Inside Ibm's Historic Turnaround - Part 1 (1885 - 1970)

Inside IBM's Historic Turnaround - Part 1 (1885 - 1970)

In the history of modern business, many companies have gone from being industry leaders to the verge of extinction. Through the valiant efforts of management teams, some of those companies have succeeded in resuscitating themselves and living on in the shadow of their former stature. Only one company has been at the pinnacle of an industry, fallen to near collapse, and then, beyond anyone's expectations, returned to set the agenda. That company is IBM.

IBM is one of the oldest and largest companies in America and has gone through incredible changes since the very first patent was issued to Julius Pitrap, for a computing scale in 1885. IBM was incorporated in the state of New York on June 15, 1911 as the Computing- Tabulating- Recording Company (C-T-R).

In 1914, when the diversified businesses of C-T-R proved difficult to manage, Thomas J. Watson, Sr. Watson, joined the company as general manager. This is also the same year that IBM hired its first disabled employees, 76 years before the Americans with Disabilities Act.

Watson implemented a series of effective business tactics: generous sales incentives, a focus on customer service, an insistence on well-groomed, dark-suited salesmen and an evangelical fervor for instilling company pride and loyalty in every worker.

Watson boosted company spirit with employee sports teams, family outings and a company band. He preached a positive outlook, and his favorite slogan, "THINK," became a mantra for C-T-R's employees. Within 11 months of joining C-T-R, Watson became its president. The company focused on providing large-scale, custom-built tabulating solutions for businesses, leaving the market for small office products to others. During Watson's first four years, revenues more than doubled to $9 million.

During the Great Depression of the 1930s, IBM managed to grow while the rest of the U.S. economy floundered. Thomas J. Watson, Sr., took care of his employees. IBM was among the first corporations to provide group life insurance (1934), survivor benefits (1935) and paid vacations (1936). When most other businesses had shut down, Watson kept his workers busy producing new machines even while demand was sagging. Thanks to the resulting large inventory of equipment, IBM was ready when the Social Security Act of 1935 brought the company a landmark government contract to maintain employment records for 26 million people. It was called "the biggest accounting operation of all time," and it went so well that orders from other U.S. government departments quickly followed.

In 1935, 28 years before the Equal Pay Act, IBM recruited its first professional women. Founder, T. J. Watson, Sr., said, "Men and women will

do the same kind of work for equal pay. They will have the same treatment, the same responsibilities and the same opportunity for advancement."

When World War II began, all IBM facilities were placed at the disposal of the U.S. government. IBM's product line expanded to include bombsights, rifles and engine parts - in all, more than three dozen major ordnance items.