(Today marks the 59th anniversary of the announcement of the IBM System/360 series)
Buy the book: Father, Son, & Co
When Tom Watson Jr was 10 years old, his father came home and proudly announced that he had changed the name of his company. The business that had been known as the Computing-Tabulating-Recording Company would now be known by the grand name International Business Machines.
“That little outfit?” thought young Tom to himself, picturing the company’s rather random-seeming collection of products, which included time clocks, coffee grinders, and scales, and the “cigar-chomping guys” who sold them. This was in 1924.
This is the best business autobiography I’ve read. It’s about Watson Jr, his difficult relationship with his father, the company they built, and the emergence of the computing industry. It is an emotional, reflective, and self-critical book, without the kind of “here’s how brilliant I was” tone that afflicts too many executive autobiographies. With today being IBM’s 100th anniversary (counting from the incorporation of CTR), I thought it would be a good time to finally get this review finished and posted.
Watson’s relationship with his father was never an easy one. From an early age, he sensed a parental expectation that he would follow his father into IBM, despite both his parents assuring him that this was not the case and he could do whatever he wanted. This feeling that his life course was defined in advance, combined with fear that he would never be able to measure up to his increasingly-famous father, was likely a factor in the episodes of severe depression which afflicted him from 13 to 19. In college Watson was an indifferent student and something of a playboy. His most significant accomplishment during this period was learning to fly airplanes—-”I’d finally discovered something I was good at”–a skill that would have great influence on his future. His first job at IBM, as a trainee salesman, did little to boost his self-confidence or his sense of independence: he was aware that local IBM managers were handing him easy accounts, wanting to ensure success for the chief executive’s son. It was only when Watson joined the Army Air Force during WWII–he flew B-24s and was based in Russia, assisting General Follett Bradley in the organization of supply shipments to the Soviet Union–that he proved to himself that he could succeed without special treatment. As the war wound down, he set his sights on becoming an airline pilot–General Bradley expressed surprise, saying “Really? I always thought you’d go back and run the IBM company.” This expression of confidence, from a man he greatly respected, helped influence Watson to give IBM another try.
The products that Watson had been selling, as a junior salesman, were punched card systems. Although these were not computers in the modern sense of the word, they could be used to implement some pretty comprehensive information systems. Punched card systems were an important enabler of the increasing dominance of larger organizations in both business and government: the Social Security Act of 1935 was hugely beneficial to IBM both because of the systems they sold to the government directly and those sold to businesses needing to keep up with the required record-keeping.
During the war, the first true digital computers were created. IBM partnered with Harvard University to create an electromechanical machine, programmed by punched paper tape, for the U.S. Navy; separately, the University of Pennsylvania built an all-electronic computer, the ENIAC, for the Army. ENIAC was fast by the standards of the day–5000 additions per second–it contained 18000 vacuum tubes, took up a lot of space, and consumed a lot of power. Neither Watson nor his father initially saw ENIAC as the sort of thing that would be useful for the typical business. Tom Jr did, though, soon develop an interest on the application of electronics to IBM’s business, albeit on a less-grandiose scale than that represented by ENIAC. After meeting an engineer who had hooked up a relatively simple assembly of electronics to a standard punched card machine, he pressed for the rapid commercialization of this technology. It was released, as the IBM 603 Electronic Multiplier, in September 1946. Its function was simple: it read a punched card, multiplied two numbers, punched the result back out on the same card, and kept on doing it, 100 times a minute–this was perhaps 5-10 times the speed of the earlier electromechanical multiplier. The fact that people were willing to pay $350/month to rent this thing (that would be the equivalent of about $3300/month in today’s money) illustrates how strong the need must have been for solutions to burdensome computational problems. The 603 was soon upgraded to the more capable 604, and several thousand of these systems were “sold” (IBM used the term “sold” even though its products were actually almost always rented.)
IBM’s first stored-program computer wasn’t announced until 1952; this was the IBM 701, which was given the patriotic name “Defense Calculator” for the purpose of warding off internal critics of the large investment required. Rental price was about $15000/month.
Watson gives considerable credit for IBM’s success with computers to several individuals within the company, including executive named Jim Birkenstock. As a young sales manager, Birkenstock had been spontaneously elevated to the position of general sales manager for the entire country by Watson Senior based on a single impressive presentation. Unsurprisingly, he was not a success in this job, and was demoted to running a market-research group called Future Demands. He was pretty demoralized by this fall; however, Tom Jr persuaded him to stay with the company, and Birkenstock, once he got over his initial self-pity, transformed Future Demands from a group concerned with keeping track of customer enhancement requests to “a watchdog of IBM’s future.” The Birkenstock story is an interesting example of the point that a person who is unsuccessful in one job can sometimes make very substantial contributions in a different one.
The elder Watson was not opposed to use the use electronics for computing; indeed, Tom Jr says that electronics was almost “the only major issue on which we didn’t fight.” When it came to the use of electronics for information storage, however, Mr Watson had serious reservations–he viewed the punched card itself as IBM’s Unique Selling Proposition, and believed that businesspeople would never tolerate their criticial information being stored invisibly on magnetic media. Large customers, however, were beginning to think differently. Metropolitan Life, for one, stated their unwillingness to continue to devoting whole floors of expensive Manhattan real-estate to the storage and processing of their immense punched-card files. The magnetic-tape-based IBM 702 was announced in 1953.
The tendency of companies to hold an excessive allegiance to technologies which have worked well for them in the past and with which they are strongly identified can be very strong–if Birkenstock, Tom Jr, and others had not made a strong effort to overcome this tendency and if Watson Sr had not allowed himself to be convinced, then business history would have been very different.
Even as IBM was growing into a very large company and Tom Jr was promoted to President, the father-son conflicts continued. On one occasion, they were arguing vehemently about something or other when Tom had to leave to catch a West Coast flight. On arrival at the airport, he found that his father had followed him there, unwilling to delay the argument. Tom Jr, never known for the ability to hold his temper, lost it pretty badly:
God damn you, old man! Can’t you ever leave me alone?
There were no phones on planes in those days, of course, and “that flight was the longest nine hours I’d ever spent in my life…When we landed I couldn’t wait to get to a phone to tell him how sorry I was.”
The government filed an antitrust suit against IBM, and Tom Jr was deeply involved in settlement negotiations. Just as he was about to go downtown for another session, his father flew into a rage and told him he was not competent to handle this sort of matter. Finally, Mr Watson told his son to go on to the meeting, but not to make any decisions.
I was so upset that I was shaking. I got to the courthouse and sat down at that long table. I didn’t say much to anybody because I was so tense.
His father’s secretary came into the room and handed him a note, which Tom Jr accepted expecting the worst. But it said:
In the early 1960s, IBM decided to adopt a new architecture which would obsolete all of its existing product lines and replace them with a single compatable family–the System/360 series–spanning a wide price and performance range. This was very much a bet-your-company decision by Tom Jr, as much as the decision to expand production during the Depression had been a high-risk decision by his father, and he vividly describes the problems and the tensions involved in this program. Unfortunately, during this period Watson made the unwise decision to put his brother Dick in charge of the company’s technology and manufacturing operations. Although Dick…”a merry fellow”…had many strengths, this job did not match them very well, and he eventually had to be removed.
I felt nothing but shame and frustration at the way I’d treated him. There were so many other ways to have managed things. Perhaps the wisest course would have been to leave Dick in World Trade. He would have been known as the great IBM internationalist…As it was, we remade the computer industry with the System/360, and objectively it was the greatest triumph of my business career. But whenever I look back on it, I think about the brother I injured and the dream of my father’s that I could never make come right.
After retirement from IBM, Watson served as US ambassador to the Soviet Union, continuing his lifelong interest in that country and its people.There’s a lot in this book…descriptions of some amusing incidents from Watson’s college years (like the friend who was too lazy to feed his dog and got the animal a meal ticket at a local restaurant), a portrait of IBM’s sales culture (company songs!), discussions of various business and management issues and how they were handled, and information about many historical IBM products and projects, including the remarkable SAGE air defense system of the mid-1950s. There are 449 pages, and not many dull ones. Highly recommended.
In another book that I can’t locate at the moment, someone asserted that Thomas Watson Jr “was not a very nice man.” It may be the case that Watson was not a nice man, but in the present book he certainly comes across as a complex, thoughtful and interesting one.