993)

Born    :January 14, 1914 in Dayton, Ohio, U.S.

Died    : December 31, 1993 (aged 79) in Greenwich, Connecticut, U.S.

Spouse(s)         :  Olive Cawley

Children          :  Thomas John Watson III, Jeanette Watson, Olive F. Watson, Lucinda Watson, Susan Watson, Helen Watson

Occupation      :  Business.

In 1943, 29-year-old Watson Jr. and his father were once walking around their headquarters when they found an engineer who had hooked an IBM tabulator up to an electronic gizmo the size of a footlocker. He was making payroll calculations in one-tenth the time it usually took. Thomas Watson Jr told his father, “We should put this thing on the market! Even if we only sell eight or 10, we will be able to advertise the fact that we have the world’s first commercial electronic calculator. But 10 years later he saw things differently, and IBM had launched the Model 650 Magnetic Drum Calculator. Today, with over 330,000 employees worldwide and revenues of $96 billion (figures from 2004), IBM is the largest information technology company in the world.

In 1954, the Model 650 used a magnetic drum 4 inches by 16 inches, and it could perform addition or subtraction functions in 1.6 milliseconds, multiplication in about 13 milliseconds, and division in about 17 milliseconds. IBM sometimes refers to the 650 as its first computer. Perhaps it is more accurate to call it IBM’s first commercial business computer (since the 701, also from IBM, was intended for scientific use) and the first computer to make a meaningful profit. The Model 650 became the leading commercial computer of the 1950s, leading IBM out of the desert of punch cards and into the promised land of electronic computing systems. But Watson Sr. would not live to see computers become the mainstay of his corporation; he was dying. In May 1956, at the age of 82, he retired, putting one son, Thomas Watson Jr., at the helm of IBM.

The man who built IBM into a computer giant was worried at the notion of filling his father’s shoes. But worry was a relentless motivator! Though Junior Watson joined the firm in 1937, he served in the US Air Force in the Second World War. Watson suffered bouts of depression and once burst into tears over the thought when his formidable father wanted him to join IBM and run the already famous company.”I cannot do it,” he wailed to his mother.

Thomas Watson Jr. spent his youth convinced that he had something inside. An always failing student,”Terrible Tommy;’ as he was called then, vented his frustration by playing pranks on other students and opposing the author.

In fact, he went through three schools to complete high school, and graduate, I from Brown University just because the dean was reported to be very sympathies towards him. The young playboy rated the pleasures of drinking and dancing) above those of learning.

He devoted more time to indulging his passions for flying airplanes by day and partying by night than to calling on clients of IBM. Even so, Watson filled his plan, sales quota for 1940 on the first day of that year, not because he was a talented salesman but the company faked the accounts to make him look good!

Yet 26 years later, Watson not only succeeded his father but also eventually surpassed him. IBM is now synonymous with computers, even though the company did not invent the device that would change our life, nor had it shipped a single computer before Thomas Jr. took over. How did this transformation take place? How come a man who once cried that he could not run the company, steered the same through the most successful history of computer sales in America?

World War II liberated Tom Watson Jr. from his bad habits. His success in promoting the use of flight simulators earned him a job as aide and pilot for Major General Follett Bradley, the Army Air Forces’ inspector general. Watson flew throughout Asia, Africa and the Pacific, displaying steel nerves and shrewd foresight and planning skills. He was set to fly for United Air Lines after the war when a chance conversation with Bradley changed hip course. Informed of Watson’s job plans, the general said,” Really? I always thought you’d go back and run the IBM Company. “A stunned Watson asked Bradley if he really thought he would do the job (running the IBM) well. The general replied, “Of course.” The business magnate in him was ignited by Bradley.

When he took over IBM from his father, he was convinced that the company should enter the computer market. When his father took charge of the company, it dominated the market for punch-card tabulators – forerunners of computers that performed such tasks as running payrolls and collating census data. Thomas Jr. quickly realized that its future lay in computers, not a 19th century information technology like tabulators. Even the first vacuum-tube machines could calculate 10 times as fast as IBM’s tabulators.

Watson Jr. who became president of IBM in 1952 never gave up. He recruited experts who could think ahead. Watson, who once shared his father’s volcanic temper, was now a changed person, because he feared of falling behind in the fast-changing industry. Funnily enough, he often told his employees, “the higher the monkey climbs, the more he shows his ass.”

With IBM clearly on top in the early ’60s, Watson took one of the biggest gambles in corporate history. He proposed spending more than $5 billion – about three times IBM’s revenues at the time – to develop a new line of computers that would make the company’s existing machines obsolete. The goal was to replace specialized units with a family of compatible computers that could fill every data- processing need. Customers could start with small computers and move up as their demands increased, taking their old software along with them. It was called the System/360, after the 360 degrees in a circle.

The strategy was on the verge of failure when software problems created delivery delays. Panic raced through IBM’s top echelons as rivals closed in. A desperate Watson ousted his younger brother Dick as head of engineering and manufacturing for the System/360 project. Ultimately, System/360, which revolutionized the industry, proved to be wildly successful. Its highly successful launch in 1964 was called by Fortune Magazine as ‘IBM’s $5billion Gamble.’ Following its success, IBM’s base of installed computers jumped from 11,000 in early 1964 to 35,000 in 1970, and its revenues more than doubled, to $7.5 billion. At the same time, IBM’s market value soared from about $14 billion to more than $36 billion.

A heart attack forced Watson to retire at age 57 in 1971, leaving him plenty of time for such adventures as flying across Siberia that he had made during the war. A lifelong Democrat (his father had been a Franklin Roosevelt confidant), Watson served for two years as Jimmy Carter’s ambassador to Moscow.

But perhaps his proudest achievement was to emerge from the shadow of a legendary, relentlessly demanding father. In his first five years as chairman, the younger Watson observed the anniversary of his father’s death in 1956 with a ritual. He quietly took stock of what IBM had accomplished since his father died, and then said to his wife, “That’s another year I’ve made it in his absence.

Thomas Watson Jr. – Founder of IBM (1914 – 1993)
Rate this post