The following is the text of "Burning Bright," an article by Peter Hillyer published on pages 16-19 of the May/June 1984 issue of Think, IBM's employee publication. (The Watson image below was not published at that time.)


Tom Watson as an Army captain.
Tom Watson as an Army captain.
Toward the end of World War II, Thomas J. Watson Jr., a lieutenant colonel in the Army Air Corps, was riding in a car near Washington, D.C., with Major General Follett Bradley. Watson had been the general's pilot on a mission to Moscow to set up a ferry system to deliver lend-lease planes to the Soviet Union.

"What are you going to do when the war ends?" Bradley asked. "It's over in Europe now, and pretty soon it will be all over."

Watson replied that he might go into the regular Air Force or become an airline pilot, and the answer seemed to surprise the general.

"I thought you'd go back and run IBM," he said.

"Well, general," Watson said, "my father doesn't own IBM. It's a publicly owned company. And I had no idea of doing that." He paused. "Do you think I could?"

Said the general: "Of course."

That night, Watson recalls, he told his wife, Olive, what General Bradley had said. The general knew him well, since Watson had been his aide, his executive officer and his pilot. The remark stuck in his mind. In all likelihood, the die already had been cast and he would have returned to IBM (he was a salesman briefly before the war) without Bradley's counsel. But now the decision seemed easier.

Watson, the tall Air Corps officer with the intense blue eyes, is now 70, and he has retired from the board of directors of IBM, the company his father founded and which the son led to unparalleled success.

He is the last of the Watsons to help chart a course for the company. (His brother, Arthur, who had been chairman of the IBM World Trade Corporation, died in 1974.) Particularly for those who have been around for a while, his leaving evokes a very special set of memories. Says John Opel, IBM chairman: "Tom Watson, Jr., set the tone and the course for IBM for many years. His business judgment and, beyond that, his sense of what was right for the company and the people who made it up have been without equal. We will all miss his presence and his wise counsel counsel backed by nearly five decades of active association with IBM."

In all, Tom Watson, Jr., was with IBM more than 46 years, with time out to fight a war and for a stint of Government service as ambassador to the Soviet Union. When he returned to the company from the military in 1946, its revenues amounted to $119 million. They increased to $696 million when he became chief executive officer, and when he left in 1971 after a heart attack, gross income had risen to more than $7 billion, an increase of more than 10 times in 15 years. A great deal of that growth can be attributed to his leadership, his driving energy, and a fierce insistence upon excellence.

Watson has said that perhaps his most valuable characteristic was an ability to pick the right people those who were willing to tell him when he was wrong and whose judgment he respected enough to rethink his position.

He points to the management of IBM since he left active management almost 12 years ago and basks in the reflected success of numerous managers who worked with him over the years.

He also believes that, in a rapidly growing company, the whole management team has to be willing to reshape the management structure whenever necessary and that this is the key to success.

Although he joined IBM officially in 1937 as a salesman in New York City, he had been involved with the company much earlier than that. He was born in 1914 in Dayton, Ohio, the same year that his father, Thomas J. Watson, Sr., took over a conglomeration of companies called C-T-R, with a special gleam in his eye for one of its products, the punched card machine. C-T-R was renamed International Business Machines in 1924, a title some thought a bit grandiose for a small maker of time clocks and tabulating equipment. But the vision was already there.

"In a sense," says Watson, "... I grew up in the company."

After graduating from Brown University, where he majored in geology, Watson went to work for IBM, then left in 1940 for the Air Corps. He went into the service as an enlisted man and came out as a decorated lieutenant colonel with more than 2,000 hours in the air.

Returning to IBM, Watson, who had married Olive Cawley in 1941, some eight days after Pearl Harbor, set out to learn everything he could about the business his father had founded. And that he did. In 1952, he became IBM's president; in 1956, succeeded Thomas J. Watson, Sr. (who died later that year) as chief executive officer, assuming the additional title of chairman of the board in 1961.

There was an irony to this ascension because Watson recalls that, as a 12-year-old, he went to his mother and told how the thought of possibly having to follow in his father's footsteps frightened him.

In 1956, IBM ranked 48th on Fortune's list of the 500 biggest U.S. industrials. The next year, IBM became a billion-dollar corporation. Yet there were few, if any, who were able to predict just how fast it would grow.

Most of all, perhaps, Tom Watson, Jr., has been celebrated as the man who led IBM from the era of the punched card machine into the dynamic and ever-expanding world of the electronic computer. When he became president in 1952, however, IBM was having its troubles with the new machines.

"Remington Rand came out with its computer first, the UNIVAC in 1951," he says. "It sold two or three of them to the Census Bureau, and we went into absolute panic. Here was our traditional competitor, whom we had always been able to handle quite well. And now, before we knew it, it had five of these beasts installed and we had none."

IBM announced its first commercial electronic computer, the IBM 701, in 1952; did well in the marketplace and followed with the IBM 702, then the more advanced IBM 704. The company was never headed after that. Why?

"Traditionally, we had a big share of the punched card accounting market," Watson explains, "so we had a large field force of sales and service people. They were, perhaps, the only people in America who understood how to put in an automated bookkeeping system.

"The invention [the computer] was important. But the knowledge of how to put a great big system online how to make it run and solve problems was probably four times as important. We also had cash flow the others didn't have to support a very expanded research and development program."

In June of 1971, following a mild heart attack the year before, Watson turned over the reins of the company to T. Vincent Learson. This decision came after a careful consideration of the heavy and unceasing demands posed by the position of chief executive officer. After retiring from the company in 1974, he continued as chairman of the executive committee of the board of directors. He resigned from that job in 1979 to serve as ambassador to the Soviet Union under President Jimmy Carter. Never one to pick a calm spot, Watson arrived in Russia just before that country raised a worldwide furor by invading Afghanistan. He resigned his ambassadorship in 1981, returned to IBM's board and became chairman emeritus.

Although Watson announced his decision to retire from the board in late February, it did not take effect until the stockholders meeting in Los Angeles April 30, when a new board was elected.

In any case, it hardly looks like rocking-chair time for the man who, for so long, was considered to be the driving force behind one of the world's most successful and intriguing business enterprises.

Watson has continued to sail, fly and ski with great enthusiasm, serves with many organizations and is a tireless worker to end the nuclear arms race a cause, he says, that consumes many of his waking hours.

What legacy of the Tom Watson, Jr., years burns the brightest? It depends on who you are and where you are standing. Perhaps the most pervasive is the idea that IBM is a good place for people to work. IBM put all workers, formerly paid by the hour, on salary in 1958, and for more than four decades, not a single person has lost as much as an hour's work because of a layoff. The basic belief, respect for the individual, permeates all layers of the corporation.

In June of 1977, Watson received an honorary Doctor of Civil Law degree from Oxford University. Speaking at the Oxford Center for Management Studies, he said: "We see the day-to-day contact point between the individual employees and the nearest representative of the company's management as the crucial one in employee relations. If there's a breakdown at this point and it goes unrepaired, serious problems are bound to result.

"We depend a great deal on this relationship to help insure that we maintain a respect for the individual, no matter how scientific or systemized other aspects of the management process become."

Watson knew there was nothing original in this thought. The difference at IBM, he explained, was how hard everybody worked at it.