Watson, Thomas J., Sr.

American Business Executive
1874–1956

Thomas John Watson, born on February 17, 1874, was neither an inventor nor a technician, but his contributions to computer science were substantial nonetheless. During Watson's forty-two years of leadership at IBM Corporation, his marketing and management skills and his emphasis on research and development helped create the Computer Age. He died on June 19, 1956.

The fifth child of an immigrant Scots-Irishman, Watson was born in a four-room cabin in Painted Post, New York. He showed no affinity for the family farm and lumber business and chose to study business and accounting instead. After a year at the Miller School of Commerce in Elmira, New York, he accepted a bookkeeping job at the then relatively high salary of $6 a week. He was seventeen years old.

The job was shortlived, however, as Watson succumbed to the lure of the open road and the life of a traveling salesman, peddling pianos, organs, and sewing machines off the back of a wagon. He soon joined forces with a more established salesman named C. B. Barron, this time selling stock in the Northern New York State Building and Loan Association.

During this period, Watson began honing the selling skills that would someday earn him the nickname of the world's greatest salesman. But first there were a few bumps on the road: Barron absconded with the money they had earned, and Watson was fired. However, fortune smiled on Watson in October 1895, when he took a sales job with the National Cash Register Company (NCR) and was soon outperforming everyone in NCR's Buffalo, New York, office.

By 1912, after a series of rapid promotions, Watson had risen to second-in-command at NCR's corporate headquarters in Dayton, Ohio. At the age of thirty-eight, this tall, strikingly handsome man was one of the town's most eligible bachelors—but not for long. He met Jeannett Kittredge, daughter of a prominent businessman, at a country club dinner, and a year later they were married. The couple eventually had four children: Thomas, Jr.; Jane; Helen; and Arthur.

During the NCR years, to raise the morale of a dispirited sales force, Watson adopted his famous motto "THINK" and placed framed placards with that single word throughout the company's offices. Years later, he would use that same slogan at IBM, a company he was soon to join.

Watson's departure from NCR was preceded by two serious impediments to his career path. The first of these was an accusation by the company's main competitor, American Cash Register Company, that Watson and twenty-nine other executives had violated the Sherman Antitrust Act ﾀ by engaging in unfair business practices, some designed to eliminate the second-hand trade in business machines. Although Watson was sentenced to one year in jail and a $5,000 fine, the verdict was quickly appealed and eventually set aside. Nonetheless, the widely publicized trial did little for his standing at NCR. In addition, there was a public disagreement with NCR President John H. Patterson, and shortly thereafter Watson was dismissed.

Watson was recruited by Charles R. Flint, the founder of what was to become IBM, and on May 1, 1914, he became general manager of the Computing-Tabulating-Recording Company (CTR), a small conglomerate in need of a major turnaround. Watson was intrigued by the product line, particularly the tabulating machine invented by Herman Hollerith (1860–1929) to help tally census results. Believing that automated accounting and record keeping had great commercial potential, Watson focused on the tabulating-machine division. Later that year, as CTR president, he borrowed the funding for research and development and began a transformation of the company. In 1924, at the age of fifty, he became chief executive officer and changed CTR's name to International Business Machines Corporation (IBM), reflecting his vision of the future.

To realize that vision, Watson motivated his employees through slogans and songs, a company newspaper and school, a country club that any employee could join for a dollar a year, and the promise of lifetime employment. One of his slogans was "World peace through world trade." A master of sales promotion, he understood the needs of the customer and met those needs through continuous funding of engineering and research. It was primarily Watson's support that ensured the development of Howard Aiken's Mark I calculator—the first digital computer made in the United States and IBM's first step into the Computer Age. Advancements continued and in 1952 IBM introduced its first production computer, the 701, and the company was firmly established in the computer business.

Watson retired as president of the firm in 1949 to become chairman of the board, and on May 8, 1956, he passed on executive power to his eldest son, Thomas Watson Jr. Six weeks later, he died of a heart attack at the age of eighty-two.

see also Herman Hollerith; IBM Corporation; Mainframes.

Karen E. Esch

Bibliography

Belden, Thomas, and Marva Belden. The Lengthening Shadow: The Life of Thomas J. Watson. Boston: Little, Brown, 1962.

Fishman, Katharine Davis. The Computer Establishment. New York: Harper and Row, 1981.

Levinson, Harry, and Stuart Rosenthal. CEO: Corporate Leadership in Action. New York: Basic Books, 1984.

Rodgers, William. THINK: A Biography of the Watsons and IBM. New York: Stein and Day, 1969.

Slater, Robert. "Thomas J. Watson, Sr.: Founder of IBM." In Portraits in Silicon. Cambridge, MA: MIT Press, 1987.

Watson, Thomas J., Jr., and Peter Petre. Father, Son and Co. New York: Bantam Books, 1990.

ﾀ Named after American Senator John Sherman, the Sherman Antitrust Act (1890) was intended to reduce business practices that limited economic competition.

Thomas J. Watson

Thomas J. Watson (1874-1956), American business executive, assumed the management of International Business Machines in 1914 and built it into one of the world's largest corporations.

Thomas J. Watson was born Feb. 17, 1874, in Campbell, N. Y. He attended the Adison Academy but turned down his father's offer to pay his college expenses. Instead, he took a short course in the Elmira School of Commerce and became a salesman in Painted Post, N.Y.

In 1898 Watson joined the fast-growing National Cash Register Company as salesman. His first efforts were less than spectacular, but he received encouragement from his superiors, who realized the difficulty of the product market. During the next 15 years he moved steadily up the ladder, eventually becoming general sales manager. While working on advertising material, Watson produced a sign which read "THINK." This attracted John Patterson, the company's founder, who ordered copies for all offices.

Watson left National Cash Register in 1913 after a dispute over an antitrust legal issue and became president of Computing-Tabulating-Recording Company. The firm was a small holding company which controlled four other small firms that produced a punch-card tabulator, time clocks, and other machines. About this time Watson married Jeannette M. Kittredge, who bore him four children.

One of Watson's first tasks with his new firm involved the negotiation of a loan for expansion. Watson, like many other businessmen of his era, embraced the concept of research and development, and much of the borrowed funds went into an engineering laboratory. From this and other laboratories came new machines such as the key punch, card sorters, tabulators, and eventually the computer. In 1924 the firm merged with International Business Machines Corporation (IBM) and took its name. The success of Watson's leadership is dramatically revealed by investment data. One hundred shares, which would have cost $2, 750 in 1914, by 1956 were equivalent to 3, 990 shares valued at $2, 164, 000. By 1941 IBM held nearly 1, 400 patents on various types of business machines.

Having been a salesman, Watson placed great emphasis on that area of company activity. He insisted that IBM salesmen know how to install and service products as well as sell them. Labor conditions and benefits were always regarded as excellent.

IBM became a virtual monopoly, largely because of its patents and because the firm chose to rent its equipment rather than sell it. In 1952 the Federal government instigated an antitrust suit against IBM, charging that the firm controlled over 90 percent of all the tabulating machines in the country. The company agreed to a consent decree in 1956, by which competition was ensured.

Watson had many other interests outside the business world. For many years he served as a trustee for Columbia University. He participated in many ways to encourage and support the fine arts and gave financial assistance to all religious groups. He served as president of the International Chamber of Commerce. Watson acted as an adviser to several U.S. presidents. He died on July 19, 1956, in New York City.

Further Reading

Two biographies of Watson are Thomas Graham Belden and Marva Robins Belden, The Lengthening Shadow: The Life of Thomas J. Watson (1962), and William Rodgers, Think: A Biography of the Watsons and IBM (1969).

Additional Sources

Simmons, W. W. (William W.), Inside IBM: the Watson years: a personal memoir, Bryn Mawr, Pa.: Dorrance, 1988. □

Thomas John Watson 1874–1956, American industrialist and philanthropist, b. Campbell, N.Y. After rising from clerk to sales executive in the National Cash Register Co. (1898–1913), he became (1914) president of the foundering Computing-Tabulating-Recording Co., which made scales, time clocks, and tabulators that sorted information using punched cards, all forerunners of the earliest mainframe computers . The company was renamed International Business Machines Corp. (IBM) in 1924 and Watson became its chairman in 1949. Encouraged by his son, Thomas John Watson , Jr., he invested heavily in research and in the 1950s widened IBM's line to include electronic computers. At the senior Watson's death, IBM had assets of over $600 million and a world market of 82 countries.

Bibliography: See memoir by T. J. Watson, Jr., Father, Son & Co. (1990); biography by K. Maney (2003).