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The
Maverick and His Machine: Thomas Watson, Sr. and the Making of IBM by
Kevin Maney Rating: ••• (Recommended) |
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Click on title or picture to buy from amazon.com |
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Character Kevin Maney presents the many facets of
the personality and character of the long-tenured CEO of IBM, Thomas Watson,
Sr., in his new book, The
Maverick and His Machine. Readers will note many similarities to the
character of successful modern CEOs, as well as traces of the flaws that have
led some CEOs to lead companies astray. It’s clear throughout the book that
Watson liked to do whatever he wanted, a trait that most of us would exploit
when we can. Watson comes across as self-absorbed and over-confident, with
little rein from anyone on his behavior. Here’s an excerpt from Chapter 4, “Brining
Up Baby IBM”, pp. 109-114: Eleven
IBM executives took seats in Watson's office on an autumn day in 1928. As the
meeting got underway, they might have experienced any number of emotions for
their chief executive, but probably none of them at that moment were love. "I
have definitely concluded that you gentlemen do not realize even in a small
way what the future is going to demand of you in connection with sales of
your products," said a furious Watson. "And incidentally, I might
add that I am going to demand more of you, because I've got to." In
1927, the company made a $4 million profit on $14 million in sales. In the
fall of 1928, IBM was on its way to making $5 million profit on $15 million
in sales for the year. Almost any businessperson would be impressed by a 25
percent increase in profits in a year. But Watson had ordered his executives
to grow the company to at least $20 million in 1928, and then he wanted sales
to rise to $28 million in 1929. He fumed at his executives because they were
off the pace he'd set. In
that state, anything could have set him off. The spark on this day was his
executives' failure to answer a call to dedicate a company-wide sales push
during the last four months of 1928 as a tribute to Otto Braitmayer, who was
celebrating 40 years with the company. They'd
all received telegrams from Watson about it. In 1928, if you wanted to
communicate with another person immediately and convey a sense of urgency or
importance, you sent a telegram. When that piece of paper labeled
"Western Union" landed on a desk, its message printed in block
letters minus punctuation could not be ignored. No one could ever use the
excuse, "I didn't see your telegram." Yet
none of IBM's executives responded to Watson's Braitmayer telegram. More than
likely, they didn't think that there was any need to respond—Watson didn't
ask for their input, and the dedication seemed only symbolic. Yet Watson lit
into those present, letting the hyperbole fly. "I
never in all my experience in business worried as I have since last Tuesday
morning because I did not hear from you men. Not one of you even mentioned it
to me," Watson said. "You men don't know what you are trying to do.
Why is the tabulating division in such an awful condition?" The
executives must have been thinking: It's not in awful condition! Though they
wouldn't dare show it in their faces, much less speak it aloud. "Because
you fellows don't know what you want to do. Last month was the biggest month
we had, over a half-million dollars net for August. That ought to have been a
million dollars. And you should have gone after it. It's right out there
waiting for you."" In
that mood, if they'd netted $5 million, Watson would have been mad that it
wasn't $6 million. He always pushed himself to chase near-impossible goals,
and he had little patience for anyone who didn't do the same. This stance was
reflected in two of his many business aphorisms, which were often posted in
IBM offices and factories: "They can who know they can," and,
"Never feel satisfied." Watson
felt he could unleash tirades at his managers with impunity, and for the most
part he could. No one dared question or cross him. Executives rationalized
his behavior by telling each other, "If you weren't worth putting
together, he didn't bother to tear you apart. They were willing to take it because they wanted to be part of
IBM. They were building machines that had never before existed. They worked
with brilliant engineers and sharp managers who blended together to form this
odd but magnetic cult of sober people who made the company their life and
ambition. Few other American companies offered the promise and excitement of
IBM—or such an opportunity to get rich. In 1928, Watson received a letter on
IBM stationery saying that the undersigned were impressed with the
"rapidity" of IBM's stock increase during the year. "We feel
it is only proper to tell you at this time just how deeply grateful we are to
you . . . for making it possible for us to become stockholders and prosper
with the business." It was signed by 20 midlevel IBM executives. Many
felt blessed to be able to follow Watson. He was such a strong personality,
so sure of his leadership and so driven. People hitched themselves to him
like railcars to a locomotive. Once they did—and once they proved their
loyalty—Watson gave back, whether it was with bonuses, quick promotions, paid
vacations, or compassion during an illness or family crisis. The
fear of getting cut off from all of that shot ice through executives'
arteries. Harry Evans, the peppy young executive, knew exactly how that felt.
He believed he was wronged when IBM chose not to give him a bonus for landing
a major deal with the U.S. Census. Evans aired his complaint to Watson, who
sent back a scathing reply. "I feel very sorry to learn that after your
long term of service you seem to be so unhappy regarding your connection with
the company," Watson wrote. That
was all Evans needed to hear. Petrified of Watson's disapproval, he wrote
back immediately. "I have always been and am now very happy in my work
for and with every division of our company and all our executives and
representatives," Evans wrote. "No one could be happier in serving
with you and for you than I am. I believe I have enthusiastically proved on
all occasions my whole-hearted loyalty and joy in cooperating with your good
self. . . to the best of my ability." Whatever Watson decided about the
bonus, Evans promised he would "cheerfully abide" by it. Watson's
dictatorial tendencies were served by his inability to create an effective
management structure suitable for a large company. When C-T-R was small and
spunky, decisions funneled through Watson—big ones about new products or
factories and little ones about the wording of an advertisement or the
seating at a convention. He would listen to members of his team and rely on
their input, but he wanted the final say. As the company grew, decisions
continued to go through Watson. To be sure, IBM managers had plenty of
responsibility; however, the company revolved around its president, who at
any time might undo a decision or promotion made by an executive. An
organizational chart from the period looked like bird tracks in the snow,
jammed full of lines, tiny squares, and initials. With subsidiaries, legal
entities, and international entities, IBM consisted of 13 different
companies, including the umbrella IBM Corporation. A matrix of the top
executives involved in running IBM listed the 13 entities across the top and
14 executive titles down the left-hand column. The boxes formed by the
intersection of a company and a title (Tabulating Machine Company and
treasurer; Dayton Moneyweight Scale Company and secretary) were filled in
with the initials of the person who had the job. Eighteen different individuals
held 182 jobs among them. A matrix of IBM directors was even more difficult
to follow. There was no chain of command at IBM, but something more like a
web, with Watson as the spider. Watson
continually pledged—usually to Nichol—to simplify the structure and push more
duties off his desk and onto others, but he found it difficult to do either.
Watson was not a systematic man, nor was he one who easily gave up control.
However, he easily gave up credit. In speeches and interviews, he would never
fail to put the spotlight on others, whether honoring Braitmayer for 40 years
of service, naming every IBM inventor in a business club speech, or publicly
thanking the Endicott factory workers. To Watson, though, credit was one
thing; control was something else entirely. As
the checks on Watson disappeared, he had fewer ways to find out when he was
deluding himself. He believed he was a powerful speaker who could rouse a
sales force or draw tears from a dinner crowd. For the audience, however,
many of his speeches were dull and long. He often spoke in a flat voice and
had a habit of loudly clearing his throat every few minutes. He sometimes
read from prepared texts; other times he referred to brief notes typed
vertically on the backs of unpunched punch cards. At times he spoke
extemporaneously. However he prepared, he never hesitated to vary from
whatever he'd planned to say. Generally, he spoke about broad concepts and
generalities, rarely using anecdotes. The result was that many of his
speeches meandered aimlessly and went on far too long for the audience. Though
Watson had a sense of humor, his speeches were humorless. He sometimes opened
with one of a few tired jokes. He'd stride to the podium after Nichol or
someone else gave him a flowery introduction, and say the introduction
reminded him of a funeral he went to. The minister went on and on about the
good qualities of the deceased, Watson would explain. Finally, a man tiptoed
up and peered into the casket. "I asked him why he did that," Watson
would say, closing in on the punch line. "He said, I thought I was at
the wrong funeral.' " Another
opening joke: "Why is a public speaker like the wheel of an automobile?
The more he spoke, the bigger the tire." Then, with no sense of irony,
Watson would speak too long. Watson also started to
believe he was as important outside of IBM as he was inside the company. More
than once, he sent a conductor to order the engineer to stop a train so he
and his party could view the scenery. On one trip from New York to San Francisco,
the engineer cranked up the train's speed to make up for falling behind
schedule. Watson, who had booked the entire train for a party of IBMers,
overheard one passenger say, "Mercy, we're just whizzing along, aren't
we?" Watson suddenly feared a wreck, and yelled for a conductor—who
tried to explain that the train was traveling at a safe speed. "Don't
talk to me!" Watson said. "If you don't slow up this train, I'll
pull it down myself." He reached for the cord that would trigger the
emergency brake. "If
you touch that cord you're likely to hurt somebody," the conductor said. "Listen,
who's boss of this train?" Watson bellowed. "I
am," said the unimpressed conductor. "Well,
I'm paying for it. I'll have you fired! " "Maybe you
will," said the conductor, "but you won't touch that
cord."" That time, Watson lost
the argument. But clearly he felt that in any situation, he should be able to
do as he wished. By the end of The
Maverick and His Machine, readers will marvel at Watson’s successes, his
personal volatility, and his significant character flaws. This book is a
great reminder of the complexity of human behavior, and the many ways in
which strengths can become weaknesses, and unchecked weaknesses can lead to
disaster. Steve Hopkins, September 23, 2003 |
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ă 2003 Hopkins and Company, LLC The
recommendation rating for this book appeared in the October 2003
issue of Executive
Times URL
for this review: http://www.hopkinsandcompany.com/Books/The
Maverick and His Machine.htm For
Reprint Permission, Contact: Hopkins
& Company, LLC • 723 North Kenilworth Avenue • Oak Park, IL 60302 E-mail: books@hopkinsandcompany.com |
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