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Thomas J. Watson Sr.: International Business Machines Corp.
William Wrigley Jr.: William Wrigley Jr. Co.
Andrew Carnegie: Carnegie Steel.
NO STONE LEFT UNTURNED: HUSTLING HARD WORKERS.
Sam Walton: Wal-Mart.
Mary Pickford: United Artists.
Edwin Land: Polaroid Corp.
William S. Paley: Columbia Broadcasting System.
THE THOUGHTS THAT COUNT: SELF-MADE SUCCESSES.
John D. Rockefeller: Standard Oil Co.
Henry Ford II: Ford Motor Co.
Madame C.J. Walker: Madame C.J. Walker Manufacturing Co.
A.P. Giannini: Bank of America, Transamerica.
THE BUCK STOPS: BOSSES.
Harvey Firestone: Firestone Tire & Rubber Co.
J. Paul Getty: Getty Oil.
Alfred P. Sloan Jr.: General Motors.
David Packard: Hewlett-Packard.
NO MATTER WHAT EVERYONE ELSE IS DOING: MAVERICKS.
Herb Kelleher: Southwest Airlines.
Clarence Birdseye: Birdseye Foods.
Margaret Rudkin: Pepperidge Farm.
Ted Turner: Turner Broadcasting System.
Every summer, the National Cash Register Company hosted a celebration of its top salesmen called the Hundred Point Club Convention, named for the fact that every invited guest had completely filled his annual quota. It was a week off from work to talk about how exciting it was to work— at NCR. At the culmination of the 1913 convention, an assistant sales manager named R. H. Grant delivered a typical speech for the Hundred Pointers. It was followed by a truly rousing speech by the company's popular sales manager, Thomas J. Watson, who concluded to a burst of noisy applause from the salesmen in the audience. Before the applause could even crest, though, the president of the company, John Patterson, hurried to the podium and quieted the audience. He wanted to use that moment to say how very much he had enjoyed the speech made by R. H. Grant. But Grant had spoken before Watson: For the audience, it seemed a quirky oversight, a bit of confusion. To those onstage, though, there was no confusion, only shock. Patterson had just let Thomas Watson know that his career at NCR was at a close.
At forty, Watson had been working at NCR for eighteen years. His attachment to the company had an almost Dickensian cast: NCR had picked him up when he was a veritable orphan of business and he had proved himself deserving of every opportunity offered, every chance to learn from the company and improve himself toward its model. He knew the company could be cruel, but that fact had never scared him— until the end of his speech at the Hundred Point Convention in 1913.
Before arriving at NCR, Thomas Watson had made his start in sales by peddling pianos door-to-door in the farm district near his hometown of Painted Post, New York, where his father was a lumber dealer. As a young man, Watson was both honest and industrious, two qualities he felt sure would bring him a fortune as a salesman. After a series of setbacks, however, he began to realize that there was even more to it.
While returning a cash register left over from yet another failed business— a butcher shop— Watson managed to talk himself into a job at NCR's Buffalo sales office. He soon talked like an NCR man, he thought like one, he dressed like one, and what is more, he succeeded as one. At twenty-eight, he was named to an executive post at the home office in Dayton, Ohio. John Patterson rewarded Watson's loyalty with a swank Pierce-Arrow car and, later on, with the use of a house adjacent to his own.
But Patterson, for all his brilliance, was like some mythological creature who gave life to heroes only to destroy them when they grew to equal him. He nurtured a strong roster of executives through the years, and clashed with any who became too powerful or charismatic. Those who did either were cut or left under fire. As sales manager at NCR, Thomas Watson did an excellent job. That ought to have worried him.
Early in 1913, twenty-two NCR executives had been found guilty of violating the Sherman Antitrust Act. Both Patterson and Watson were among them, each facing a sentence of one year in jail.
Eventually Patterson welcomed a deal by which sentences would be waived for those executives admitting culpability. All but three joined him in signing; one of those who refused was Thomas J. Watson. Maintaining that he had done nothing wrong, he chose to pursue an appeal, with the specter of jail time if he lost. Such bravado did not please John Patterson.
On one occasion, Patterson fired an executive by sending him out on an errand: When the man drove back up to the building, he noticed that his desk and chair were on the front lawn. On cue, the desk burst into flames. The man simply drove away. In Watson's case, Patterson was openly insulting in the months following the Hundred Point Convention in June 1913, and then in November, he came right out and demanded a letter of resignation. Watson was no longer an NCR man. At forty, the most vivid possibility in his future was jail time.
For months, Watson did not work at all. The authors of a 1960 biography simplified the crucial juncture almost to the point of unintended pathos: "Other than a vision of greatness, Watson had no concept of what he wanted to do." The same could be said of many job seekers, but Watson had far better credentials than most. He still believed in Patterson's sales methods— but believed he could better them. He still believed in John Patterson, too, but was ready to outgrow his former mentor, however unwillingly at first.
Thomas Watson was lanky in build. Disdaining sports of any kind, he carried himself with more dignity than vigor, remaining unmussed whatever the conditions and however long the day. His face could be severe, his thin features and small, dark eyes bearing down sharply. In fact, he had an engaging personality, not necessarily through humor, which colored his outlook only faintly, but through his very earnestness. His seminal traits— temper and warmth— might have come from the opposite ends of some personalities, but not in such an earnest man. Often compared to a minister or a deacon, he consistently exuded the impression that he cared. He cared about his work, he cared about his workers as individuals, he cared about the whole world. The job Watson needed was one that required a management executive with the instincts of a mother dog.
Charles Flint, the financier who credited himself with inventing the conglomerate, had patched four vaguely related businesses into the Computing-Tabulating-Recording Co. (C-T-R) in 1911. Three years later, the company was foundering, barely able to carry its own massive debt. After a three-day interview, Flint hired Watson to lead C-T-R, overcoming the objections of at least one board member who inquired testily as to who would run the company while Watson was in jail. Watson had his opportunity, though a wobbly one: The job agreement contained the humbling provision that he could not officially become president until his criminal charges were settled. Only months before, he had been second in command at the one of the nation's champion companies.
C-T-R made a pale comparison. It was small and obscure, a pile of jagged shards getting along neither within themselves nor among themselves. The similarity between it and NCR lay in the product lines. Each were pioneers in commercial control: NCR registered sales. C-T-R registered time (International Time Recording Co. and Bundy Manufacturing), bulk inventory (Computing Scale Co.), and information (Tabulating Machine Co.). The tabulating machine sorted punched cards that stored data and kept track of that data at the same time. Punch clocks may have been of intimate interest to Watson, a man who devoted hours to contemplating the word minute, but the tabulator was the most potent of all the company's products. It didn't count minutes, but saved them, and Watson knew from his contemplations that in his age, in any age, saving time is where the money is. One of Watson's long-term missions would be to fit tabulating machines into ever smaller businesses.
As the nominal president of C-T-R, however, Watson did not fit into his own company very well at first. For a year, he served the strange sentence meted out by his antitrust case: a presidency paled by uncertainty regarding his future. Finally, in May of 1915, Watson received a telegram saying that his guilty verdict had been set aside. Within days, he was named president, fully and officially.
Upon arriving at C-T-R, Watson had been expected to duplicate NCR's approach, and he did, especially in basic sales methods and in his cultivation of international operations, an emphasis that resulted in the company's 1924 name change to International Business Machines. As at NCR, employees were expected to enhance the company's reputation by leading respectable lives. Watson viewed himself and every other employee as ambassadors for IBM, not merely during work hours but all the time. Conservative dress became symbolic of the company's prescribed image: Even machine oilers at the main factory in Endicott, New York, felt compelled to wear white shirts and ties to work, changing into overalls only within the building. Watson also expected IBM employees to marry well, live in good neighborhoods, drive late-model cars, contribute to their communities, attend church, and conduct themselves soberly at all times. In fact, drinking was prohibited on company time and smoking was banned in most company offices.
Most employees responded to the policies the way Watson had responded to NCR: They were glad to belong to an organization they considered worth belonging to. At its worst, however, Watson's imitation of NCR's uniform image resulted in a prejudice against hiring salesmen, in particular, of differing ethnic backgrounds.
As Watson shaped his new company, pulling it together and pushing it forward, he reverted to his own basic instincts, those of an upstate piano salesman who was honest and industrious— callow, but determined to learn. Watson created an educational complex underscored by his own edict: Serve, don't just sell. Watson's attitude was that IBM should have the better product and the better sales technique: if it did not, then the other company deserved the sale. That didn't happen often: Throughout most of its history, IBM controlled on average eighty-eight percent of the market for punch card tabulators.
Singed, and almost consumed, by Patterson's heedless emphasis on growth, Watson created IBM as an equally aggressive company, but one with a sense of perspective about success. He wanted it to be decent, at a time when many companies were rapacious. Executives and salesmen were encouraged to believe that the company would not let them down or lay them off.
If Watson's response to prosperity was expansion, his response to adversity was expansion on an even grander scale. In the worst days of the Great Depression, when IBM's sales drooped, Watson didn't fire salesmen— he hired them, by the hundreds. "You know," he said at the age of fifty-eight to a businessman who mocked his response to the downturn, "when a man gets about my age, he always does something foolish. Now some men run to playing poker and others to horse races, some to ladies and one thing and another. My hobby is hiring salesmen."
During World War II, Thomas Watson's support was instrumental in creating one of the first practical computers, the Mark I, a navy project developed in partnership with Harvard University. After the war, though, Watson regarded the computer as nothing more than an interesting but impractical and unremunerative advancement on the tabulator. His son, Thomas Jr., proved more visionary. As the only junior executive who could— occasion Jr.ly— win an argument with Thomas Sr., he was responsible for IBM's slightly delayed entry into the commercial development of the computer in 1948. Blunt-spoken and amazingly clear-sighted, Thomas Jr. would lead IBM through its greatest era of growth from 1952 through his gradual retirement in the early 1970s. Even more impatient than his father, "Young Tom" succeeded as a manager because he was as honest about his own limitations as he was about everyone else's. Thomas Sr. was no less successful, yet he could not quite see limitations. Or at least he kept his eyes from looking.
Advancing IBM's growth through the 1950s, Thomas Watson Sr. expanded into a public figure, almost a statue of American enterprise, with a marblelike polish. Early in his rise as a public figure, he became known for his liberal outlook, as one of the few industrialists to wholeheartedly support Franklin Roosevelt and his New Deal business controls. Watson also worked intensively for world peace.
As it turned out, IBM benefited magnificently from Roosevelt's New Deal, receiving the contract to supply data processing equipment for the newly formed Social Security Bureau in 1935. As for world peace, it was— if nothing else— noticeably profitable for IBM, a company with operations in seventy-nine countries by 1940. But those are cynical attitudes. Had Thomas Watson Sr. been a cynical man, he would have pleaded guilty in 1913 to something he believed he did not do. But then, IBM would not have existed at all if Thomas Watson had been a cynical man.
In the words that follow, Thomas J. Watson Sr. comes through with some of the gusto he must have imparted at his favorite events, IBM conventions and sales meetings. The points he makes spark individual potential without compressing anyone into a set pattern. Watson knew how to be an employee— he'd dealt with his own share of difficult bosses— and he knew how to be a boss as well, but what he mostly liked to speak about was salesmanship. He credits enthusiasm as the most important asset in sales, and shows how to cultivate it step by step. One step in the process became Watson's most famous dictum of all:
IN THE WORDS OFThomas J. Watson Sr.
PerspectiveIn any job, there are two things to learn: first, the routine methods to be gone through; and second, the reason for it all. Many men fail, because they never learned the mechanics of their work properly. But a greater proportion fail because they never truly find out what their jobs are all about, and how their day's work ties in with the big plan of what their company is trying to do.
CharacterCharacter should never be confused with reputation. It is not a matter of externals.
LeadershipThe farther we keep away from the "boss" proposition— of being the "boss" of the men under us— the more successful we are going to be. If a man cannot be a real assistant and furnish assistance to the men under him he has no business being over men at all. That is not one of our problems [at IBM], but it does exist in many places throughout the country, where a man, because of his impressive title, assumes the attitude of a "boss" and tells people what to do, instead of helping them to do it.
Really successful men are pushed up, not pulled up.
GoalsWhatever is the best thing for the business is the best thing for the men in it. Let us keep that in mind— what is the best thing for the business is the best thing for everybody in it.
Outlook[In 1932, when Watson was fifty-eight, he made a differentiation between actual age in business and heart-age.]
ManagementMy duty is not the building of this business; it is, rather, the building of the organization. The organization builds the business.
It does not take executive ability to discharge a man, but it does take it to develop men.
Motivation —Enthusiasm[In 1915, one year after Thomas Watson joined C-T-R, he made a speech at one of the company's divisions, International Time Recording Co. (ITR). Watson's talk was typical of his motivational style, and is quoted at length.] It is easy to say "Work," to a man, but you must give him something besides that. There is something which makes a man want to work. It is enthusiasm. You never saw a lazy man in your life who was enthusiastic. You never saw an enthusiastic man who was lazy. If we have enthusiasm, we want to work. As we are talking about success, let us apply it to the ITR business; if we work we know we shall be successful. We know that if we have the enthusiasm, we shall want to work, and that will make us successful.
Motivation —Knowledge[Watson explained in his speech how to acquire the type of knowledge that leads to enthusiasm.]
Motivation —Thinking[Watson went on to explain what was, perhaps, his favorite theme.]
[Thomas Watson traveled tirelessly to spend time in IBM offices throughout North America and Europe, speaking with employees informally or in the banquet atmosphere so familiar within the company culture. Even as an elderly man, he maintained the rigorous schedule, often visiting two or three different offices a day for weeks on end. His own unceasing motivation obviously had a great deal to do with enthusiasm, as was revealed in an impromptu remark he made at the end of speech in 1929.]
I am sorry I cannot talk to you all day. The IBM means so much to me that I could stay here for twenty-four hours and talk about it.
Innovation[Watson expected every employee to stay alert for chances to help the company.] When you get suggestions, as you must, from the manufacturers and the merchants with whom you come in contact, and they say, "If you had a Time Recorder that would do so-and-so—," and the idea sounds absolutely ridiculous and foolish to you, make a note of it and send it to the factory. Let our talented inventors decide whether it is impossible or not. That is their business. That is why we keep them here, and we are willing to keep twice as many as we have here now; if you will furnish the thoughts, we will let them work out the ideas. We must progress and we can't do it in any other way.
Time ManagementYou carefully count and check your dollars, but do you count and check with equal seriousness that indispensable possession that is so necessary for the acquisition of dollars— time?
Check up each day the amount of time you spend in your prospects' stores or with merchants in your office. It is the length of time you stand up in front of a retail merchant who needs a scale, talking and demonstrating scales to him, that constitutes your work ...
Keep check on yourself by jotting in a little memorandum book the actual time you spend talking scales. At the end of the first week you probably would say to yourself that you are ashamed of the record, of the small number of hours actually put in in the sort of work that earns commissions. Soon you will double your efforts and your income will grow accordingly.
That doesn't mean you will be working harder— only more systematically. It means you will have learned how to organize yourself.
InvestingI suggest that you pick out five successful companies with good earnings. See what each of them has been doing in the way of building up its business and building up its earning power during the past seven years. Then make up your mind that just as soon as you can get money enough you are going to buy shares of stock in one of those companies. Then add to this as you can, keep on buying in one or more or all five of those companies, and say to yourself that you are not going to sell those shares when their value increases.
DiligenceI don't want any of you to go away feeling that we are urging you to work too hard. We do not advocate that. We simply want you to use good judgment. We don't want any man to do anything in the interest of this company that would in any way interfere with his health or comfort or personal privileges. We simply ask for an honest effort.
Efficiency[At IBM, Watson banned smoking and drinking on company time, and he often made mention of the connection between healthy habits and job performance.]
Taking OrdersI can recall many times when I resented supervision from my superior officers. That cost me money. It will cost any man money. A good thought for anybody who is being supervised to bear in mind is that the man who cannot accept supervision profitably will never find himself in a position to supervise others. None of us can escape supervision. The president and general manager of every concern are supervised more closely than the salesmen. Keep that in mind when you get a criticism from any of the executives of your company. Instead of resenting it, analyze and turn it to your benefit.
Giving OrdersMen in the field, as well as men in the office or factory, should be given every opportunity to solve their own problems and overcome their difficulties. If they make a mistake and admit it, forgiveness should be automatic. But the same mistake must not be made a second time.
You should always be fair with your salesmen because they are always alone in their field and meet people who have a great habit of saying "No." Let them discuss matters with you and try to help them.
Self-appraisalYou often hear men say, "Well, my record is as good as the average." When a man says that he is paying himself no compliment at all.
SalesmanshipIf a prospect asks about some other make of machine tell him that you know very little about it. Tell him that Mr. Blank over on Main Street is the agent, and should be able to answer questions, because he sells that product. You are there to talk International.
Whether we are selling scales, time recorders or tabulating machines, we prove our case by getting the prospect to figure out the actual savings that we can effect.
Very often it is one single word used in your approach that opens up the proper contact between you and the prospect. If a Dayton Scale salesman introduces himself with the words, "I represent the Dayton Scale Division of the International Business Machines Corporation," it makes the merchant think beyond our scale division ...
Human nature, you know, is the same the world over. We all like to be identified with important things.
Cover every point of your equipment in talking about it. Don't dwell on any one thing. Explain the entire subject to the prospect.
PersonalityAlways remember that your personality is your big asset. Do not try to emulate another person. Present your proposition in your own natural way, always keeping your personality behind your product. Some men get their personalities between their product and the prospect by dressing flashily or doing something unusual to attract attention. Such conduct only kills business. Real personality comes from the heart. Many salesmen fail because they strive to do something unique to make people look at them when they come in. This may attract attention but it is detrimental to the proposition they are coming to present. When you talk in an unusual manner or try to imitate someone else, you are not acting naturally and the prospect feels that at once. He begins to think about you, wondering why you introduce yourself in such fashion. Then he forgets about the wonderful accounting aid you are bringing him. So forget yourselves and become enthusiastic about your product.
PersistenceIt does not require a genius to find the people who need these machines. Walking and talking are all that is necessary. These are the two things we must do. Most of us can talk, but some are a little shy on the walking. Whether you use a motor car or your feet, the main thing is to cover ground and keep moving from the time you start out in the morning.
My manager used to say: "There are only two classes of people who never change: fools and dead people." That is pretty true. Keep track of those fellows who say "No," today, because next week, next month or next year they are going to say "Yes," to somebody who is selling our kind of goods.
Sales ChallengeThat word "why" is one of the strongest words in the selling language. When some man tells you that he doesn't want the machine you are selling, ask him why, and let him answer before you start telling him why he ought to have it.
DutyYou sometimes hear people criticize various sales methods. They object to the so-called strong-arm method of selling or to what they call high-pressure salesmanship. Do not listen to that. What they really mean is that you have a group of salesmen who hang on to their prospects until they get the order and bring it home. That is what you employ them for. If they are selling an article of merit, it is their duty, as salesmen, to use every conceivable argument they can that is honest to convince the prospect that he ought to sign the order. That is the only way your business can run....
WorkingIf you do not enjoy your surroundings and associations, my advice is to change your work. Some years ago, a man who was rooming with me remarked that I was very happy in my work and that he wished he were happy in his. I told him that if I could not be happy in my work, I would not work.
SuccessNever think of this business as being a successful one. It is not. It is merely succeeding, going a little farther each year in its endeavor to succeed. Whenever an individual or a business decides that success has been attained, progress stops.
Self-developmentWhen you learn to supervise yourselves, you attract favorable attention and are ready to supervise others. "Self supervision is the best supervision." Develop your initiative— do something that no one else has done. Think of something that should be done in our business and tell us about it. Spur us on to do more in the way of developing better machines and better men in IBM.
HiringThere was a time when I thought I could look a man over and decide from his appearance, personality and conversation whether he would be a success or a failure. That theory was exploded years ago.
EducationTeaching is of no value unless somebody learns what is being taught.
Business ViewpointEarly in our work we learned that business is a vast school, parading its problems before our eyes and waiting for an answer.
PromotionsWhen a man is given a promotion his responsibility has been extended, and the first thing for him to do is to worry over it instead of taking a great deal of pride in his new power. His first duty is to sit down and to think seriously about his responsibility and how he can aid his co-workers who in time will be doing bigger things in our business. It does all of us good to worry a little about how we are going to take care of our jobs.
PrioritiesI started as a salesman and they call me "President" now; but I call myself "salesman," and I will never let my thoughts get away from selling and from the conviction that my duty is selling. When any man in any business moves up from the selling to other positions and loses sight of the importance of selling, advertising, and sales promotion generally, he is going the other way— he isn't going up; he is going down. He may not know it but he will soon find out.
CharacterIf we have anybody in any department— sales, factory or office— who we discover is a man of real character but does not display good manners, we must get rid of him and give the job to somebody who does possess those qualities. Then we will have a real organization. Of course, we must always set the right kind of example all the way along the line as to character and good manners. Then you can teach the men anything, because they are with you, they will listen to you; they are not trying to show off or be smart. They get right down to business.
IntegrityJust be honest with yourself and you will not have to worry about being honest with anybody else.