Written by Peter Gruelich

Watson Sr., the traditional founder of IBM, is well known for his corporation’s century-old, one-word imperative. Desk placards, wall posters and overhead signs instructed employees to THINK. THINK was imprinted on custom leather notepads, notebooks and briefcases. The external corporate magazine that the world associated with IBM for decades carried the brand THINK, and on the cover of its first issue was The Thinker by Rodin. This one-word message was translated into every language conceivable, and eventually, analysts, customers and cartoonists considered it synonymous with IBM.

Yet, history has forgotten that Watson Sr. only used THINK to stage an ACT. During the Great Depression he needed to increase the probability that action would follow thought. To encourage such actions he took a unique approach. On February 21, 1930, he told his executive team that “If a man thinks about his work — if he puts real thought into everything he does — he should be and will be forgiven for the mistakes he makes.” On October 29, 1930 — a year to the day after Black Tuesday crushed the New York Stock Market — he told a room full of new employees to “Think before you act, and then if you make a mistake you will be forgiven.” This was Watson Sr.’s formula for success: THINK and ACT, and don’t make the same mistake twice.

Robert H. Davis, a reporter for the New York Sun, saw this formula for success a few years later hanging overhead as he entered the reception area of IBM’s International Headquarters in New York City. He wrote of his impression standing there looking up.

THINK! Directly opposite was the luminous and inspiring phrase: We Forgive Thoughtful Mistakes! After reading the lines of these two laconic declarations no man of the IBM payroll can come to any conclusion other than that Tom Watson wishes to instill, namely: Put your mind on the job, express your convictions; make errors occasionally; hit a rock and remember where it was located in your path. And on the next trip sail onward to your anchorage.

During the Great Depression, Watson Sr. did not have the capital to invest in his culture. Instead, he invested his time; he maintained a constant focus; and he delivered a consistent, memorable and superlative message. But IBM would eventually reach a point beyond which it could not grow with the “old man” at the helm. It was not in this leader’s nature to delegate truly important decisions. As the traditional founder of IBM, he found it impossible — like so many entrepreneurs — to completely let go. All major decisions of thought and action still flowed through his corner office. When Watson Sr. died in 1956, Watson Jr. faced a decision. His father was one of the world’s most recognized corporate, philanthropic and humanitarian figures. His father counseled presidents, walked with kings and queens, and every employee knew what this lone figure had accomplished for their company, their country and their fellow man. The easy route would have been to continue along his father’s well-proven path. The son, though, was not like his father. Although — like his father — he loved the company, he did not wish to live for it. In 1956, following his father’s death and now IBM’s Chief Executive Officer, he acted. He spurred growth by removing one significant barrier: a corner office that needed to be involved in major decisions. He wanted everyone to have the same destination but allow them the freedom, in their unique situations, to determine the best path forward. So he called a meeting in historic Williamsburg, Virginia — because he meant it to carry the aura of a constitutional convention — and started building his IBM.

To encourage independent thought, embolden individual action and enable decentralized decisions, he founded a guiding corporate constitution on three words: Respect for the Individual, Service to the Customer, and the Pursuit of Excellence.

At the time, analysts, shareholders, employees and customers alike wondered if the son could fill the father’s shoes. In 1956, after forty years under Watson Sr., IBM employment stood at 56,000, net income at $56 million and revenue at $500 million. Rather than taking another four decades to match those numbers, Watson Jr. added, on average, 56,000 employees every four years, $500 million in revenue almost every year, and $56 million in additional net income every nine months. When Watson Jr. stepped down as CEO fifteen years later, revenue per employee had grown by 212%, net income per employee by 310% and the number of stockholders by more than 2,000%. Under his watch, IBM became the corporation his father had always envisioned. Watson Jr. didn’t fill his father’s shoes, he manufactured a new pair that was more comfortable.

Tom Watson Jr. fully unleashed a power source that his father only partially tapped: the human potential.

Encourage people to think. Embolden and decentralize action. Forgive thoughtful mistakes.

Allow others to find their own anchorage. And just let go.

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