THOMAS JOHN WATSON JR. (January 14, 1914 – December 31, 1993) was
an American businessman, political figure, and philanthropist. He was
the 2nd president of
IBM (1952–1971), the 11th national president of
Boy Scouts of America (1964–1968), and the 16th United States
Ambassador to the
Soviet Union (1979–1981). He received many honors
during his lifetime, including being awarded the Presidential Medal of
Lyndon B. Johnson in 1964. Watson was called "the greatest
capitalist in history" and one of "100 most influential people of the
* 1 Early life
* 3 Research and development
* 4 Organizational structures
* 5 Honors
* 6 Retirement
* 7 Philanthropy
* 8 See also
* 9 References
* 10 Further reading
* 11 External links
Thomas Watson Jr.
Thomas Watson Jr. was born on January 14, 1914, just before his
father was dismissed from his job at NCR . Then two sisters were born,
Jane and Helen, before the youngest child, Arthur Kittredge Watson ,
was born. He was raised in the Short Hills section of Millburn, New
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 Dayton
Ohio factory) was at the age of five — business tours to Europe
and he made appearances at
IBM Hundred Per Cent Club meetings (annual
gatherings for the company's elite sales representatives), 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, Tom Jr. suffered for six years with what
might now be called clinical depression . :32
Talking to a reporter in 1974, Watson Jr. 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." :ix
Watson Jr. attended the
Hun School of Princeton in Princeton , New
Jersey . 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 obtained a business degree
in 1937. He married Olive Cawley (1918–2004) in 1941. They had six
After graduating Watson became a salesman for IBM, but had little
interest in the job. The turning point was his service as a pilot in
the Army Air Force during
World War II
World War II . Brother "Dick" (Arthur)
Watson had dropped out of
Yale as a Major in Ordnance. Tom Jr. 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 Follett Bradley , who
suggested that he should try to follow his father at IBM. Watson
regularly flew Bradley, the director of lend-lease programs to the
Soviet Union , to
Moscow 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
Watson became president of
IBM in 1952 and was named as the company's
CEO shortly before his father's death in 1956. Up to this time
dedicated to electromechanical punched card 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
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 Oak
Ridge National Laboratory to determine if there was a market,
predicted "... he could find customers for as many as thirty
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
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
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 not 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
IBM was only spending 3% on research and development 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, Gerstner only dropped it to 6%) —
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 Canon being 14.6% and that for NEC 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
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."
RESEARCH AND DEVELOPMENT
Of the two brothers, Tom Jr. made the most obvious impact on
IBM as a
whole, while Dick ran the international business.
Prior to his time
IBM had primarily emphasized the sales
organization, with a reasonable range of products. Tom Jr., however,
promoted the research and development structure that is essential to
modern high technology industry. It was under his supervision that the
laboratories were built up, to a point where, in the late 1980s, they
contained Nobel Prize winners; and to the point where the research and
development function could stand on an equal footing with marketing,
true to his original objective.
When Tom Jr. started this process in 1949,
IBM was reportedly two
years behind its main competitor,
UNIVAC . In the 1980s, it was
arguably up to a decade ahead of anyone else; though its problems
since seem to have destroyed much of its strength in this area. This
was not so obvious to the outside world, because the new products
still followed the conservative release pattern started in the 1920s
(and pursued very profitably until recently). Despite the hype about
'pre-releasing' products which did not yet exist, only when the market
was sufficiently developed, and a launch was financially justifiable,
IBM commit its marketing resources. In the labs though, they were
able to plan speculatively for the future decades in advance,
independent and untroubled by commercial demands. It was an ideal
environment for an industrial researcher, and highly productive for
The first result of this was the
IBM 7030 Stretch program to develop
a transistorized "supercomputer" a hundred times more powerful than
the vacuum tube 704. 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
IBM 7070 and
IBM 7090 for large government business, the
IBM 1620 for the scientific community and the
IBM 1401 for commercial
use. 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 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.
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
* Federal Systems Division — selling to (and servicing) the US
* 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
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
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. He lived in Connecticut, where
taxes were lower; but kept his staff across the border in New York
State so, it has been suggested, that
IBM would not be seen as
similarly evading taxes. Cynics said it was his fear of nuclear
warfare (he owned a fallout shelter ).
His first book in 1963 discussed his management philosophy.
Watson received the
Silver Buffalo Award from the Boy Scouts of
America 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
Lyndon B. Johnson in September 1964 awarded Watson the Presidential
Medal of Freedom , the highest award a U.S. President can bestow on a
Watson was inducted into the
Junior Achievement 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 .
Watson with Jimmy Carter, January 20, 1978
IBM in 1971 on his doctor's advice after having a heart
attack . After recovering, he was appointed by
Jimmy Carter 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
He was an avid sailor and pilot. He named 7 successive sailboats
Palawan , the last in 1991. Watson sailed his sailboat Palawan
further up the Northern coast of Greenland than any non-military ship
had done previously for which he won the
New York Yacht Club 's
highest award and the
Cruising Club of America 's
Blue Water Medal .
He traveled the route of
Captain Cook in exploring the Pacific. He
flew aircraft from helicopters and jets to stunt planes and he was the
first private citizen to receive permission from Soviet Premier
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.
Watson had homes in Greenwich ,
Connecticut ; North Haven ,
Vermont ; Vail ,
New York City
New York City ; and
Antigua . He
died in Greenwich on December 31, 1993, of complications following a
stroke . He was 79.
Thomas J. Watson
Thomas J. Watson Jr. Pavilion at Greenwich Hospital
Watson was the principal benefactor of the Watson Institute for
International Studies 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 , which named
the Olive and
Thomas J. Watson
Thomas J. Watson Jr. Pavilion (a wing) after him and his
wife. He was also the principal benefactor of Owls Head Transportation
Museum in Owls Head,
After leaving IBM, Watson donated tens of millions of dollars to
Columbia University from 1975 onward. These included a library, the
Thomas J. Watson
Thomas J. Watson Library of
Business and Economics, and several
smaller building grants.
Watson funded a Columbia East Campus residence hall named Watson
House . The house became a landmark on campus and is one of the most
coveted places for undergraduate seniors to live. In honor of Watson,
the 2006-2007 residents of Watson House opened up a small snack shop
called "The Watson Joint" emblematic of Watson's business principles.
The House organizes an annual trip to the Watson Estate in Maine.
* Scouting portal
* History of
* Smugglers\' Notch Ski Resort
* ^ "TIME 100 Persons Of The Century".
Time Magazine . June 14,
1999. Retrieved June 1, 2010.
* ^ Staff. "
Thomas J. Watson
Thomas J. Watson Jr.; Led
IBM Into Computer Age", Los
Angeles Times , January 1, 1994. Accessed June 2, 2016. "Raised in
Short Hills, N.J., and attending private schools, he called himself a
privileged and unimpressive youth."
* ^ A B C D Thomas J. Watson; Peter Petre (1991). Father, Son & Co:
my life at
IBM and beyond. Bantam Books. ISBN 978-0-553-29023-3 .
* ^ A B "Lieut. T. J. Watson Jr. Weds Olive Cawley In the Post
Chapel at Fort McClellan".
The New York Times
The New York Times . December 16, 1941. Her
husband, who is attached to the 102nd Observation Squadron, Was
graduated from the Hun School in Princeton, N. J., and in 1937 from
* ^ A B Steve Lohr (January 1, 1994). "Deaths: Watson, Olive
The New York Times
The New York Times . Retrieved June 2, 2010.
* ^ David Steuart Mercer (March 22, 1987). IBM: How the World\'s
Most Successful Corporation is Managed. Kogen Page Ltd. ISBN
978-1-85091-287-3 . Archived from the original on October 3, 2006.
Thomas J. Watson
Thomas J. Watson (April 25, 2003) . A business and its beliefs:
the ideas that helped build IBM. McGraw-Hill Professional. ISBN
* ^ "30 Awarded Medal of Freedom by President".
Chicago Tribune .
September 15, 1964. Retrieved June 1, 2010.
* ^ "30 Receive Freedom Medal at the White House; They Are Praised
by Johnson as He Confers the Highes Civilian Recognition". The New
York Times. September 15, 1964. Retrieved June 1, 2010.
* ^ "
Thomas J. Watson
Thomas J. Watson Jr.
IBM Corporation". U.S.
Business Hall of
Fame Laureate Archive. Junior Achievement. Retrieved June 1, 2010.
* ^ "Thomas J. Jr. Watson". Franklin Laureate Database. Franklin
Institute. Retrieved June 1, 2010.
* ^ "
Thomas J. Watson
Thomas J. Watson Jr. got his job from his father, but built