While IBM (International Business Machines) is one of the most famous and successful companies of the 20th century, the impact it had on the world of sales under the leadership of its most famous CEO, Thomas Watson Jr, is lesser-known, despite almost single-handedly adding a sense of respectability to a profession which, until the early 1930’s, was considered disreputable, dishonest, and exclusively for the uneducated.
Early life and career
Thomas Watson Sr was born in 1974, and got into sales at a young age, giving up a teaching career after just one day, then serving a quick stint as an accountant before quitting to sell organs and pianos for a local hardware store. After realizing his ten-dollar-a-week fixed income wasn’t comparable to what he would have made if he was earning commission, Watson quit and got a job in Buffalo, NY, selling sewing machines for a company called Wheeler and Wilson.
According to son, Tom Watson, Jr.'s, autobiography:
“One day my dad went into a roadside saloon to celebrate a sale and had too much to drink. When the bar closed, he found that his entire rig—horse, buggy, and samples—had been stolen. Wheeler and Wilson fired him and dunned him for the lost property. Word got around, of course, and it took Dad more than a year to find another steady job” (Watson would later enforce strict rules at IBM against alcohol consumption, even off the job.)
Selling for NCR (National Cash Register Company)
After a brief stint selling company shares for a shady huckster named C.B. Barron, Watson opened a butcher shop, which quickly failed, leaving him with no money, no job, and no prospects. However, the butcher shop had a cash register he’d bought from NCR, The National Cash Register Company, one of the leading sales organizations in the world.
Watson called on the Buffalo branch manager for NCR, and hounded him until the man finally relented and offered Watson a job. He quickly learned the ropes, and was promoted to run the struggling Rochester branch of NCR, which he turned into a near-monopoly, earning himself a job at NCR headquarters.
Joining IBM
After being prosecuted for violating the Sherman Antitrust Act along with 26 other NCR executives (the charges were eventually resolved on appeal), Watson joined the Computing-Tabulating-Recording Company (CTR) as a General Manager, eventually working his way up to CEO. He renamed the company IBM (International Business Machines) in 1924, and grew it into a powerhouse, as the company moved from selling tabulating machine technology into computers, dominating the market for the better part of the 20th century.
Sales philosophy
From IBM.com: “In the early twentieth century, salespeople were not considered to be professionals. But, as competition between companies increased, managers began to see well-educated, well-trained and knowledgeable sales people as a source of competitive advantage. The Watsons were the ones who first stressed professionalism in sales. They set the standard and other companies started to follow them.”
Starting in the early days, Watson hired only the top-performing graduates from the top universities. He set up a sales school in the company’s headquarters town of Endicott, New York, in the 1920s—putting the trainees through six weeks of intensive training in selling and servicing IBM equipment.
“He insisted that IBM salesmen (they were only men in those days) wear conservative suits and conduct business to the highest ethical standards. Watson rewarded his top performers with bonuses and celebrations.”
“[IMB salespeople] were given up to 18 months of sales training—much more than other companies required. By the time they graduated and became quota-carrying sales people, they were experts not only in IBM’s products and services, but in the businesses of the companies and industries to which they sold. It was called “solution selling.” They were also known for going the extra mile for customers. Shelby H. Carter Jr., an IBM salesman for 14 years who went on to run sales for Xerox, recalls taking the train from his home in Baltimore to New York City on Christmas Eve in 1962 because retailer Abraham & Straus had a problem installing computers. One of the company’s top executives was so impressed with Carter’s response that he pitched in himself.”
Legacy
While IBM is no longer the dominant market force it once was, Watson’s legacy endures. And even though salespeople no longer wear suits to work, the role is considered as professional as any other, and tens of thousands of ambitious young men and women clamor for the opportunity to sell for any number of high-growth companies. Though he’s not around to see it, it’s a safe bet that Thomas Watson would look at today’s tech-focused world and smile.
