The Colossus That Works

(3 of 11)

(dark business suits, white shirts and striped ties) and what to drink (no alcohol, even when off the job), and were urged in signs posted everywhere to THINK. Aspiring executives usually started out in sales and marketing and were transferred so frequently that they took to joking that IBM stood for "I've Been Moved." Observes Gideon Gartner, chairman of the Gartner Group, a computer-research firm: "If you understand the Marines, you can understand IBM."

Many of the Watson-instilled codes remain in effect today, though in a softened form. All IBMers are subject to a 32-page code of business ethics. Sample warning from the blue-covered rulebook: "If IBM is about to build a new facility, you must not invest in land or business near the new site."

IBM salesmen can now drink at lunch, but if they do they are warned not to make further business calls that day. Male IBMers, who make up 80% of the 8,500-member U.S. sales force, must wear suits and ties when meeting prospective customers, although their shirts no longer must be white. Still, a neat and conservative appearance remains the IBM style. "I don't think I've ever seen an IBMer in a pink shirt or an outlandish tie," says Joseph Levy, a vice president for International Data, a Massachusetts-based computer market-research firm. The THINK signs have largely vanished, but the old admonition remains the title of the company's employee magazine.

IBM has combined Watson's stern codes with a deep and genuine concern for the welfare of employees, who number 215,000 in the U.S. with an additional 150,000 abroad. The company has often fired workers, but it has never laid anyone off to cut costs; instead it retrains and reassigns them. The company's salaries and perks are widely regarded as among the most attractive in the industry. New employees are expected to spend their working lives with the firm, and regularly go through intensive training programs to upgrade their skills. "We hire with a career in mind," says Edward Krieg, director of management development. Although some overseas IBM plants are unionized, the firm has never had a union vote in any U.S. facility.

The generous fringe benefits extend to recreation. The company provides memberships for less than $5 a year in IBM country clubs in Poughkeepsie and Endicott, N.Y. There, employees can play golf, swim and participate in numerous other sports.

Watson was especially adept at motivating workers and inspiring loyalty. He personally commissioned a company songbook and led employee gatherings in numbers Like Ever Onward.* The song was belted out with gusto during get-togethers of the IBM 100% Club, made up of members who have met 100% of their sales goals for the previous year.

Watson was succeeded by his son Thomas Watson Jr., who served as chief executive officer from 1956 to 1971. A powerful executive in his own right, the younger Watson had helped persuade his father to steer IBM into the computer age. After retirement, Thomas Watson Jr. was U.S. Ambassador to the Soviet Union under President Carter.

More than anything else, it was IBM's awesome sales skills that enabled the company to capture the computer market. Although it now seems hard to believe, IBM did not introduce the first commercial computer. Remington Rand did that in 1951 with a computer called