The Maverick and His Machine: Thomas Watson, Sr. and the Making of IBM

The Maverick and His Machine: Thomas Watson, Sr. and the Making of IBM


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The first complete look at one of America's legendary business leaders

This groundbreaking biography by Kevin Maney, acclaimed technology columnist for USA Today, offers fresh insight and new information on one of the twentieth century's greatest business figures. Over the course of forty-two years, Thomas J. Watson took a failing business called The Computer-Tabulating-Recording Company and transformed it into IBM, the world's first and most famous high-tech company. The Maverick and His Machine is the first modern biography of this business titan. Maney secured exclusive access to hundreds of boxes of Watson's long-forgotten papers, and he has produced the only complete picture of Watson the man and Watson the legendary business leader. These uncovered documents reveal new information about how Watson bet the company in the 1920s on tabulating machines-the forerunners to computers-and how he daringly beat the Great Depression of the 1930s. The documents also lead to new insights concerning the controversy that has followed Watson: his suppos ed coll usion with Adolf Hitler's Nazi regime.

Maney paints a vivid portrait of Watson, uncovers his motivations, and offers needed context on his mammoth role in the course of modern business history. Jim Collins, author of the bestsellers Good to Great and Built to Last, writes in the Foreword to Maney's book: "Leaders like Watson are like forces of nature-almost terrifying in their release of energy and unpredictable volatility, but underneath they still adhere to certain patterns and principles. The patterns and principles might be hard to see amidst the melee, but they are there nonetheless. It takes a gifted person of insight to highlight those patterns, and that is exactly what Kevin Maney does in this book."

The Maverick and His Machine also includes never-before-published photos of Watson from IBM's archives, showing Watson in greater detail than any book ever has before. Essential reading for every businessperson, tech junkie, and IBM follower, the book is also full of the kind of personal detail and reconstructed events that make it a page-turning story for general readers. The Maverick and the Machine is poised to be one of the most important business biographies in years.

Kevin Maney is a nationally syndicated, award-winning technology columnist at USA Today, where he has been since 1985. He is a cover story writer whose story about IBM's bet-the-company move gained him national recognition. He was voted best technology columnist by the business journalism publication TJFR. Marketing Computers magazine has four times named him one of the most influential technology columnists. He is the author of Wiley's MEGAMEDIA SHAKEOUT: The Inside Story of the Leaders and the Losers in the Exploding Communications Industry, which was a Business Week Bestseller.
Residence: Clifton, VA .
"Watson was clearly a genius with a thousand helpers, yet he managed to build an institution that could transcend the genius."-from the Foreword by Jim Collins
"Like all great biographers, Kevin Maney gives us an engaging story . . .his fascinating and definitive book about IBM's founder is replete with amazing revelations and character lessons that resonate today."-Rosabeth Moss Kanter, Harvard Business School, bestselling author of Evolve! and When Giants Learn to Dance

Product Details

ISBN-13: 9780471679257
Publisher: Wiley
Publication date: 08/03/2004
Pages: 485
Product dimensions: 5.55(w) x 8.76(h) x 1.38(d)

About the Author

KEVIN MANEY is a nationally syndicated, award-winning USA Today technology columnist. He was voted best technology columnist by the business journalism publication TJFR. Marketing Computers magazine has, four times, named him one of the most influential technology columnists. He is also the author of the BusinessWeek bestseller Megamedia Shakeout, from Wiley. Maney lives in Clifton, Virginia, with his wife and two children.

Table of Contents




Chapter 1. Maverick Kindling.

Chapter 2. Lit by Flint.

Chapter 3. A Mess Spelled.

Chapter 4. Bringing Up Baby IBM.

Chapter 5. Daring and Luck.

Chapter 6. Friends, Heroes, Sycophants.

Chapter 7. Enemies and Delusions.

Chapter 8. King and Castle.

Chapter 9. Watson the Second.

Chapter 10. Watosn's War.

Chapter 11. Old Man, New Electronic Age.

Chapter 12. World Conquest.

Chapter 13. The Maverick and His Humanity.

Chapter 14. Generations After.

Selected Bibliography.




What People are Saying About This

From the Publisher

"...a rich and thorough portrait that goes right back to turn-of-the-century America..." (Business Voice, March 2003)

The story of Watson's transformation of the disorganized, amorphous Computing-Tabulating-Recording Company into steamlined, world-famous IBM receives a spirited telling by Maney, a USA Today technology columnist. Access to previously unexplored records has provided juicy raw material, including letters and internal memos, to bring America's first celebrity CEO to life in this wart-sand-all biography: Watson (1874-1956) saw the strategic value of corporate culture early and was protective of what he built; Maney argues that the strength of that culture later allowed IBM to survive the potentially devastating effects of Watson's personality flaws. Charismatic, optimistic and generous, Watson was also self-absorbed and psychologically ruthless in getting things done his way. Hard to work for and unable to distinguish between the company and himself, he also behaved like a dictatorial CEO when wreaked havoc with his family. Watson's mania for overreaching peaked when he accepted a decoration from Hitler in 1937 under the deluded impression that Hitler woul d follow Watson's ca mpaign for world peace through world trade; according to Maney, that episode illustrates how out-of-control Watson's ego had grown. Yet, as Maney makes clear in this timely tale of the man who made information into an industry and discovered the power of corporate culture, "Watson wasn't just the best business story at the end of the 1930s; he had become a great American success story that captured the popular imagination." Agent, Sandy Dijkstra. (May).
Forecast: Maney's book should hold great appeal not only for avid business readers but also for devotees of the vicissitudes of financial dynasties. That appeal will be supported by a 75,000-copy first printing and a $100,000 ad/promo budget. (Publishers Weekly, March 17, 2003)

"...Maney has written a timely and authoritative biography. Without lapsing into hero worship, he presents a great, if flawed, man in all his humanity." (Business Week, May 12, 2003)

WHEN Thomas J. Watson Jr., who ran the International Business Machines Corporation during its climb to dominance in the computer industry, published his memoirs in 1990, he called the book "Father, Son & Co." His father - who had taken over a motley assortment of business machine companies in 1914 while awaiting sentencing on a criminal antitrust conviction - loomed large in the story. Indeed, one reason the book has become a business classic is surely its poignant, child's-eye view of the flawed yet fascinating father who created I.B.M. and brought it to the brink of the computer age before passing it to his son, who died in 1993.
The portrait of Thomas J. Watson Sr. in his son's memoirs had all of the misty myopia that accompanies any child's perceptions of a fearfully adored parent. One reviewer complained that "we hear too little of life within I.B.M. - and too much of Mr. Watson telling us how awful it was being his father's son."
A much more lively and nuanced picture of the senior Watson can be found in Kevin Maney's excellent new biography, "The Maverick and His Machine: Thomas Watson Sr. and the Making of I.B.M." (John Wiley & Sons, $29.95). Enriched by access to Watson's personal papers from the I.B.M. archives, the book brings this complex man to life and provides a clearer sense of how the I.B.M. culture took shape around one man's quirks, preferences and iron whims.
The company songs, the daily white shirts, the polish and pomp of corporate ceremonies - all of them were manifestations of Watson's own overcompensating insecurities. An awkward young man from a family with little money, he started out in a career that was the punchline of countless American jokes: the traveling salesman. Not until he was hired in 1896 by the National Cash Register Company in Dayton, Ohio, did Watson start to acquire the poise and polish that he would demand of his own executives decades later.
But his career at "the Cash," under the tutelege of its chairman, John H. Patterson, was very nearly his ruin. National Cash Register had a virtual monopoly in the manufacturing and sale of its product, which was becoming increasingly popular among American retailers. Unfortunately, the machines were built so solidly that they rarely wore out. Companies selling secondhand cash registers began to steal business from it.
So, in 1903, Patterson drafted Watson to run an elaborate scam. After ostensibly resigning from the company, Watson set up a chain of used cash register stores that was secretly backed by National Cash Register. By paying more for secondhand machines and selling them for less, Watson drove virtually all of Patterson's competitors out of business. He seems never to have doubted the legality of what he was doing. But when an angry ousted executive started talking to the Justice Department, the scheme figured in a 1912 federal grand jury indictment of Patterson and more than two dozen of his executives, including Watson.
In February 1913, Watson, Patterson and all but one of the other executives were convicted of criminal antitrust violations. Watson, newly married, faced up to a year in prison.
Somehow, in 1914, he nevertheless persuaded an unreconstructed trust-builder named Charles Ranlett Flint to hire him to try to save a rickety business-machine trust that Flint had assembled in 1911. The conglomerate included the Computing Scale Company of America, which made scales that calculated the price of products sold by weight; the International Time Recording Company, which made the time clocks on which workers punched in for the day; and the Tabulating Machine Company, which used punched holes in rectangular cards to sort information - "the forefathers of mainframe computers," notes Mr. Maney, a technology columnist for USA Today.
FLINT called this ailing hodgepodge the Computing-Tabulating-Recording Company. And in a remarkable decision - one cannot imagine it being replicated in this post- Enron era - he hired the energetic and supremely confident convicted felon, Thomas J. Watson, to bring the company back to life. Watson, whose conviction was later overturned, succeeded beyond anyone's imagination, except his own. Seeing the future in his little tabulating-machine company, he invested lavishly in research and expanded wildly, even in the face of the Depression.
Mr. Maney observes that "Watson borrowed a common recipe for stunning success: one part madness, one part luck, and one part hard work to be ready when luck kicked in."
The book draws on extensive corporate records to capture Watson's self-absorbed monologues to his senior executives, giving the reader an immense sympathy for the men and women who endured them. With I.B.M.'s cooperation, Mr. Maney seems to have inspected every letter, memorandum and index card that passed through Watson's hands. But the bulkiness of the research only occasionally breaks through the elegant fabric of the storytelling.
Watson - a tyrant in the boardroom, a charmer on the dance floor, a sponge for sycophantic flattery, a genius at selling an idea - emerges as an infuriating, sometimes pathetic but always fascinating business icon. For those who loved "Father, Son & Co.," this is an essential and readable companion book. Call it "I.B.M.: The Prequel." (New York Times, May 12, 2003)

IBM for decades had a distinct corporate personality, and the leader in driving that culture was Thomas Watson, Sr. Other books have described this irascible man, yet this biography by a technology journalist uses recently discovered and wonderfully detailed corporate log books to flesh out his contradictory persona. Watson was a short-tempered tyrant who surrounded himself with yes-men and managed an increasingly complicated company by instinct. Yet he inspired loyalty and enthusiasm through his relentless optimism and willingness to hire ordinary young people and give them a chance. He made IBM one of the first companies to accept women in its training programs, in the1930s no less. And when managers resisted hiring the first women graduates of the programs, he angrily fired every man who graduated the same year. Maney notes that IBM's dominant position in a booming industry may have played a large part in persuading employees to tolerate Watson's unpredictable behavior. But the author's delightful anecdotes showcase the quirky, human side of what became a major knowledge-based company. (Harvard Business Review, May 2003)

"...excellent use of transcripts...should be recommended reading for anyone who seriously wants to be a business mogul..." (Economist, 10 May 2003)

"...formidable in its research, vivid, insightful and often hilarious..." (Management Today, June 2003)

" intriguing study of the man who made IBM, Thomas Watson..." (New Scientist, 7 June 2003)

Maney, a USA Today technology columnist, has written a superb biography of Thomas Watson Sr., who took over the small Computer-Tabulating-Recording (C-T-R) Company in 1914 and fashioned it into the giant corporation we know today as International Business Machines (IBM). Watson had come to prominence for his work at National Cash Register (NCR), but owing to his involvement in a federal antitrust case, was forced out of his job. This might have destroyed a lesser man, but not Watson, who quickly moved on to C-T-T. A lifelong salesman, Watson always paid close attention to his company's customers, but he also felt that employees were equally important, offering high wages and good benefits. Although his management style was often regarded as imperious, he is credited with founding IBM's famous corporate culture, which enabled the company to succeed. As he aged, be became increasingly stubborn and brooked no dissent, which led to some terrible misjudgments, most notably his involvement with IBM's German subsidiary and receipt of a medial from Nazi Germany. But his successes far out-weighed his failures, and Maney has done a splendid job of getting inside his subject and bringing the enigmatic Watson and his contributions richly to life. Highly recommended for biographical and business collections. 'Richard Drezen, Washington Post News Research, New York (Library Journal, June 15, 2003)

"'s the definitive work to date..." (Focus, July 2003)

"...a compelling account of one of the twentieth century's most important business leaders..." (Information Age, June 2003)

Thomas Watson Sr.'s first really public achievement was a conviction (overturned) and jail sentence (never served) for running a dirty-tricks operation at National Cash Register. He paid himself better than any other chief executive in the country. He kowtowed to Hitler. He crippled his own company's machines so that he could later make customers trade up to faster, better, pricier models. And he built IBM into the most important technology company of the century. For this book, USA Today writer Maney was given access to a seldom seen trove of papers accumulated by Watson, who ran IBM from 1915 to 1952. The Maverick makes the CEO's achievement-pressing on with the business of growth even through war and the Depression-stand out clearly, and deftly humanizes the man without ever sugarcoating or apologizing for him. -Mark Gimein (Fortune, July 7, 2003)

"...Overall, this is an intriguing biography. Presented in a way that is often vivid and humorous..." (European Business Forum, Autum 2003)

Peter Krass

In an action-packed story that reads like a novel, Kevin Maney paints a convincing portrait of a man who, having been a convicted criminal, redeemed himself and reshaped the American business landscape. The career of Thomas Watson, the effective founder of IBM, is not only fascinating, but offers many critical lessons on management and personal conduct that remain extremely poignant today.

Rosabeth Moss Kanter

Like all great biographers, Kevin Maney gives us an engaging story and so much more. His fascinating and definitive book about IBM's founder is replete with amazing revelations and character lessons that resonate today. Among the gems: how a demanding curmudgeon managed to shape a collaborative corporate culture–and create a legacy that changed the world.

Marc Andreessen

The gripping story of sky-high ambition, iron willpower, huge bet-the-company gambles, humiliating failure, and unparalleled success–one of the best books ever written about the technology industry, about one of the most fascinating people in twentieth-century America.

Robert M. Menschel

The story of Watson and IBM is a compelling–and, at times, cautionary–tale of a determined, charismatic, flawed, and ultimately successful leader. Anyone interested in the story of business in America, the birth of high-tech, or simply the rags-to-riches tale of one determined businessman should read this book.

Jim Collins

At just the right moment when we most need it, Maney brings us a penetrating picture of one of the most important figures of the twentieth century, a man whose life teaches us about resiliency–individual and institutional–and much about what we need to recreate greatness in our own future.


The Legacy of Thomas Watson
Just about the time I finished my book about Thomas Watson Sr. and sent it to my editor, I was to interview IBM's outgoing CEO, Lou Gerstner.

His book, Who Says Elephants Can't Dance?, was about to be released. In it, he wrote often about Watson and the power of the culture Watson had built, and I looked forward to talking with him about his insights.

But I wasn't sure how well that was going to go. Never a big fan of the press, Gerstner decided to grant only two interviews to publicize the book. I got one of them, and I planned to use it to write a cover story for my employer, USA Today. I respected Gerstner, but on a few previous interviews over nearly a decade, he'd been prickly and intimidating. So I was expecting more of the same as Gerstner's public relations person, Laura Keeton, led me into a small conference room in IBM's headquarters.

There is one other relevant fact here: This happened to be on the day when Gerstner relinquished his position as IBM's chairman. As of his meeting with me, Gerstner was free of all IBM burdens.

The door opened. In breezed Gerstner. "Hello, Kevin! Haven't seen you in a long time," he said, smiling and shaking my hand. He was sunny and chatty -- a whole different Lou Gerstner. Over the years, some of his friends had told me he really was funny and charming in private. I was finally seeing that Lou Gerstner.

As we talked, I found that we had each discovered -- through different means -- the same core Thomas Watson. Gerstner had lived it and personally encountered it, eventually finding that the Watson culture formed the inner strength that would help bring IBM back from the brink. In his book, Gerstner wrote: "I came to see, in my time at IBM, that culture isn't just one aspect of the game -- it is the game." As CEO, Gerstner began reviving the best of Watson's cultural values.

I had discovered Watson through research and learned a great deal about him through the thousands of personal documents he'd left behind -- documents that had never before been made public. In my book, I had concluded that Watson's greatest creation was IBM's culture. He hadn't created just a company, he'd created a civilization. Watson, in fact, was the first to truly understand the power of a corporate culture and to purposefully build and tend such a culture.

I had about an hour with Gerstner. We talked about his tenure at IBM, what he learned, and even about his newfound respect for authors, which made me smile. "I found it an extraordinarily difficult process," he said.

When the interview was done, one particular moment stuck with me. It was a story Gerstner told me about Watson's son, Thomas Watson Jr., who took over IBM from Watson in 1956.

One morning in 1993, soon after Gerstner took the IBM CEO position, he walked out of his house to go to work. A car and driver were waiting for him, just as a car and driver had for years picked him up to take him to his offices at RJR Nabisco and American Express. "I went to sit down and realized there was somebody sitting in the other seat," Gerstner told me. There, in the back seat, sat Tom Watson Jr.

In an odd, almost cosmic coincidence, Gerstner lived right next door to Olive and Tom Jr. in Greenwich, Connecticut. The Watson house stood on the waterfront; Gerstner's was on an adjacent property, along a narrow road. Gerstner had lived there well before joining IBM, and the proximity had nothing to do with his getting the job. But imagine the odds of their being neighbors! "He asked if he could please ride to work with me," Gerstner said.

As Gerstner got over his surprise and climbed into the car, Tom Jr. let loose that he was angry about what had happened to "my company." He urged Gerstner to tear the place up and move quickly. Gerstner recalled that Tom Jr. emphasized "the need he had seen over and over again to take bold action." Tom Jr. prodded and encouraged Gerstner, but he did not attempt to tell the new CEO what he should do or how he should do it.

"I was sitting there thinking, 'This is really a special moment,' " Gerstner recalled.

In a sense, Tom Watson Jr. in that moment forged the link between the great IBM of the past and the possibility of reviving that greatness for the future. It was almost as if Watson Jr. rode in the car so he could hand Gerstner the keys to the Watson culture. A few months later, Watson Jr. died.

Today, a new CEO -- Sam Palmisano -- is running IBM. He is a lifelong IBMer. He has the IBM culture -- the Watson culture -- in his veins. Palmisano says over and over that he intends to meld the best of IBM's Watson-era DNA with the best of the new-generation DNA. Much to my fascination, Watson has once again come alive. Kevin Maney

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