Tom Watson Sr. and Tom Watson Jr. Leadership
Tom Watson Sr. (1874-1956) and Tom Watson Jr.
Father and son who made the computer maker, International Business Machines (IBM) into a great
company. Tom Sr. is pictured right above.
Tom Jr. (pictured right) wrote the management classic, A Business and Its Beliefs, which discusses
the importance of corporate culture to business success
(see point 1 below)
Why were they great leaders?
1. Principles and objectives
They founded IBM on three values:
- the best customer service
- respect for the individual
- the pursuit of excellence.
They believed that they are vital but useless without being put into action by all
So IBM was one of the first companies to adopt Peter
Drucker’s (pictured right) idea of management by
objectives, giving all managers clear objectives to achieve IBM’s overall aims like increasing profit and
Tom Jr. had the vision and foresight to realize that IBM’s future lay in computers not in
its pre-war traditional business of
- punch card tabulating machines (used to summarize information).
2. Customer satisfaction
They both knew that IBM’s success depended on customer
satisfaction, so ,under Tom Sr., IBM was famous for its:
In 1935 it sold the first successful electric typewriter (pictured right).
Under Tom Jr. ,it also became renowned for its revolutionary computer technology, resulting
from huge spending on research and development (see point three).
3. Change and innovation
Tom Sr.’s motto for IBM was “think” - why?
He wanted everyone to:
- continually reflect upon what the company was doing and
- replace it with something new and better, particularly new
In 1964 Tom Jr. spent $5 billion developing a revolutionary and hugely successful range of six computers
(System/360 - Tom Jr. is pictured right with it),
He managed to encourage such innovation through:
- “contention management” that encouraged IBM managers to challenge one another;
- commitment to research and development
- paranoia about failure in a highly competitive industry.
- effectively communicating a sense of urgency.
As his father had remarked,
“It is harder to keep a business great than it is to build it”.
4. Great people and good organization
How did the Watsons ensure that IBM had able, loyal and motivated people?
a) recruitment and selection
They used an aptitude test, rarely used by other companies.
b) corporate culture
Their belief in respect for the individual.
c) tough but tender leadership
Tom Jr. was kind to ordinary employees but brutally tough on his top managers.
He even had to reluctantly fire his younger brother, Dick (pictured right), as head of
manufacturing for the System/360 project (see point 3) to ensure its success.
Tom Jr. motivated people with a decentralized organization structure by giving IBM’s
divisions freedom to achieve the objectives he set them.
IBM had strict rules about:
- office attire (white shirt, dark suit).
- no smoking and alcohol at work.
When asked about the reason for IBM’s success, he replied “the quality of our people”.
Tom Jr.’s experience as a pilot in the Second World War (pictured right):
- overcame his depression and self-doubt.
- gave him the confidence and maturity to be an even more
successful boss of IBM than his father.
Tom Jr. learned just as much from IBM’s product failures as its successes (like
computers), accepting his mistakes and working out why they happened.
Key quote on corporate
Beliefs must always come before policies, practices
and goals,Tom Jr.
Key quotes on business
To be successful, you have to have your heart in your business, and your business in your heart, Tom
If you want to succeed double your failure rate,Tom Sr.
It is harder to keep a business great than it is to build it,Tom Sr.
Key quote on
Nothing so conclusively proves a man’s ability to lead others as what he does from day to day to lead
Key quotes on
Once an organization loses its spirit of pioneering
and rests on its early work, its progress stops.Tom
Every time we’ve moved ahead in IBM, it was because someone was willing to take a chance, put his head on the
block and try something new.Tom Jr.
Key quotes on influencing
“Really big people are, above anything else, courteous, considerate and generous...to everyone all the
Clothes don’t make the man...but they go a long way to making a businessman.Tom Sr.
There doesn't seem to be any evidence for Tom Sr's famous 1943 quote:
I think there is a world market for maybe five computers.