Father, Son & Co.: My Life at IBM and Beyond - Softcover

Thomas J. Watson Jr. was chief executive officer of IBM from 1956 to 1971 and, after his retirement, President Carter's ambassador to Moscow.  He was named chairman emeritus and served as a member of IBM's advisory board until his death.

Peter Petre is a member of the editorial board at Fortune magazine and the co-author of It Doesn't Take a Hero: The Autobiography of General H. Norman Schwarzkopf.

Introduction

When my father died in 1956--six weeks after making me head of IBM--I was the most frightened man in America. For ten years he had groomed me to succeed him, and I had been the young man in a hurry, eager to take over, cocky and impatient. Now, suddenly, I had the job--but what I didn't have was Dad there to back me up. I'd heard so many stories about sons of prominent men failing in business, and I could imagine their devastation at finding themselves unable to fill their fathers' shoes. I worried I'd end up the same way, but after my father had been dead a year I announced to my wife: "I've made it through twelve months without the old boy around! "

I went another year, and then another. The computer era was beginning and IBM was able to capitalize on it: while I was chief executive the company grew more than tenfold. I like to think that Father would have been impressed with the $7.5 billion-a-year business I left behind when I resigned in 1971. He had always predicted it would someday be the biggest business on earth.

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 the same way he did. I never declared myself winner in that contest, because many of my decisions were based on policies and practices learned at his knee. But I think I was at least successful enough that people could say I was the worthy son of a worthy father.

It could have turned out very differently. The kind of privileged upbringing I had--private school, world travel, wealth--often leads to disaster for a son. I knew I was supposed to follow in my father's footsteps, but I did not see how that was possible. I was in awe of the man, yet we both had such hot tempers that it was hard for me to be in the same room with him, much less try to learn from him how to run a company.

I didn't have much motivation as a youth. At Brown University, I spent so much time flying airplanes and fooling around that I barely graduated. In the yearbook you had to have a line next to your photograph. The only thing in mine was the name of the prep school I'd gone to. There was nothing else to say. I had no distinctions, no successes of my own, and only a vague notion of how to be sympathetic and understanding to others. I was totally qualified to be either a playboy or an airplane bum.

If it hadn't been for World War II, I might never have become my own man. After 1939 my favorite recreation, flying, suddenly became serious business. I joined the Air Force as a pilot and learned to be responsible for an airplane full of men. The military took me far outside my father's influence, and by 1943 I had made it to lieutenant colonel. Though I never got promoted beyond that, I came back from the war confident, for the first time, that I might be capable of running IBM. But I'd been so unimpressive before the war that it was hard for my father to believe it. It took him years to convince himself that I'd changed, and I don't think he was ever completely sure. You can see that in the photograph of us that appeared in the New York Times when he turned IBM over to me. It shows us in our pin-striped suits, shaking hands in front of a bookcase. On my face is a look of great self-assurance and I'm obviously enjoying the occasion tremendously; but on Dad's face there is a faint, uncertain smile.

He ran IBM for forty-two years and I ran it for fifteen--all told, nearly six decades of Watson management. My job was to lead the company into the computer business, but it was he who put IBM on the map. By the time I joined the Air Force he had built the business from almost nothing to revenues of nearly forty million dollars a year. IBM was still really an insignificant part of the American industrial scene, but thanks to T.J.'s genius for selling, it was fast growing and highly profitable, and it attracted a lot of attention. Father knew how to project an image as well as any salesman who ever lived. At the New York World's Fair of 1939 there was a General Motors Day, a General Electric Day, and an IBM Day--two elephants and a gnat all getting the same treatment. We even had Mayor La Guardia as our guest at the Fair. President Franklin Roosevelt, whose confidant Father had become, sent a greeting by telegram.

During the ten years after World War II Father taught me his business secrets as we worked together. It was a stormy relationship. In public he would praise me lavishly, and I'd hear from other people the nice things he was saying about my shrewdness and brains and talent as a manager. But in private Father and I had terrible fights that led us again and again to the brink of estrangement. These arguments would frequently end in tears, me in tears and Dad in tears.

We fought about every major issue of the business--how to finance IBM's growth, whether to settle or fight a federal antitrust suit, what role in IBM other members of our family ought to play. From around 1950 my goal--one of the things on which we never saw eye to eye--was to push into computers as fast as possible. That meant hiring engineers by the thousands and spending dollars by the tens of millions for new factories and labs. The risk made Dad balk, even though he sensed the enormous potential of electronics as early as I did.

When I finally took over I was excited about change. Computing was a brand-new industry, and I always felt that if IBM didn't grab the opportunity, somebody else would. So we taught ourselves to ride a runaway horse, expanding on a scale that no company has ever matched. We grew so fast that some years we had to cope with the problem of training twenty thousand or more new employees.

I kept myself where employees could see me, out in front, setting a fast pace. I had learned from my father that by seizing opportunities for dramatic action--personally answering an employee's complaint, slashing the price of a new computer that failed to perform as promised--I could set an example of how IBM should do business. At the same time I had yearnings outside the company that would have been hard for my father to understand. In the top drawer of my desk I kept a list of adventures, like climbing the Matterhorn and retracing the South Sea voyages of Captain Cook, for which I simply had no time.

All that changed in 1970, when I had a heart attack. I was only fifty-six, and I think many executives would have been back in the office before their triple-bypass scars had even healed. But my experience at the hospital changed my life.

I had a chest pain in the middle of the night and drove myself to the emergency room. They put me on a monitor, but early the next morning I stopped the doctor and said, "Look, I've got to get out of here. My best friend is dead and I've got to go to his funeral, then I have to fly right out and give the inaugural address at the Mayo Clinic medical school, then--" He told me, "You're not going anywhere. You're having a heart attack." They moved me into intensive care.

The doctor, Mark Newberg, was someone I grew to like very much. Over the next three weeks we had long discussions, and finally one morning he looked me right in the eye and said, "Why don't you get out of IBM right now? I think you've proved just about everything you can up there."

He left. I didn't want any lunch, it was such a shock. By dinnertime I started thinking about the responsibilities I'd carried for so many years and all the things I could do outside business. The next morning I woke up at dawn and got a cup of coffee at the nurses' station. When I got back to my room, sunlight was streaming in the window and I felt better than I had in decades. It was as if somebody had lifted a heavy pack off my back.

Before I left the hospital I told the people at IBM that I was thinking of getting out. The board of directors did everything in the world to keep me in the company. They came to me individually and as a group. But I knew I was doing the right thing. I wanted to live more than I wanted to run IBM. It was a choice my father never would have made, but I think he would have respected it.
This is the story of my father and myself, of my years alone at IBM's helm, and of what I've done since leaving the company. Father and I played out our rivalry and our love for each other in the great American business that he created. I helped build it and then left it behind me twenty years ago. Along the way I learned a great deal about power: being subject to it, striving for it, inheriting it, wielding it, and letting it go. I learned lessons for fathers who have dreams for their children and for children burdened with parental expectations. Lots of sons ask me if they should follow their fathers into business. My answer is: If you can stand it, do it.
Chapter One

In the spring of 1987, not long after celebrating my seventy-third birthday, I took my helicopter out to follow the scenes of my childhood. I went by myself, the way I often fly when there is something that I want to see. Helicopters are noisy and sometimes hard to handle, but they can take you exactly where you feel like going. You can land on a flat rock only ten feet by ten feet far out in the sea, or tuck into a garden behind the house of a friend. On that spring day I wanted to learn what remained of the world in which I was raised.

I flew down the Hudson River alongside Manhattan, swinging west off Broad Street, where my father would catch the ferry after work. On the New Jersey side of the river Dad would get on a train. I followed the railroad west over the rolling hills and fields of New Jersey, where he'd ride talking politics with other early suburbanites like Malcolm Muir, the founder of Business Week magazine, and André Fouilhoux, an architectural engineer who was one of the chief designers of Rockefeller Center.

I spent my boyhood in the village of Short Hills, twenty miles from New York. In the 1920s it was a fashionable little community populated mainly by the families of commuters like Dad, called "downtown men." It had a train station, an Episcopal church, a private school and a public school, and the houses were large and set on three- or five-acre tracts. It was easy for me to spot the big gabled place where I grew up. It sits on top of a low hill, a near duplicate of our first house on that site, the one my father accidentally burned to the ground. It happened when I was five, and Dad was still in his early days of struggle and debt. The fire started when he was trying to demonstrate the use of a fireplace. He became very conscious of fireproofing after that; the roof of today's house is made out of slate.

In back of the house we'd had chicken coops, a big vegetable garden, and a pony corral; all of those were gone now. But I saw the long winding driveway where my mother taught me to drive a car when I was eleven. Nearby I spotted the two ponds that were a big part of my boyhood. That part of New Jersey was so rural in those days that right near our town there were people who made a living running traplines in the local swamps. No one lived around those ponds when we moved in. There was only a big wooden icehouse, where horse-drawn sleds would haul huge blocks of ice in the winter. When I was eleven or twelve, my friends and I used to take girls behind the icehouse to play kissing games.

I wanted to set the helicopter down and walk around. But now the banks of the ponds are covered with houses and there was no place to land. So I climbed up and flew out along the winding road we used to drive to get to Dad's country place: a farm he bought in 1927 when he was feeling the first flush of wealth after running IBM for thirteen years. The farm, which we called Hills and Dales, was near the town of Oldwick, twenty miles west of Short Hills. I found Oldwick quite easily, but when I looked for Hills and Dales outside the town, there were so many highways and corporate headquarters that I never found it.
In Short Hills I was known as Terrible Tommy Watson. Whenever there was trouble, I seemed to be involved. Youthful rebellion was not in fashion in the 1920s, so I was not at all popular. Most of the kids in my school could see that at the slightest opportunity I would goof off, and none of them thought I would amount to a hill of beans. I had only a handful of friends. The other kids thought they were superior. Worse still, I was very sensitive about the fact that they avoided me.

When I was ten a friend named Joe and I were fooling around near a house being worked on in our neighborhood. The door to the screen porch was open and we could see cans of paint and brushes and turpentine. We took a couple of cans and somehow ended up painting a street.

Mother asked us about this and we confessed that the paint was stolen. She had lectured me before about swiping things, to no avail, and I think this time she decided that unless she did something dramatic, I was going to end up a felon. Usually Mother was mild and sweet tempered, but if she thought things were getting out of hand, she would move with real force. So she took us to the police station. She must have called the chief beforehand. He shook our hands and said "It's nice to see you. I want to tell you about who we have locked up here. We have people in here for murder and robbery, but most of the people who come in are petty thieves."

Our eyes were wide open by this time. They had a thing in this police station such as I've never seen since: a stand-up cage about half the size of a telephone booth. The front would swing open, you'd straddle a bar, and they'd lock you in; It must have been for questioning suspects. You could move a little bit but you couldn't get out. I remember the feeling of that. Then the chief took us to the back and put us in a cell.

"Once you're in jail, it's a terrible place to be," he said. "Most people turn into repeat offenders, and then there goes your life." I dreamt about it afterward: getting caught and going to jail when I hadn't done anything wrong.

Mother really had her hands full with us. She married late, at age twenty-nine, and then had four children in the space of six years--me, my sisters Jane and Helen, and Arthur, whom everybody called Dick. Even though I was the oldest, Mother did not expect me to help look after my brother and sisters, so I was pretty much on my own as a boy. I loved Dick, but he was too young to be an interesting companion. Helen, the second youngest, was always a cozy friend. If she saw me with a bag of stolen candy, she'd want to know what it was, but I could always trust her to clam up around our parents. My relationship with Jane, who was closest to me in age, was more difficult. She would sometimes join in one of my escapades, but then she'd feel guilty and confess to Dad, getting me in trouble. Worse, Jane was Father's favorite. He went far out of his way to accommodate her and she always called him by the odd name "My Joy" instead of Daddy or Father. This started as an endearment, but she kept it up as long as she lived. Mother thought it was inappropriate for Dad to play favorites, but there was very little she could do about that relationship.

The fact that I wasn't Dad's favorite did not surprise me. From very early in my life I was convinced that I had something missing. I was never able to connect completely with what other people were doing. There is a film of my first-grade play in 1921, photographed by my father. The boys were all dressed as bumblebees and the movie shows us buzzing in and out among little girls dressed as flowers. I'm the tallest, long boned and ungainly, and you can spot me easily: while the other bo...