Comparing Revenue Growth
Revenue growth is a common metric to determine the success or failure of a Chief Executive Officer. Of course, growing revenue on a small base is easier then a large base, but growth in the early years also brings with it a set of issues that a well established institution may not have. So it requires more than just this chart to decide on IBM's best leadership. This is just one more piece in assembling a complex puzzle.
IBM's Century of Revenue Growth - 1914 through 2013
A few comments on this chart:
- (July 8, 2014) I have updated this chart from my book. I have uncovered information that allows a more accurate reflection on the early years of IBM under Watson Sr. (when it was the C-T-R Company). What I particularly like about this new chart is that it is easy to see the effect of the Recession of 1920-21 on IBM. The problems that the IBM of the early '90s faced were nothing new to this century old corporation. Watson Sr. learned a lot during this downturn. He was building his leadership style and corporate culture that he would call on to enable IBM to survive the Great Depression and position it for growth when the economy recovered.
- Revenue before 1956 does not contain worldwide revenue numbers. Revenue for 1956 and after is a worldwide number. IBM in 1965 restated all earnings in its annual report so that I could capture this worldwide data. The transition between Watson Sr. and Watson Jr. seemed the best place to make this change. Otherwise, by adding in the worldwide revenue at some point in the timeline, that growth number would be distorted.
- I have mapped some critical events from history in general and IBM in particular, as I believe current events can answer questions like, "How did revenue grow so fast in the early '40s?" When I post up the equivalent net income numbers you will see that net income did not rise during this time period. The reason? Watson Sr. limited IBM's profits during WWII and dedicated those funds for widows and orphans of IBM servicemen and women.
Peter E. Greulich is an author, publisher and public speaker.
He has written two books on IBM and three essays on Thomas J. Watson Sr.’s leadership during the Great Depression. His latest book, A View from Beneath the Dancing Elephant: Rediscovering IBM’s Corporate Constitution is a sweeping historical look at IBM that puts a spotlight on its current human resource practices in light of IBM’s time-tested human-relationship achievements.
It is a different perspective from Louis V. Gerstner’s Who Says Elephants Can’t Dance. It is a view from beneath—the perspective of an IBM employee-owner. IBMers with stories to share can reach Pete at IBMers@mbiconcepts.com.