Thomas J. Watson

Lore & Background

Thomas J. Watson was born in Campbell, New York, the only son among five children. He worked on the family farm and attended Addison Academy. After a brief, unsuccessful stint as a teacher, he studied accounting at the Miller School of Commerce and then worked as a bookkeeper and later as a traveling salesman of organs and pianos. A period of hardship followed: he was fired from a sewing-machine job after his horse and samples were stolen while he was drunk, then lost money in a butcher shop that failed. In 1896, he joined NCR as a sales apprentice under John J. Range, who became a mentor. Watson became the top salesman in the East and later ran NCR's Rochester agency, where he used aggressive tactics—including sabotage—to create a local monopoly. In 1912, NCR was convicted of antitrust violations; Watson and others were sentenced to a year in prison, but the conviction was overturned on appeal in 1915.

In 1914, Charles Ranlett Flint hired Watson as general manager of the Computing-Tabulating-Recording Company (CTR). Watson became president in 1915 and renamed the company International Business Machines (IBM) in 1924. Under his leadership, revenues doubled within four years to $9 million, and by his death in 1956, IBM had 72,500 employees and revenues of $897 million. Watson also served as president of the International Chamber of Commerce in 1937, advocating 'World Peace Through World Trade.' That same year, he met Adolf Hitler in Berlin and received the Order of the German Eagle. He later attempted to return the medal, first in 1940 on the advice of Secretary of State Hull, and then successfully in June 1940 after Hull withdrew his advice. During World War II, IBM's German subsidiary Dehomag continued operations, and IBM headquarters maintained legal authority over it through managers in neutral Switzerland.

Reader's Guide

Thomas J. Watson's significance lies in his transformation of IBM from a modest conglomerate into a dominant force in data processing, largely through punched card tabulating machines. His management style, shaped by NCR's John Patterson, emphasized a strong sales culture and corporate loyalty. However, his legacy is complicated by IBM's profitable dealings with Nazi Germany. Watson authorized providing data processing solutions to the Nazi regime throughout the 1930s and until the end of World War II, profiting from both German and American war efforts. A 2001 book by Edwin Black claims Watson personally approved the strategic technological relationship that supplied the tabulating equipment used to identify and round up Jews. While Watson saw himself as a promoter of international peace through trade, his actions enabled a regime that committed genocide. The federal government filed an antitrust suit against IBM in 1952, when it controlled over 90% of U.S. tabulating machines. Watson died one of the richest men of his time, leaving a company that would dominate computing for decades.

Did You Know?

• Watson gave up his first job—teaching—after just one day.
• He was convicted in 1912 for illegal anti-competitive sales practices at NCR, but the conviction was overturned on appeal in 1915.
• Watson received the Order of the German Eagle from Nazi Germany in 1937 and returned the medal in June 1940.
• IBM's German subsidiary Dehomag continued to receive punch cards from IBM subsidiaries in occupied Europe during World War II.

Notable Quotes (Wikiquote)

"Thomas John Watson, Sr. (February 17, 1874 – June 19, 1956) was the president of International Business Machines (IBM), who oversaw that company's growth into an international force from the 1920s to the 1950s." — Thomas J. Watson "Nothing so conclusively proves a man's ability to lead others as what he does from day to day to lead himself." — Thomas J. Watson "Watson (1939) in: American druggist Vol 100. p. 40." — Thomas J. Watson "If you want to succeed, double your failure rate." — Thomas J. Watson