Thomas J. Watson, Jr
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Thomas John Watson Jr. (January 14, 1914 – December 31, 1993) was an American businessman, political figure, Army Air Forces pilot, and philanthropist. The son of IBM Corporation founder Thomas J. Watson, he was the second IBM president (1952–71), the 11th national president of the
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(1964–68), and the 16th United States Ambassador to the Soviet Union (1979–81). He received many honors during his lifetime, including being awarded the
Presidential Medal of Freedom The Presidential Medal of Freedom is the highest civilian award of the United States, along with the Congressional Gold Medal. It is an award bestowed by the president of the United States to recognize people who have made "an especially merit ...
by
Lyndon B. Johnson Lyndon Baines Johnson (; August 27, 1908January 22, 1973), often referred to by his initials LBJ, was an American politician who served as the 36th president of the United States from 1963 to 1969. He had previously served as the 37th vice ...
in 1964. ''Fortune'' called him "the greatest capitalist in history" and ''Time'' listed him as 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, Thomas J. Watson, was dismissed from his job at software company NCR – an act which subsequently drove Watson Sr., to the foundation of the largest and most profitable
digital computer A computer is a machine that can be programmed to carry out sequences of arithmetic or logical operations (computation) automatically. Modern digital electronic computers can perform generic sets of operations known as programs. These program ...
manufacturer in the world, IBM Corporation. Two sisters followed Thomas Jr., Jane and Helen, before a final child, Arthur Kittredge Watson, was born. Watson Jr. was raised in the Short Hills section of
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. 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
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,
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factory) was at the age of five – and business tours to Europe and made appearances at annual gatherings for the company's elite sales representatives, the IBM Hundred Per Cent Club, 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, Watson suffered from
clinical depression Major depressive disorder (MDD), also known as clinical depression, is a mental disorder characterized by at least two weeks of pervasive low mood, low self-esteem, and loss of interest or pleasure in normally enjoyable activities. Intro ...
. Talking to a reporter in 1974, Watson 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 attended the
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in
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,
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. 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 graduated with a business degree in 1937. After graduating, Watson became a salesman for IBM but had little interest in the job. The turning point was his service as a
pilot An aircraft pilot or aviator is a person who controls the flight of an aircraft by operating its directional flight controls. Some other aircrew members, such as navigators or flight engineers, are also considered aviators, because they a ...
in the Army Air Forces during
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. His brother "Dick" (Arthur) Watson had dropped out of
Yale Yale University is a private research university in New Haven, Connecticut. Established in 1701 as the Collegiate School, it is the third-oldest institution of higher education in the United States and among the most prestigious in the wor ...
. Watson 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
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, who suggested that he should try to follow his father at IBM. Watson regularly flew Bradley, the director of lend-lease programs to the
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, to
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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

Watson became president of IBM in 1952 and was named as the company's CEO shortly before the death of his father, Watson Sr., in 1956. Up to this time IBM was dedicated to electromechanical
punched card A punched card (also punch card or punched-card) is a piece of stiff paper that holds digital data represented by the presence or absence of holes in predefined positions. Punched cards were once common in data processing applications or to di ...
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 computers. 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
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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 rather than 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 at that time 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, Louis V. Gerstner Jr. 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
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being 14.6% and that for
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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." In 1968, Tom Jr. fired computer scientist
Lynn Conway Lynn Ann Conway (born January 2, 1938) is an American computer scientist, electrical engineer and transgender activist. She worked at IBM in the 1960s and invented generalized dynamic instruction handling, a key advance used in out-of-or ...
because he feared the news of her transition would affect the company's reputation.


Research and development

Prior to his time, IBM had primarily emphasized the sales organization, with a reasonable range of products. Tom Jr., however, promoted a research and development structure. The first result of this was the
IBM 7030 Stretch The IBM 7030, also known as Stretch, was IBM's first transistorized supercomputer. It was the fastest computer in the world from 1961 until the first CDC 6600 became operational in 1964."Designed by Seymour Cray, the CDC 6600 was almost three t ...
program to develop a transistorized "supercomputer"; 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 was a decimal-architecture intermediate data-processing system that was introduced by IBM in 1958. 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 compa ...
and
IBM 7090 The IBM 7090 is a second-generation transistorized version of the earlier IBM 709 vacuum tube mainframe computer that was designed for "large-scale scientific and technological applications". The 7090 is the fourth member of the IBM 700/7000 se ...
for large government business and large businesses, the
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. Modified versions of the 1620 were used as ...
for smaller customers in the scientific community, and the
IBM 1401 The IBM 1401 is 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 unit record equipment for processing data stored on pu ...
for commercial use by smaller organizations. 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 Software is a set of computer programs and associated software documentation, documentation and data (computing), data. This is in contrast to Computer hardware, hardware, from which the system is built and which actually performs the work. ...
and used the same peripherals. 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.


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. This was said by him to be in order to be near his family in Connecticut. His first book in 1963 discussed his management philosophy.


Honors

Watson received the
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from the
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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 Baines Johnson (; August 27, 1908January 22, 1973), often referred to by his initials LBJ, was an American politician who served as the 36th president of the United States from 1963 to 1969. He had previously served as the 37th vice ...
in September 1964 awarded Watson the
Presidential Medal of Freedom The Presidential Medal of Freedom is the highest civilian award of the United States, along with the Congressional Gold Medal. It is an award bestowed by the president of the United States to recognize people who have made "an especially merit ...
, the highest award a U.S. President can bestow on a civilian. Watson was inducted into the
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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.


Retirement

Watson left IBM in 1971 on his doctor's advice after having a
heart attack A myocardial infarction (MI), commonly known as a heart attack, occurs when blood flow decreases or stops to the coronary artery of the heart, causing damage to the heart muscle. The most common symptom is chest pain or discomfort which ma ...
. After recovering, he was appointed by
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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
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, the last in 1991. Watson sailed one of his ''Palawans'' further up the Northern coast of Greenland than any non-military ship had done previously, receiving the
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's highest award and the
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's
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. He traveled the route of
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in exploring the Pacific. He flew helicopters, jets, and stunt planes, and was the first private citizen to receive permission from Soviet General Secretary 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.


Personal life

Watson married Olive Cawley (1918–2004) in 1941. They had six children. He had homes in
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,
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; North Haven,
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;
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,
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;
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,
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;
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; and Antigua. He died in Greenwich on December 31, 1993, of complications following a stroke. He was 79.


Philanthropy

Watson was the principal benefactor of the
Watson Institute for International Studies The Watson Institute for International and Public Affairs is an interdisciplinary research center at Brown University in Providence, Rhode Island. Its mission is to promote a just and peaceful world through research, teaching, and public engagement ...
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 Connecticut () is the southernmost state in the New England region of the Northeastern United States. It is bordered by Rhode Island to the east, Massachusetts to the north, New York to the west, and Long Island Sound to the south. Its capita ...
, which named the Olive and Thomas J. Watson Jr. Pavilion (a wing) after he and his wife. He was also the principal benefactor of Owls Head Transportation Museum in Owls Head, Maine. He was on the Board of Directors of the
Bedford Stuyvesant Restoration Corporation The Bedford Stuyvesant Restoration Corporation (or BSRC, referred to locally in short as Restoration) is a community development corporation based in Brooklyn, New York, and the first ever to be established in the United States. Background Dec ...
and helped bring a factory employing over 300 people to the community that made cables, including ones for the US space program.


Columbia University

After leaving IBM, Watson donated tens of millions of dollars to
Columbia University Columbia University (also known as Columbia, and officially as Columbia University in the City of New York) is a private research university in New York City. Established in 1754 as King's College on the grounds of Trinity Church in Manhatt ...
from 1975 onward. These included 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.


See also

*
History of IBM International Business Machines (IBM), nicknamed "Big Blue", is a multinational computer technology and IT consulting corporation headquartered in Armonk, New York, United States. IBM originated from the unification of several companies that w ...
* Smugglers' Notch Ski Resort


References


Further reading

*Rodgers, William; ''Think: A Biography of the Watsons and IBM'', Stein and Day, 1969 SBN 8128-1226-3 * Tedlow, Richard S. (2003). ''The Watson Dynasty: The Fiery Reign and Troubled Legacy of IBM's Founding Father and Son''. New York: HarperBusiness. *Watson Jr., Thomas J., (1963) ''A Business and its Beliefs – The Ideas that Helped build IBM (McKinsey Lectures)'', M–H, 1963, 107pp * * Watson Jr., Thomas J. (1993) ''Pacific Passage: A South Pacific Adventure with Sailor, Explorer, Aviator and Former IBM Chief Executive Tom Watson'', Mystic Seaport, 1993, 179pp (Originally published in 1980 as ''Logbook for Helen'')


External links


Oral history interview, April 25, 1985.
Charles Babbage Institute The IT History Society (ITHS) is an organization that supports the history and scholarship of information technology by encouraging, fostering, and facilitating archival and historical research. Formerly known as the Charles Babbage Foundation, ...
, University of Minnesota, Minneapolis. Interviewer was Arthur L.C. Humphreys
IBM biography of Watson Jr.
{{DEFAULTSORT:Watson, Thomas J. Jr. 1914 births 1993 deaths American aviators Brown University alumni Hun School of Princeton alumni IBM employees Businesspeople from Greenwich, Connecticut Businesspeople from Dayton, Ohio People from Millburn, New Jersey Presidential Medal of Freedom recipients United States Army Air Forces officers Ambassadors of the United States to the Soviet Union 20th-century American diplomats United States Army Air Forces pilots of World War II Blue Water Medal recipients American chief executives of Fortune 500 companies New York Yacht Club American technology chief executives 20th-century American businesspeople Presidents of the Boy Scouts of America Military personnel from New Jersey