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We are dedicated to giving our customers the best possible service. Our products and services bring profits only to the degree that they serve the customer and satisfy his needs.

Thomas J. Watson Jr.

IBM's Basic Belief: Service to the Customer

Published August 4, 2021
Picture of three IBM Wild Ducks in flight.
​In 1917, B. C. Forbes published Men Who Are Making America. He asked businessmen all over the country, “Who are our fifty foremost businessmen?” From the list he culled the top fifty and set out to discover who these men were.

He found from his inquiry that these individuals succeeded in a land of liberty where “neither birth nor education, nationality nor religion, heredity nor environment were barriers—or passports—to success.” He discovered that “worth alone counts” and that the “only caste in America is merit.” After conducting his interviews he summarized his findings with this: “Success is coming to be spelled Service. Providence would seem to have ordained that the man who serves most shall reap most. The success that consists only of dollars is no longer accounted worthwhile success.”

I am sure that Watson Sr., traditional founder of IBM, sitting at the time in the corner office of the C-T-R Company, nodded in agreement. He already knew that his corporation was and would continue to be in good company. Thirty years later, as service reigned supreme, his face and his “The IBM” graced the pages of the next edition of B. C. Forbes’ book: America’s Fifty Foremost Business Leaders.

Later, Watson Jr. pegged service in The Basic Beliefs as: “Service to the Customer.” But when a whole company believes that “IBM Means Service,” that attitude spilled out into every critical business relationship with customers, business partners, employees, shareholders and into their shared societies.
​
Service, once it is released, cannot be restrained.
 Service to the Customer: The Objective
Image of IBM's Basic Beliefs as IBM's Corporate Constitution: with the emphasis on
We are dedicated to giving our customers the best possible service. Our products and services bring profits only to the degree that they serve the customer and satisfy his needs. This demands that we:
  • Know our customers’ needs and help them anticipate future needs.
  • Help customers use our products and services in the best possible way.
  • Provide superior equipment maintenance and supporting services.
 Service as the Objective Empowered First-Line Managers
I remember sitting in an impromptu meeting as an administrator. A customer had called to complain to the sales manager (at the time called a marketing manager) that it was as if three different companies were calling on him. Three IBM sales representatives were fighting over who would sell their product. Three separate proposals had shown up on his desk. The customer's employees were at war with each other.
​
If I remember correctly they were selling three different technologies to a legal firm in Austin, Texas: IBM Typewriters, IBM Displaywriters, and an IBM 5520 Administrative System. Of course, each wanted 100% of the business. I knew it was going to be a tense meeting as commissions were on the line and these were three strong-willed individuals—salesmen.

The sales manager came into the room, sat down and set the tone for the meeting by saying, “We are going to design the best long-term solution for this customer based on what they need and what we have to offer them to fill that need. After that is done, I will ensure that everyone in this room is compensated fairly, because … as we all know … if we don’t do right by the customer, we will all be looking for work in the near future. … Let me be clear, the next call this customer makes to IBM, I will not be the one in control.”

Yes, there were still arguments. Yes, there were very tense moments. But the tone had been set based on the corporation’s basic belief of Service to the Customer: First and foremost, make the customer successful.

The first-line manager reminded them of their ultimate objective: service, not commissions.
 Service Underpinned Success
Jim Collins wrote in Built to Last that visionary companies treat profit like “oxygen, food, water, and blood for the body; they are not the point of life, but without them, there is no life.” In a capitalistic system, profits are a necessity: profits improve products, pay dividends, print paychecks, provide benefits, and safeguard social stability.

How a corporation goes about achieving these profits is a critical corner office decision.

​This principle of service took root early in IBM history:
​
There is something in business bigger than the dollar. … A legitimate business must be of real service to the public and promote economic progress. Only when a man feels that he is working for the general good as well as for his own can he do his best.
Thomas J. Watson Sr., IBM Sales Meeting, July 10,1919
Even in 1919, IBM was a "visionary company."

​Service was the point​—the objective.

Roam Around the IBM Wild Duck Information with the Links Below
or [Return to the Wild Ducks Home Page]
The Wild Goose
Constitution
Dissenters
Respect
Service
Excellence
© 2022 Peter E. Greulich. All Rights Reserved
​
Information posted on this site recognizes the legal right of copyrighted material. The following material is considered in the public domain effective January 1, 2022: (1) works published in the United States prior to 1927, (2) works published in the United States after 1926 but before 1964 with a proper © copyright notice that were not renewed in their 28th year, and (3) works published in the United States before 1978 that have no © copyright notice, and (4) all unpublished works created over 120 years ago. Other documents used here that do not fit these criteria are used in good faith and a belief that such usage would withstand a test of fair use. Any concerns with the public domain or fair usage of material on this site will be removed until a discussion can resolve the matter with its permanent removal or republication. Just use the "Contact" menu item above or the "Contact Us" hyperlink provided here: [Contact Us]
  • Home
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        • Procter, William C.
        • Rockefeller Sr., John D.
        • Rosenwald, Julius
        • Sloan Jr., Alfred P.
        • Swope, Gerard >
          • Swope of G.E.
          • The Swope Plan
          • Selected Addresses
        • Verity, George M. >
          • True Steel
          • Character & Success
        • Wanamaker, John >
          • A Business Biography
          • Retail Firsts
        • Watson Jr., Thomas J. >
          • A Business and Its Beliefs
          • Management Briefings
          • Father, Son & Company
        • Watson Sr., Thomas J. >
          • Human Relations
          • Men-Minutes-Money
          • The Lengthening Shadow
        • Young, Owen D. >
          • Selected Addresses
          • New Industrial Leader
      • Capitalists >
        • Baruch, Bernard M. >
          • My Own Story
          • The Public Years >
            • A Review
            • Second Thoughts
        • Schiff, Jacob H.
      • Journalists >
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          • Autobiography
          • The Color Line
          • Woodrow Wilson
        • Crowther, Samuel >
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          • 101 Unusual Experiences
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          • Woodrow Wilson's Last Words
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        • Martin Schroeter
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        • Resource Actions
        • Age Discrimination >
          • Cutting Old Heads
        • Employee Engagement
        • Aren't Buying Into IBM
        • Massive Work Slowdown
        • Failure of Work at Home
      • Financial Engineering >
        • Workforce Rebalancing
        • Aggressive Bookkeeping
      • Shareholders >
        • Share Buybacks
        • Shareholder Risk
        • Employee Engagement
        • Warren Buffett's Mistake
        • Do Share Buybacks Work?
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        • Overall Performance >
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        • First Year Performance >
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          • Revenue & Profit Growth
          • Revenue & Profit Productivity
          • IBM Market Value
          • Shareholder Returns & Risk
          • Share Buybacks
        • The First 100 Days
      • Ginni Rometty Overview >
        • Shareholder Value
        • Shareholder Risk
        • Share Buybacks
        • Dividend Strategy
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        • Revenue & Profit Growth
        • Revenue & Profit
  • 20th Century IBM
    • Corporate Performance >
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        • Shareholder Returns
        • Revenue Growth
        • Revenue Per Employee
        • Profit Growth
        • Profit Per Employee
        • Market Value
        • Goodwill
        • Economic Contractions
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        • Stock Market Headwinds
        • CEO Historic Footnotes >
          • IBM's Founding Team
          • Financial Engineering
          • The Greatest Gamble
    • Corporate Practices >
      • IBM Anniversaries
      • IBM Benefits
      • IBM Creativity >
        • IBM Cartoons
        • IBM Song Books
        • IBM UK Dictionary
        • IBM Computing Dictionary
      • IBM Wild Ducks >
        • The Wild Goose
        • Royal Dissenters
        • Corporate Constitution
        • Respect for the Individual
        • Service to the Customer
        • Pursuit of Excellence
    • Corporate Products >
      • 1890: U.S. Census
      • 1920: Dayton Scales
      • 1940: The Electromatic
    • Thomas J. Watson Sr. >
      • Articles by Watson >
        • On World Peace
        • On the Cost of War
        • On Public Education
        • On Thomas Jefferson
        • On Thoughtful Mistakes
        • On Stakeholder Relations
      • Articles about Watson >
        • The $1,000-A-Day Chief Executive Officer
        • Employees are Valued
        • Democracy's Man o' War
        • Human Relations in 1956
        • A CEO Who Earned His Pay
        • The Lengthening Shadow
      • Slice of Life Stories >
        • Dali, Salvador
        • Drucker, Peter F. >
          • Authority and Power
          • Short-Term Thinking
          • A Corporate Culture
          • Raising Business Issues
          • Focus on Principles
          • Character and Manners
          • Knowledge Workers
          • Recognizing Ability
          • Individual Respect
          • Employee Paternalism
        • Eastman, George
        • Penney, J. C. (James Cash) >
          • Watson Homestead
          • Golden Rule Businesses
        • Fighting Discrimination
      • Pre-World War II >
        • A Lost Dream of Peace
        • USO Camp Show Founder
      • World War II Effort >
        • Selling War Bonds
        • Production Awards
        • Controlling Profits
        • Machine Records Units
        • Wartime Contributions
        • Widows & Orphans Fund
        • Declaring Human Rights
        • Supporting Home Morale
        • Employee Military Service
        • War's End & Reconversion
      • Post-World War II >
        • Endicott Memorial
        • Poughkeepsie Memorial
        • Rehiring WWII Veterans
      • A Pajama Party
      • A 1943 Tax Problem
      • The Story of "THINK"
      • A Gift of Retirement
      • Learning from Crises
      • IBM Employee Housing >
        • Construction Timeline
      • Two Journalists "THINK"
      • A Buddy Davis Interview
      • Quotes of Watson
      • Quotes about Watson
      • Women in the Workplace
      • A Successful Rebranding
      • Tom Watson's Wild Ducks
  • Articles
    • Corporate Articles >
      • High-Performance Corporations
      • The Art of the Restart
      • Crises, Recoveries & Lessons Learned
      • Strategy Should Create Human Relationships
      • A Time-Tested Corporate Constitution
      • IBM, JC Penney and The Golden Rule
      • How IBM Created its 20th Century Brand
      • The Greatest Business Risk of the 20th Century
      • How to Grow a Business
      • The Importance of Sales Productivity
      • How Much Is a Great CEO Worth
      • Let Your Guard Down
    • Business Articles >
      • Business Witticism
      • The Golden Rule in Business
      • Who and What Built Early American Capitalism
      • Capitalism Needs Industrialist Minded CEOs
      • Producing Corporate True Steel
      • CEO Perspectives >
        • Rules of Success
        • Top Employee Qualities
        • Industrialist vs. Capitalist
      • An Open Letter to the World's CEOs
      • Henry Ford Takes Control
      • The Razor Blade Business Model
      • Two Successful 20th Century Businesswomen
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      • A LinkedIn Incognito Mode
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