Thomas John Watson Jr. (January 14, 1914 – December 31, 1993) was an American businessman, diplomat, Army Air Forces pilot, and philanthropist. The son of IBM Corporation founder Thomas J. Watson, he was the second IBM president (1952–71), the 11th national president of the Boy Scouts of America (1964–68) and served on the World Scout Committee (1965-1971), and the 16th United States Ambassador to the Soviet Union (1979–81). He received many honors during his lifetime, including being awarded the Presidential Medal of Freedom by Lyndon B. Johnson in 1964. Fortune called him "the greatest capitalist in history" and Time listed him as one of "100 most influential people of the 20th century".
Early life
Thomas Watson Jr. was born on January 14, 1914, just before his father, Thomas J. Watson, was dismissed from his job at cash register company NCR – an act which subsequently drove Watson Sr., to founding the largest and most profitable digital computer manufacturer in the world, IBM Corporation. Two sisters followed Thomas Jr., Jane and Helen, before a final child, Arthur Kittredge Watson, was born.
Watson Jr. was raised in the Short Hills section of Millburn, New Jersey.
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 – and business tours to Europe and made appearances at annual gatherings for the company's elite sales representatives, the IBM Hundred Per Cent Club, 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, Watson suffered from clinical depression.
Talking to a reporter in 1974, Watson 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." 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 graduated with a business degree in 1937.
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 Forces during World War II. His brother "Dick" (Arthur) Watson had dropped out of Yale. Watson became a lieutenant colonel, tasked with 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 and Bradley were instrumental in establishing the ALSIB-Northwest Staging Route to send military aircraft from the United States to the Soviet Union.
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 limelight."
Research and development
Prior to his time, IBM had primarily emphasized the sales organization, with a reasonable range of products. Tom Watson Jr., however, promoted a research and development structure.
The first result of this was the IBM 7030 Stretch program to develop a transistorized "supercomputer"; 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.
The three computer families that eventually emerged from 1958 onwards comprised the IBM 7070 and IBM 7090 for large government business and large businesses, the IBM 1620 for smaller customers in the scientific community, and the IBM 1401 for commercial use by smaller organizations. 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.
Organizational structures
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 customers
- Federal Systems Division – selling to (and servicing) the US government
- 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 "... provided 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 specialty."
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 in Connecticut.
His first book in 1963 discussed his management philosophy.
Honors
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 1940s.
Lyndon B. Johnson in September 1964 awarded Watson the Presidential Medal of Freedom, the highest award a U.S. president can bestow on a civilian.
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.
Retirement
thumb|left|150px|Watson with Jimmy Carter, January 20, 1978
Watson left IBM in 1971 on his doctor's advice after having a heart attack. After recovering, he was appointed by President Jimmy Carter to be chairman of the General Advisory Committee (GAC) on Arms Control and Disarmament, in support of the Arms Control and Disarmament Agency which had been previously set up by President John F. Kennedy. Watson advised President Carter against use of the experimental MX missile. After leaving the GAC, he was appointed by President Carter to be the US Ambassador to the Soviet Union, serving from October 29, 1979, to January 15, 1981.
Following his return home after Carter's defeat by Ronald Reagan in the 1980 United States presidential election, Watson gave the commencement speech at Harvard University in 1981 in which he warned against further escalation against the USSR. He was also a member of the Bohemian Club.
He was an avid sailor and pilot. He named 7 successive sailboats after Palawan, the last in 1991. Watson sailed one of his Palawans farther up the northern coast of Greenland than any non-military ship had done previously, receiving 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 helicopters, jets, and stunt planes, and was the first private citizen to receive permission from Soviet General Secretary Mikhail Gorbachev to fly across the Soviet Union, recreating in 1987 the ALSIB route from World War II.
Personal life
Watson married Olive Cawley (1918–2004) in 1941.
He had homes in Greenwich, Connecticut; North Haven, Maine; Stowe, Vermont; Vail, Colorado; New York City; and Antigua. He died in Greenwich on December 31, 1993, of complications following a stroke. He was 79.