When I got to IBM’s sales school in Endicott, New York, I was hoping that people would treat me like any other Joe Blow just starting out. How I could think that was possible, I don’t know. Dad was such a tremendous force in that town that as I walked down the street with my books under my arm, people would point and say, “Mr. Watson’s son.” During the first week I caused a stir by going into a bar after school to get a drink. The bartender said, “Doesn’t your father have a big policy about liquor?” I started to explain that the rule only applied to drinking on the job or on IBM property, but there was no point. I stopped going into the bars after that and began to think Endicott was a very unpleasant place.

Even though IBM headquarters was in Manhattan, the company’s soul was there in Endicott. That was where IBM built its punch-card machines, showed customers how they were used, and taught recruits like me how to sell them. Endicott is a little river town in the western part of New York State, not far from where Dad got his start selling sewing machines. In winter the weather is perpetually gray and damp, and whenever the wind blew over the tannery of the giant Endicott-Johnson Shoe Company, all of Endicott stank. Yet I think to Dad it was the most beautiful place on earth.

I spent two miserable winters there in 1937 and 1938. IBM in those days trained salesmen in two steps. New recruits would come to Endicott in October for machine school, where they learned the ins and outs of the product line. They’d spend the following spring and summer as junior salesmen helping veterans in the field. Then it was back to Endicott for another winter, to learn sales techniques. Finally they’d become salesmen with territories of their own and the chance to make a respectable living. In salary and commissions Dad paid the average salesman about forty-four hundred dollars a year—which is like earning thirty-eight thousand today—and top salesmen made several times that. The men in my class were an impressive group, mostly college graduates. We lived and ate at a crude old wooden hotel called the Frederick, which catered to IBM. Each morning we’d grab our books and walk three blocks up the main street of town, turn right onto North Street, and enter Dad’s world.

I have to admit he had a lot to be proud of. When he first came to Endicott in the spring of 1914, all CTR had there was a small factory manufacturing time clocks. The rest of North Street was lined with bars and greasy spoons. By 1937, thanks to IBM’s success, that end of town was totally transformed. Dad had bought up those greasy spoons and replaced them with modern white air-conditioned factories and an imposing research and development center with colonial pillars across the front. There was tremendous company spirit and vitality that anyone could feel just by walking through the plant. IBM’s employees earned well above the national average, and they worked in clean shops with spotless machinery and polished hardwood floors. In the hills behind the factory there were signs that Dad was giving employees the best benefits he could think of. He had bought an old speakeasy and turned it into a country club—liquor-free, of course—with two golf courses and a shooting range. Any employee could join for a dollar a year. Three nights a week the country club served dinner to give IBM wives a break from cooking. Dad also provided free concerts and libraries, as well as night courses to show employees how to get promoted. He believed in management by generosity and he was right: morale and productivity at Endicott were high, and in that great era of industrial unionization, IBM employees never found any need to organize.

Some of this Dad created himself, but many of his ideas came from a legendary businessman named George F. Johnson, the founder of the Endicott-Johnson Shoe Company. Long before Dad arrived, Johnson was a towering figure in Endicott. He had started out as an uneducated boy making boots in a factory near Boston, and he became famous as one of the most progressive businessmen in history. When his business boomed at the turn of the century, Johnson set out to make Endicott a model of what he called “industrial democracy.” He built the town center, a school, parks, athletic fields, swimming pools, a library, and a golf course, and donated them all to the town. He built stone arches on the highway leading in and out of Endicott, carved with the words “Home of the Square Deal.” He paid employees’ medical bills and offered them low-interest loans and good land near town so they could build their own houses. Johnson built his own modest house right in their midst. Even though he employed twenty thousand people in that valley, Johnson always thought of himself as a working man, the same way Dad always thought of himself as a salesman.

Johnson took Dad under his wing from the very beginning, welcoming him to Endicott and encouraging him to build up the CTR operation there. He taught Dad as much about employee welfare as John H. Patterson had about running a sales force. But in 1937 the Depression was causing Johnson’s magic to fade. The shoe business went bad, and he didn’t have enough cash flow to cushion his workers from the downturn. He had to lay off thousands of people. Meanwhile IBM kept getting stronger, and many of the sons and daughters of Endicott-Johnson families went to work for Dad. But my old man never lost his admiration for Johnson and used to visit him even after Johnson was very old and confined to bed. On one of these visits Dad took my brother, who was then going to Yale. Johnson, the great old progressive, took one look at Dick, the perfectly tailored undergraduate, and then he rose up from his pillow and hollered, “Well, what are you going to do about it?” Meaning, the world.

The IBM School House sat on North Street in the midst of Dad’s enterprise. Not many companies had real schools in those days; Dad copied the idea from the Cash and improved upon it greatly. The school’s aim was to produce future officers of the company, and Dad always talked to us trainees as if we were colleagues. Everything about the school was meant to inspire loyalty, enthusiasm, and high ideals, which IBM held out as the way to achieve success. The front door had the motto “THINK” written over it in two-foot-high brass letters. Just inside was a granite staircase that was supposed to put students in an aspiring frame of mind as they stepped up to the day’s classes. Engraved on the risers were the words:

THINK

OBSERVE

DISCUSS

LISTEN

READ

In class the first thing we did each morning was to stand up and sing IBM songs. We actually had a songbook, Songs of the I.B.M. It opened with “The Star-Spangled Banner,” and on the facing page was IBM’s own anthem, “Ever Onward.” There were dozens of songs in praise of Dad or other executives, set to tunes everybody knew. One of my favorites was to Fred Nichol, who started out as Dad’s secretary at the Cash, came with him to IBM, and most recently had been promoted to vice president and general manager. Making rousing speeches in praise of my father was one of Nichol’s specialties, and his success showed how far loyalty could carry a man at IBM. The song was sung to the tune of “Tramp, Tramp, Tramp, the Boys Are Marching”:

V. P. Nichol is a leader,

Working for the I.B.M.

Years ago he started low

Up the ladder he did go

What an inspiration he is to our men!

A lot of outsiders thought our singing custom was odd, but the man in charge of our class didn’t make a big deal out of it. He said, “We have these company songs. We think they build morale. Here is the way they go. Mr. O’Flaherty here at the piano will sing it through for you first and then you’ll all sing it.”

The teachers were veteran company men, all dressed, as we were, in regulation IBM clothes—dark business suits and white shirts with stiff collars. Dad believed that if you wanted to sell to a businessman, you had to look like one. There was a big picture of Dad looking watchful on the wall behind the lectern. The rest of the classroom was decorated with his slogans, and, as in every office of IBM, there was a “THINK” sign prominently displayed. Magazine cartoonists used to make fun of these signs, and IBM’s critics thought they were ridiculous: how could anybody really think in a company that was such a one-man show? But to everybody inside, the message was crystal clear: you would sell more machines, and advance faster, if you used your head.

I used to marvel at how willingly new employees embraced the company spirit. As far as I could tell, nobody made fun of the slogans and songs. Times were different then, and I suppose being earnest didn’t seem as corny in 1937 as it does today. And, of course, jobs were awfully hard to come by in the 1930s, so people would put up with a lot. As for me, I was pretty used to the IBM culture because I’d grown up at the source. It only bothered me when Dad let things get out of hand—as in 1936, when he commissioned an IBM symphony.

They gave us twelve weeks to learn everything about the products. We didn’t have to worry about scales or meat slicers, because Dad had sold off that division while I was at Brown. In its place he had bought a small company that was trying, without much success, to pioneer the electric typewriter. We studied those and the whole line of time clocks. But the bulk of our course work was on punch-card machines, which were in great demand and already accounted for more than 85 percent of the revenue of the company.

At first I was thrilled to get my hands on punch-card machines. I’d grown up around those things, and the basic concept fired my imagination just as it did Dad’s. In the history of industrialization, punch-card machines belong right up there with the Jacquard loom, the cotton gin, and the locomotive. Before punch cards, accounting and record keeping were clumsy operations that had to be done manually by clerks. Punch-card systems took away a lot of the drudgery—such as copying ledger entries and writing bills—and they did the work cheaply, reliably, and rapidly. This obviously was the wave of the future, and IBM was starting to attract high-caliber people because the machines were exciting to work with.

My father always said that those punch cards were what attracted him to IBM when Charles Flint approached him with the job. He had seen his first punch-card installation while he was still selling cash registers in 1904. A friend of his was using Hollerith machines at Eastman Kodak to keep track of the company’s salesmen. The way this worked was pretty simple. Each time a sale was made, all the information about it would get punched onto a single card. Those cards would be sorted and tabulated once a month to yield all sorts of information: what each man had sold, which products were selling best in which regions, and so on. Dad used to make a wonderful sales talk about the punch-card concept. He’d hold one up and say, “You can put a hole in this card representing one dollar—a dollar of sales, perhaps, or a dollar you owe someone. From that point on, you have a permanent record. It can never be erased, and you never have to enter it again. It can be added, subtracted, and multiplied. It can be filed, accumulated, and printed, all automatically.” Dad believed that here was the world’s answer to problems of accounting. All he had to do was keep developing this thing and IBM would revolutionize business. Whenever someone would use the term “punch cards” he would say, “These are IBM cards!”

Punch-card machines had become pretty sophisticated by the time I got to Endicott. They could sort four hundred cards a minute, print out paychecks and address labels, and duplicate, at very high speed, all of the accounting functions that companies were still doing by hand. I liked the idea that one set of cards enabled a customer to use the same data ten or twelve different ways, and I was pretty sure I’d be able to sell that. However, I quickly found out there was more to IBM school than appreciating what a punch card was. Everybody had to learn how to program the machines to do specific tasks. This involved arranging wires on a “plugboard,” which looked something like an old-fashioned telephone switchboard. We each had a plugboard to work with, and it soon became obvious that I was much better at understanding the potential of the machines than at actually plugging them up. After only two weeks I had to be assigned a tutor so I wouldn’t fail. I spent many nights with that guy in the deserted schoolhouse, trying to learn to hook up those little wires.

Before long IBM school felt even worse to me than Carteret or Hun or Brown. Not only was my performance poor, as usual, but I couldn’t escape being seen as T. J.’s son. Everyone in the school was trying to guess what Dad wanted done with me—without any regard for what I wanted myself. The head of the school, Garland Briggs, had been headmaster of the Hun School when I was there. Dad had picked him, in his simplistic way, because he needed an educator and Briggs was one he knew. I always thought Briggs was way out of his depth in that job. He had the big idea that it would please Dad if I were elected class president. So he put the other students up to it, even though they all knew I needed tutoring to get by. Unfortunately for me, I lacked the force of character to say, “I won’t have this.”

Endicott seemed more and more bleak. The place didn’t offer much in the way of fun, and even if it had, I felt obliged to behave soberly and responsibly. Usually I ate with my classmates at the hotel; if we went out it cost money, and most of them were poor. Besides, there was no place to go. Endicott’s restaurants were working-class Italian places, and the food they served always gave me heartburn. Once in a while I’d talk some of the Scandinavians in the class into going skiing for a weekend, but the local slopes weren’t very good. Soon I’d be back in my room at the Frederick trying to focus on some big black textbook with a title like Machine Methods of Accounting.

I complained constantly to my college friends outside the IBM school, and Nick Lunken, one of my fraternity brothers, decided I was a sitting duck for a practical joke. He called up one day and said he wanted to fly to Endicott to see me. I was delighted. He said, “If you have any friends in class who might like to have a ride in my airplane, bring them along.” So I got the vice president of the class and the treasurer, both of whom were trying hard to make their way in IBM. Nick was a little late, and we waited at the Endicott airport, which is very small. Finally a red plane landed and I could see Nick in the cabin with a huge grin on his face. The door opened and out came a pair of silk legs—really good legs. They looked to me like they were about four yards long. Then the rest of the woman came out, and she was very hot-looking. To this day I don’t know how Nick set it up. The woman hopped down and made a beeline for the side of the field, where a kid was standing with a horse. The door of the plane opened again and a racetrack tout came out, a guy in a long blue double-breasted chesterfield coat and black derby. He had a bottle of Scotch in his hand, and my two classmates began backing away from the scene. The woman got on the horse and started galloping around with her skirts up to her hips. Finally Nick stepped out of the plane.

I said, “For God’s sake, Nick, what is this?”

“I knew you’d want to meet Grandmother Verne,” he said. “She’ll get off that horse in a minute, but she’s very fond of horses. And this fellow’s here in case you want to lay a bet.”

I didn’t know anything about horse racing. But by then the other two officers of my class were disappearing around the airport building. They didn’t want to be connected with whatever terrible thing was going on. I bought Nick and his friends lunch at a hot-dog stand, and it seemed like hours before I could get rid of them. Finally I stood watching the plane disappear, and went resignedly back to my schoolbooks.

About once a month, Dad would show up. The local managers would get tense, because Dad was great at spotting something wrong that no one else had thought of and blowing up about it. No matter what aspect of the business he examined, he insisted on having a hand in the details and was always bristling with ideas and questions, forcing people to be on their toes. Often he gave orders without warning and it could happen at any hour, which meant that managers didn’t dare leave their offices or their houses when he was in town. Dad’s unpredictability would sometimes produce odd behavior in people. Garland Briggs, for example, tied himself in knots over whether to leave me at my studies or order me down to the train station to greet my father. Generally I took it upon myself to be there, standing dutifully on that cold platform as the train pulled in, shooting steam.

Dad’s favorite spot in Endicott was the IBM Homestead. This was a square old lovely Italian-style house with dark green tiles that originally belonged to the town’s founder. Dad had added a long wing with forty room-and-bath cubicles for guests, and that was where customers would come for one-week courses on how to use punch-card machines. The master suite was always reserved for Dad. From his window he could look out and see it all—the IBM golf courses, the shooting ranges, the country club, and the factory buildings down below. He would inspect the factory during the day—walking through the plant, putting his foot up on the stool of a guy at a drill press, and getting into a conversation that would sometimes last half an hour. Then he’d come out and bark orders to his secretaries based on what he’d heard. Dad was always alert to what the factory man needed. In 1934, after one of these tours, Dad overruled his factory managers and abolished piecework, saying it distracted people from producing high-quality goods.

At night Dad would go into the Homestead dining room, sit down next to some customer—they all wore badges that said who they were—and start a conversation. When dinner ended more people would draw up to the table and he might have fifteen or twenty to talk to. It was easy to see he was a great salesman. His words would come out in a dignified way, he’d make a few simple gestures, and whether they agreed with him or not, people would listen. After a while he’d say, “Gentlemen, let’s go into the living room and continue this conversation.” He’d talk until one or two in the morning. It was all right for him, but terrible for me if I was there. I was usually bored but I always had to stay to the end because he would feel hurt if I walked out.

There was no better way to learn about IBM than to be present when Dad visited a class. Some of the things he said didn’t mean much; he sermonized a lot about self-improvement, as in his letters to me at Brown. But he also told stories to illustrate his management principles. The most important story involved how he learned to sell cash registers. Dad got hired as a salesman for the Cash in Buffalo, New York, in 1896. During his first couple of weeks he failed to close a single sale. Finally he reported this to the branch manager, a tough old-timer named Jack Range, who blew up. He lit into Dad so hard that Dad used to say he was just waiting for the tirade to die down so he could quit. But when Range decided he had pushed my father as far as he could, he suddenly turned friendly. He reassured Dad and offered to help him sell some cash registers. He told Dad, “I’ll go out with you, and if we fall down, we’ll fall down together.” They loaded a big, fancy machine onto the wagon and sold it that same day. Range showed my father how to hit the right notes in talking to businessmen and how to improvise on the canned sales pitch that Patterson required all his salesmen to use. Range let my father watch him close several more sales, until finally Dad caught on.

My father carried that lesson in his bones. He wanted his managers to be on sales calls with a guy three or four times before labeling the man a failure. And he believed that each employee was entitled to help from those above. He would say “A manager is an assistant to his men.” That personal relationship between the individual and the supervisor became the IBM equivalent of the social contract.

I never disagreed with those lessons Dad taught, but I’d heard them all a hundred times before. Generally I tried to keep my distance during his visits. Although he never said anything about it, I was sure he was unhappy that I wasn’t earning top grades. All the same I persevered, and finally school was done. As a sort of graduation, the whole class went to Manhattan to attend the Hundred Percent Club. This was IBM’s annual sales convention, one of the morale-building techniques Dad had learned from Patterson. Hundreds of IBM men who had made their quotas were brought to New York, at company expense, for a huge banquet at the Waldorf. There were songs and awards and testimonials as each salesman stood at the podium and said a few words. It went on for hours. At the end I had to give a little speech. On behalf of the new graduates I gave my father a book of yachting prints, and he and I were presented to the audience as the newest members of the IBM Father-Son Club. This was something Dad had founded back in the 1920s, on the firm belief that nepotism was good for the business.