Part of my job was to inspect the local IBM office wherever I happened to be, and I only had to walk into one of these places to be reminded who IBM still belonged to. It was full of the old-fashioned practices and traditions that Dad had started. We still had our songs and banners and slogans, our company newspapers, our codes of behavior and dress, and a photograph of Dad in every room. Some of these customs were starting to moderate on their own. Most branch managers had stopped making the salesmen sing in the morning before going out to call on customers, for example. I wanted to get rid of the hoopla that seemed ridiculous for a mature corporation. But there was a limit to what I could do. Many of these practices were just as dear to the people who worked in those places as they were to Dad, and I didn’t want to offend them. Still, I needed something that would signal that I was running IBM now, and that times had changed. We were a computer company, not a punch card company; we were firmly in the 1950s, not the 1920s; we were leaders in a new field that would shape the future.
I decided I could put my stamp on IBM through modern design. Dad had always paid close attention to IBM’s appearance. It was a key to his success: he understood earlier than most American businessmen how important it is to project a corporate image. Right at the beginning, when the company was just hanging by its fingernails, he improved the way its people and products and offices looked and gave the company an aura of solidity that raised morale and won customers. I figured that what had worked for him would work for me. The computers we were building were the very epitome of modern technology—on the inside. But on the outside they were about as exciting as a collection of filing cabinets. Meanwhile everything else about IBM looked obsolete. I wanted to make IBM’s products, offices, buildings, brochures, and everything the public saw of our company exciting and modern.
The inspiration for the design program came to me during a stroll I took down Fifth Avenue in the early 1950s. I found myself attracted to a shop that had typewriters on sidewalk stands for passersby to try. The machines were done in different colors and had sleek designs. I went inside and saw modern furniture and bright colors that all worked together and gave the shop a lively feel. The name over the door was Olivetti. A few months later an old family friend, the general manager of IBM Holland, mailed me a thick envelope in which I found two bundles of brochures and photographs. A small note explained that the first was a collection of Olivetti advertisements and sales literature, as well as photographs of their headquarters, plants, sales offices, employee housing, and products. The second bundle was of similar material from IBM. My Dutch friend suggested that all I had to do was to lay these out on the floor in two columns and I’d see IBM had to improve. I tried it and he was right: the Olivetti material was filled with color and excitement and fit together like a beautiful picture puzzle. Ours looked like directions on how to make bicarbonate of soda.
I carried that envelope with me to a conference for IBM executives in late 1954. It was at an old resort in the Poconos that my father liked. I knocked on the door of Dad’s suite during a quiet hour and said, “Can I show you something?” I laid the materials out for him on a large table. “I think we can do even better than these people if we just get our designers to raise their sights a little,” I said. I didn’t press the point because Dad had personally approved every single product and building in the IBM brochures. He looked at the Olivetti things and the IBM things and said quietly, “I see what you mean. What do you intend to do?”
I told him I wanted to hire the best young industrial designer I knew. His name was Eliot Noyes, and I had first met him during the war when he’d been head of the Air Force glider program. I’d run across him again years later, when he designed a good-looking new typewriter for IBM. Eliot was a compact guy with thick glasses who seemed extremely unassertive and easygoing, but he had strong ideas about what did and didn’t belong in a product’s design. Basically, he believed that machines should look like what they are, not be dressed up in phony streamlining or frills. The same principle extended to architecture, in which Eliot was also trained.
The first project I put him on was the ground floor of IBM’s World Headquarters. Eliot came to New York and we looked at it together. The place was a terrible eyesore and projected a split personality. If you looked in the window on the Fifty-seventh Street side of the building, you saw the Defense Calculator—a set of drab gray cabinets in a large room with dark carpets and yellow drapes. But if you walked around the corner onto Madison Avenue and went in the main lobby, you found yourself back in the 1920s. Dad had it decorated to suit his taste, and it was like the first-class salon on an ocean liner. It had the Oriental rugs he loved and black marble pillars trimmed with gold leaf. Lining the walls were punch-card machines and time clocks on display, cordoned off by velvet ropes hooked to burnished brass posts.
Our IBM would look dramatically different. The new 702 was scheduled to be installed in the lobby the following summer; we decided that we’d use its unveiling to make a splash. We covered the windows on the street and closed off the lobby behind the receptionist with beaverboard. It stayed like that all spring while we got the place ready. Dad had given his approval in theory, but once he was barred from his beloved lobby he became terribly uneasy. He’d walk into the building every morning and look at that beaverboard barrier. Then he’d say to me, “Why can’t I get in there?” If I’d let him, he probably would have vetoed the whole project.
The new Data Processing Center was modern, spare, and very dramatic. Eliot made the floor completely white. He made the walls a vivid red. He put up understated signs that read “IBM 702” in silver on the red wall. It was a beautiful presentation for anybody who was interested in modern design. The product made the statement, not the surroundings.
Before we opened the lobby to the public we asked Father down to see it. He had a whole coterie of guys following him with notebooks as he walked through. He looked at the 702, which was done in the standard gray finish trimmed with chrome, set against the red wall as a background. Dad kept looking at the wall, then back at the computer, then back at the wall. Finally I said, “Dad, what do you think of it?”
“I like it,” he said. “I like it a lot. I particularly like that wall. That wall is painted. If any of you fellows should ever decide that you don’t like it, you can change it overnight.” This compliment, while left-handed, was good enough for me. I kept the wall the way it was. We opened the doors the next day to a hundred reporters and photographers, and the day after that the heads of forty railroads from all over America came at our invitation to spend a morning learning about the new computer. The Data Processing Center generated enormous excitement. Like the SSEC and the 701 that had preceded it in the window, the 702 was actually a working machine. Customers who wanted to rent computer time would simply bring their data in, and we kept the computer running around the clock. If you went by on Madison Avenue in the middle of the night you would see it behind the big plate-glass windows, tended by well-dressed technicians in its brightly lit room.
Working with Noyes was quite an education. He came from an old Boston family and had a real streak of Yankee independence. When I offered him a big job as director of all of IBM’s architectural and industrial design, he turned me down flat. “I’ll work with you, not for you,” he said. “The only way I can do this job right is to have full access to top management.” So we made an arrangement whereby he pledged a major part of his time to IBM, and I named him consultant director of design. The next thing he straightened me out on was my idea of giving IBM a recognizable style. I wanted the factories, products, and sales offices all done in such a way that a person could look at any of them and say instantly, “That’s IBM!” But Noyes said this would be self-defeating. If we tried to fix a single, uniform corporate image, it would eventually become tired and dated. Instead, he suggested that IBM’s theme be simply the best in modern design. Whenever we needed something built or decorated, we would commission the best architects, designers,
and artists, and give them a relatively free hand to explore new ideas in their own styles. As it turned out, Noyes was a fantastic judge of talent, and the people he found for us were as great a contribution as the award-winning products and buildings he designed himself.
We needed architects in particular, because we were just about to begin the greatest factory expansion in IBM history. By 1955 our factories in both Endicott and Poughkeepsie were overflowing with almost ten thousand employees each. In the nearby communities of Owego and Kingston we were building huge satellite plants to house ten thousand more workers for our military work. Still, we needed more manufacturing, and I didn’t want it all in these places. We were already in danger of turning them into company towns and driving other employers out. So we began a great movement west.
Dad had extended our business across America by incessant traveling in trains and cars, but he liked to stay close to his factories, and for that reason he kept them near New York. But I was a pilot, and I’m sure that the Midwest and California seemed much less distant to me than they did to T. J. We decided to build major plants in Rochester, Minnesota, which is the home of the Mayo Clinic, and San Jose. We envisioned each place to be another Endicott—an IBM center complete with a factory and a school and an engineering lab; only the design would be different.
Eero Saarinen was the architect Eliot chose for Rochester. It was the first great test of his idea that we should hire top people, because Saarinen was already famous and quite expensive. He designed us a complex of connecting buildings laid out in a checkerboard pattern around gardens and courtyards. It was both beautiful and practical, and got attention in all the architecture magazines. That was pleasing, but what really sold me was the fact that the plant was completed on time and under budget. To me this proved that hiring a good architect is good business.
The San Jose plant got us into the magazines too. The architect there was a Californian named John Bolles. He designed a set of low-slung H-shaped buildings in the new “campus” style. They were set around a plaza with reflecting pools, a footbridge, and modern sculptures. Bright colored metal panels fastened to the walls made the place lively, and the employees could sit on the terrace and eat lunch with a view of the mountains in the distance.
That plant has a small place in history as the first computer factory in the San Jose area. I remember going out to buy the land, a 180-acre walnut grove. I had told our real estate manager, “We have to build quickly or we’ll be in tough shape.” He met me at the airport and said, “We can take possession any time we want. But it’ll cost you an extra eight hundred thousand dollars if we do it in the next five months.”
“What!” I said. “Why is that?”
“Because that’s what the walnut crop is worth.”
I was trying not to get us financially overextended so I decided to wait until the farmer harvested his walnuts. Then we put up our plant. There were a few other companies around, mainly defense contractors like Lockheed, and we were planting the seeds of what later became Silicon Valley.
My father knew that he was vulnerable to criticism for staying on the job as long as he had. He had set IBM’s retirement age at sixty-five, and yet here he was, more than eighty years old, still taking his salary and a percentage of the profits, pulling in over a thousand dollars a day. He made a point of never bringing up his age or his health, and although he was less and less active each year, no shareholder ever challenged him on whether he was still earning his pay, because the record spoke for itself. My friend Robert Galvin of Motorola had a philosophy about this. He told me, “The founder of a business has the right to stay on until he dies. He can take all sorts of privileges and enjoy all sorts of perquisites. But those who succeed him, whether they belong to his family or not, do not have the same right.” Galvin had been thinking about the question because he was in the process of taking over Motorola from his own father, and I used him as my guide. Whether having Dad around was good or bad for me I can’t really judge. At times it was quite difficult to refrain from saying, “For God’s sake, Dad, I’m running this thing now,” because I felt terribly frustrated. But on the other hand, as long as he was still chief executive I never had to bear full responsibility. I discussed my important decisions with him and always felt him there as a backstop.
Toward the end of his life Dad would disappear from the office for weeks at a time. He loved to take long, practically aimless trips around the United States. Dad always felt best when he was on the move. He’d get Mother and his chauffeur and some suitcases and drive as far as Chicago, or they’d start from San Francisco and drive eastward, visiting IBM offices all along the way and every night sitting down to a “family dinner” with the local group from IBM. Dad always spoke at these gatherings, saying how grateful he was to Mother and reminiscing about how the two of them had traveled together more than a million miles. “We’ve never really been away from home, because we’ve always been right in the IBM family,” he’d say. Mother would sit by his side smiling sweetly, and she’d sometimes tug on his coattail if he went on too long. She never said more than a simple thank you herself.
I never knew what to expect when Dad went off on a trip. One of the eccentricities that made him difficult was his conviction that he could pick talent just by looking at a man. At every dinner he went to there would be a receiving line and he and Mother would stand there while Dad shook hands with everybody—even if there were five hundred people. There would always be a secretary standing opposite, unobtrusively, with a notebook. When Dad met a man he thought looked like a fine, square-cut fellow, he’d nod slightly, and the secretary would seek the man out. “Mr. Watson would like to have your name, your position, and where you live,” he’d say. Dad would often send the man to us in New York. This worked more often than not, but when it didn’t it was a headache both for the man and for me.
During his travels Dad would sometimes send a memo expressing his worry about the expenses IBM was running up in the field; sometimes he’d visit a customer and get embroiled in trying to help a local office close a sale. One episode started when he paid a call on the executives of a Miami bank. Over lunch they mentioned they were thinking of replacing one or two IBM machines with specialized banking equipment made by somebody else. This was a routine sales problem being handled by our local office. But the prospect of IBM’s losing a rental to a competitor upset Dad a lot. He sent me an urgent three-page single-spaced letter and pointed out, “this has caused me to put forth greater efforts in connection with one particular machine application than I have ever done before in all my years with the company.” Happily, I was able to tell Dad that we were about to announce new banking equipment that would do exactly what the customer wanted, and the account was saved.
Digging into local situations is something every good executive does on occasion, but I didn’t like to see my father get so upset. I would drop everything until I could reassure him, but eventually I ran out of patience. Early in 1955 a woman wrote Mother a letter saying her husband had been fired unjustly from IBM. The man was a low-level manager I’ll call Smith, who had been caught doing something wrong and had been fired. Mother was upset, and showed the letter to Dad, who became so angry about the apparent injustice that he felt ill and had to go to bed.
It seemed to me there was much more at issue than our handling of one employee. My parents were worried that with Dad less active, IBM’s management was losing the concern for the individual he had tried to build into it. I was convinced that wasn’t so, and sat down to explain on paper to both of them the role I wanted Dad to play. It was the longest letter I ever sent them—twelve pages—and I poured into it everything I thought about IBM, our prospects and problems, and my accomplishments as president. I wanted to convince him, once and for all, to spare himself and leave the running of the business to me.
All of the thoughts which you, Dad, have expressed to me … about the possibilities of things not going well in IBM—the fact that we must watch exp
enses—the fact that if the business starts slipping, it’s hard to stop—these are all facts which I knew about before you mentioned them. In truth, they are possibilities which I go to bed with every night. If they should come about my reputation as a businessman is vanished—my reputation as a successful son is finished. No wonder I think about them frequently. I have got to make good.
There are literally hundreds of incidents throughout the year like the Smith situation. That Mrs. Smith saw fit to write you, Mother, is unfortunate. But before she did, the matter had been fairly & well settled. Therefore I don’t believe we should panic or be rushed into decisions because of a dishonest man who has been fired. I would tend to discount his threats and allegations. Let’s suppose though that Mrs. Smith had not written you & let’s suppose we handled the matter as we did. Isn’t it vital that we be capable as a team of handling these matters well because you both can’t know of all of them nor can I. If the present team … isn’t operating to your satisfaction, I believe you should make adjustments until you have a group in which you have complete faith—a group who can give you peace of mind about the IBM Co.
Nothing would please me more or help me more than to have your advice on every matter which comes to my attention—much of the time, I’m somewhat in the dark.… [But] I don’t share your fears about IBM. I believe the company is as strong as it has ever been—with as competent a management as ever, and as well run as ever! This is because you have trained me to think along the lines you think and because you have permitted me to pick a team of the strongest men in the business.
If I am right in my beliefs about IBM, then it ought to be possible for the builder of this great business to drop around and chat with us about our really important problems: Our Department of Justice case—how much of our capital investment should go into electronics—how we should improve the Time division—how we can find and upgrade more executive possibilities from the field. This rather than getting involved in criticizing … our operations as in the Smith matter or the general administration of the company.
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