How IBM Built Its 20th Century Brand
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Published June 8, 2021
Updated April 30, 2023 |
If you inspire character and moral courage, your brand will be known for doing what is right; if you inspire mutual respect, your brand will be known for getting things done; if you inspire the pursuit of wisdom, your brand will be known for powerful forward movement; if you inspire independent thinking, your brand will be known for imagination, creativity and leadership.
If you want your brand to be for real, focus on your employee’s internal character, and your external brand will flow outward through their actions. Not only do chief executives desire such qualities in their employees, but employees desire such qualities in their chief executives.
The country needs more engaged chief executive officers driven by the qualities highlighted below: wisdom, character, courage and who are habitually courteous and always thinking.
If you want your brand to be for real, focus on your employee’s internal character, and your external brand will flow outward through their actions. Not only do chief executives desire such qualities in their employees, but employees desire such qualities in their chief executives.
The country needs more engaged chief executive officers driven by the qualities highlighted below: wisdom, character, courage and who are habitually courteous and always thinking.
How IBM Built its 20th Century Brand
- An External Corporate Brand Built on Internal Employee Character
- Internal Qualities Not Blue Suits Built IBM’s External Brand
- Character and Courage
- Courtesy
- Acquire Knowledge but Achieve Wisdom
- Think
- Do You Want a Real Corporate Brand?
An External Corporate Brand Built on Internal Employee Character
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They say a man is known by the company he keeps. We say in our business that a company is known by the men it keeps.
Thomas J. Watson Sr., Quarter Century Club, 1926
Just after the turn of the last century, corporations were in their infancy. Chief Executive Officers were alone at the top and visibly responsible for all policy decisions. Unlike today, they could not defer responsibility for an executive decision to one of many in today’s cadre of CEIEIOs—alternative chief executives with acronyms like CFO, CIO, COO, CMO, CTO or CPO to name a few. Even the best run organizations at the time only had treasurers or controllers, not Chief Financial Officers. There were no Chief Marketing Officers or even the concept of a corporate brand.
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Select image to read article on Bulldog Drummond
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Without historical precedent, Chief Executives often led by the seats of their pants. They relied on their instincts and adapted their actions through trial and error.
"You are going to contribute thoughts, ideas and ideals to all the people with whom you come into contact."
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One Chief Executive Officer’s intuition proved worthy over the long term. He laid the foundation for one of the 20th Century’s greatest brands--International Business Machines Corporation.
Although I have never found any record where Tom Watson used the word “brand,” he knew the limits of his ability to control his corporation’s image.
Even though he was one of the first chief executives to walk among sovereigns—kings, queens, emperors and prime ministers, to advise presidents like FDR, Truman and Eisenhower, and to lead businessmen worldwide as the head of the International Chamber of Commerce, he was just one man. He needed the men and women by his side who stood in front of his customers. In 1930, he told his employees: |
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There are very few of the people with whom you come in contact who will ever see our factories, our executives or our home offices. Therefore, they judge our company and our ideals by you. …
The greatest satisfaction and pleasure that I have in this business is in sending you out to all corners of the world, taking with you the IBM company, because I know that you are going to represent it in the way that we want it represented. Thomas J. Watson Sr., One Hundred Percent Club banquet, 1930
IBM’s Chief Executive knew every interaction between the corporation’s employees and its customers either positively or negatively influenced the company’s brand—its reputation within society. He trusted that his corporation would eventually be known by the men and women he kept.
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"When any man tells you that one man alone can do a big job, he knows he is not telling the truth."
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For the long-term success of his corporation, he was not focused on the externals of a person but the internals.
Internal Qualities Not Blue Suits Built IBM’s External Brand
In a day when salesmen were seen more as ruffians than businessmen, IBM had to fight for corporate legitimacy. History records well the corporation’s earliest fascination with blue suits, white shirts with stiff collars, ties and wing-tip shoes. Personal appearance was important. Tom Watson told his employees that first impressions were important but that, although appearances were important, no successful businessman came in a pre-determined package of physical characteristics.
In 1932, he described to the Freshman Convocation Class of the NYU School of Commerce his expectations of the external wrappings of a businessperson.
He [a businessperson] may be tall or short, corpulent or slight of build, old or young, handsome or homely. In short, they may be almost anything so far as externals are concerned. … to ascertain what constitutes a successful businessman, we must take him apart and find out what makes him tick.
Although external appearances were important, the chief executive focused on what made a person “tick” because after the first impression wore off, it was the individual’s internal qualities that solidified the customer’s initial perception. A blue suit and white shirt may have opened the door, but a positive customer relationship was the substrate of a long-term, highly profitable relationship, and such a relationship opened doors to other customers.
Most historians have gotten Watson’s focus on attire wrong since it seems all too true that descriptive, drama-filled narratives interest readers more than an individual’s lifetime pursuit of balance. At Watson Sr.’s funeral the minister eulogized the chief executive’s lifetime outlook on appearance:
In 1932, he described to the Freshman Convocation Class of the NYU School of Commerce his expectations of the external wrappings of a businessperson.
He [a businessperson] may be tall or short, corpulent or slight of build, old or young, handsome or homely. In short, they may be almost anything so far as externals are concerned. … to ascertain what constitutes a successful businessman, we must take him apart and find out what makes him tick.
Although external appearances were important, the chief executive focused on what made a person “tick” because after the first impression wore off, it was the individual’s internal qualities that solidified the customer’s initial perception. A blue suit and white shirt may have opened the door, but a positive customer relationship was the substrate of a long-term, highly profitable relationship, and such a relationship opened doors to other customers.
Most historians have gotten Watson’s focus on attire wrong since it seems all too true that descriptive, drama-filled narratives interest readers more than an individual’s lifetime pursuit of balance. At Watson Sr.’s funeral the minister eulogized the chief executive’s lifetime outlook on appearance:
The truth came to him simply—he believed clothes don’t make the man, but they assist the gentleman.
Rev. Dr. Paul Austin Wolfe, Brick Presbyterian Church minister
IBM’s 20th Century priorities were always on an individual’s internal qualities. These qualities just happen to show up on the customer’s doorstep packaged in a distinctive blue suit. Over the course of the Great Depression, in speeches and writings, Watson Sr. defined the hallmarks of those who built his corporate brand. He focused on internals to achieve an external result.
These are a few of his thoughts on what he considered important qualities:
These are a few of his thoughts on what he considered important qualities:
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Character and Courage |
Character should never be confused with reputation. It is not a matter of externals. It is a thing of moral fiber—of moral strength or weakness. It is what you are. … Closely allied to character we find courage. I do not refer to physical courage, but to that finer quality—moral courage. This attribute, without which a man cannot get very far in life, impels him to do the right thing, when it should be done … no matter … how much his physical being shrinks from the task.
Thomas J. Watson, “The Earmarks of a Businessman,” 1932
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At the top of his list of internal characteristics were character and moral courage—that which drives a man to do the right thing, when it should be done, no matter how much the physical being shrinks from the task. In contrast to a person’s external reputation—what people think you are—character is who you truly are: it is your moral fiber. This is an individual who accepts responsibility for their decisions..
Two years later, B.C. Forbes documented that these two qualities were the top two that most chief executives desired in a person. In September 1934, Forbes asked the following question of the world’s top industrialists, “If you were to name one quality which you regard as the most important, the most valuable, the most desirable of all in a person, which would you specify?” The top five are listed to the right. When these two qualities emanate from a corner office, they ensure a corporate-wide belief in right over might. |
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Courtesy |
You men never had a successful experience in your life with a workman who did not have good manners. The fellow that is always rough and doesn't show you the consideration and the courtesy to which, as foreman, you are entitled, is not the kind of man you want in your department. You need the kind of men who are gentlemanly and courteous …
… Of course, we must always set the right kind of example ourselves as to character and good manners.
… Of course, we must always set the right kind of example ourselves as to character and good manners.
Thomas J. Watson Sr., One Hundred Percent Club speech to factory foreman, 1933
Expecting courtesy almost seems like a yesteryear’s quaint quality. Yet five decades after Watson Sr. told his foremen to consider courtesy on par with character, Peter F. Drucker wrote quite eloquently in his seminal book Management:
Bright people—especially bright young people—often do not understand that good manners are the “lubricating oil” of an organization. … It is a law of nature that two moving bodies in contact with each other create friction. Two human beings in contact with each other therefore always creates friction. … manners are the ‘lubricating oil’ of an organization.
As Watson Sr.’s organization grew, he knew that courtesy got a thing done. Watson Jr. embedded this concept into one of his basic beliefs—respect for the individual. If an organization of a few hundred, a few thousand, or a few hundred thousand is to move forward it takes respect and courtesy to control the passions flamed by personal ideas and precious ideals.
Bright people—especially bright young people—often do not understand that good manners are the “lubricating oil” of an organization. … It is a law of nature that two moving bodies in contact with each other create friction. Two human beings in contact with each other therefore always creates friction. … manners are the ‘lubricating oil’ of an organization.
As Watson Sr.’s organization grew, he knew that courtesy got a thing done. Watson Jr. embedded this concept into one of his basic beliefs—respect for the individual. If an organization of a few hundred, a few thousand, or a few hundred thousand is to move forward it takes respect and courtesy to control the passions flamed by personal ideas and precious ideals.
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Acquire Knowledge but Achieve Wisdom |
Without wisdom, knowledge is useless. Wisdom is the power that enables us to make practical use of our knowledge.
Thomas J. Watson Sr., IBM Sales School, 1932
Watson believed that knowledge that wasn’t applied was useless. He wanted his employees to strive for wisdom—that understanding derived from applying knowledge and experiencing the results. He encouraged and emboldened the individual’s pursuit of wisdom by forgiving thoughtful mistakes. He told his employee-owners that the only person that does not make mistakes is the person that does not try anything.
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THINK |
No man ever attained greatness who did not think for himself.
Thomas J. Watson Sr., Freshman Convocation at NYU, 1932
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THINK was the seminal standard set by Watson Sr. It was the word that decentralized and empowered. This singular word recognized that every customer engagement was unique. No centralized corporate intelligence or standardized rule book can capture every customer’s unique temperament, distinctive business situation, future sales opportunity or comprehend the complexities of worldwide social differences. This was left to thinking individuals at the point of engagement.
Centralization destroys a brand through the blandness of standardization. Thinking decentralizes and empowers the growth of a brand through individual imagination and creativity. Thinking should be the foundational quality for every new generation of leaders. |
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Inspire Employee Character to Build a Brand
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If you inspire character and moral courage, your brand will be known for doing what is right; if you inspire mutual respect, your brand will be known for getting things done; if you inspire the pursuit of wisdom, your brand will be known for powerful forward movement; if you inspire independent thinking, your brand will be known for imagination, creativity and leadership.
If you want your brand to be for real, focus on your employee’s internal character, and your external brand will flow outward through their actions. Not only do chief executives desire such qualities in their employees, but employees desire such qualities in their chief executives. The country needs more engaged chief executive officers driven by the qualities highlighted above: wisdom, character, courage and who are habitually courteous and always thinking. |
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Such executives can set the example in this new century for their employees who will follow suit to build the 21st Century’s new brands.
In the 20th Century, IBMers were the internal character of their corporation, and they found their external reflection in their customer’s eyes. When a corporation’s customers have on-going, long-term, consistently positive experiences with a corporation’s internal character—its moral fiber, then the corner office has built a lasting brand.
Watson Sr. may have started the journey but, as he hoped, his employees finished it.
They created IBM’s 20th Century brand.
Start your corporation’s journey.
Today!
Watson Sr. may have started the journey but, as he hoped, his employees finished it.
They created IBM’s 20th Century brand.
Start your corporation’s journey.
Today!