Maybe a hard rough exterior covered this manager’s caring and concerned heart. Maybe he had learned this as a motivational technique—to get a man’s attention first and then show him that “we” are in this together. Maybe he was just a man who instinctively knew men. Whatever it was, this man exemplified to Tom Watson a core set of values that would lay the foundation for his future success.
On Black Tuesday, the Stock Market plunged 13%. Ugly crowds full of fear, uncertainty and doubt milled about the streets surrounding Wall Street. This wasn’t the first or the last plunge, but it was the beginning of an almost four-year drop in industrial production.
The market would continue its decline to lose almost 90% of its value. Companies hundreds of times larger than The IBM, with deeper financial pockets, with better connected executives, with better diversification, with longer and more prestigious histories and with access to funds that The IBM could only dream about were failing all around him.
At the Great Depression’s trough, one in four people were unemployed. Unlike today, these were single income households; there were no credit cards to carry the family through the month and the loss of that lone income was the supreme financial disaster. The loss of that next paycheck meant immediate hunger, standing in food lines, homelessness and possible starvation. Men committed suicide rather than face their own failure.
Tom Watson felt that pain, and it was a great burden for him as a concerned Chief Executive Officer. He felt the constant need to employ more men.
The day after Black Tuesday, Tom Watson stood in front of a class of eager, enthusiastic and possibly apprehensive young men ready to start their careers with The IBM. This day he chose to talk about spirit—the spirit of The IBM. In this, the most dispiriting of economic times, he would ask them to “pull together as one man” to build and keep that spirit alive.
A few short months later, he spoke before the 1929 One Hundred Percent Club. By now, the true economic impact of the stock market crash was reality. The song that epitomized the glory of the roaring twenties, “Blue Skies,” was a cruel joke. There were no blue skies. There were only dark and stormy skies. The swells of this economic storm were so large they looked as if they would have crushed any ship in their path. The storm’s path was so wide and so deep there was only one conceivable course—straight ahead.
Tom Watson steered that course.
His sales force would have to sell during a time when buyers were scarce. He looked to them to keep The IBM factory men employed. To achieve success, these salesmen would have to grasp hold and exploit every opportunity in front of them.
For his salesmen, it would take some “walking and talking.”
It would take everything he discussed to survive this storm: spirit, democracy in business, cooperation, personal innovation, personality and ongoing self-improvement through self-study. He found a theme in education that would continue for the rest of his life; education was not just the study of the past but must include a vision of the future.
This chapter ends with Watson’s closing remarks to his 1929 One Hundred Percent Club sales team. In “The Forthcoming Year,” he instructed all the men who made their quotas and achieved success to head back into the field and assist the other men who were not so fortunate. For The IBM to prosper and grow the next four years—rather than just survive—it would take every IBMer helping every other IBMer.
He would state, “A man is known by the company he keeps. A company is known by the men it keeps.”
He was setting a standard for every businessman.
He wanted to keep each and every one of them.
He would fight to make that happen.
Source: Frank G. Steindl, Regents Professor of Economics Emeritus at Oklahoma State University, “What Ended the Great Depression?”