In business history, IBM is the central player of the late 20th century. Academic work on IBM fills up libraries like punchcards used to fill offices. But I’ll confess that I’ve never read too much about it. Two recent books have come out on the subject, and both seem to be authoritative accounts, so I’ve read both this year to fill in this gap in my knowledge. The first is James Cortada’s IBM: The Rise and Fall and Reinvention of a Global Icon, and the other is The Greatest Capitalist Who Ever Lived by Ralph Watson McElvenny and Marc Wortmon.
I planned on writing a whole history of IBM, but it felt like a Wikipedia page. Then, I was going to do a clever compare-and-contrast of these two very different books. But that felt tedious. In the end, much to my chagrin, I had to admit that I find much of IBM’s history essential but dull. So, instead of a comprehensive post, let me highlight five things below that I did find fascinating about the history of IBM.
#1: Building a technical company doesn’t always take a technical person. The original Watson, TJ Sr, started his career as a lumberjack, earned his chops as a salesman selling cash registers, and became the highest-paid executive in the US and the foremost technology company in the world. Though he seems remarkably unlikeable in his great-grandson’s telling (Ralph Watson McElvenney, the author, is a blood relation), one can’t help but see him as a classic inspirational tale.
#2. Good “culture” is subjective. McElvenny and Cortada (himself a 38-year veteran of IBM) both emphasize the importance of IBM’s culture (as other authors have done). And, on some level, their desire to capture the story of IBM and the family that built it speaks to their commitment to the firm. But the culture, at least in the halcyon years of the 50s and 60s, sounds terrible. Not only were the Watsons, father and son, both seemingly autocrats, but the training sounded awful. At the induction ceremony in Florida, “IBM’ers” used to sing hymns about IBM and the CEO. I am not, and could not, make this up. McElvenny and Wortmon share these lyrics:
We’re here to cheer each pioneer
And also proudly boast
Of that man of men, our friend and guiding hand.
The name of TJ Watson means a courage none can stem:
And we feel honored to be here to toast the IBM
However much you dislike DEI training, it’s not this bad. But it worked! Employees loved the company! If my employer ever requires me to sing company songs, I will quit on the spot. But these two were so inspired they each wrote a book about it.
#3. Though it takes constant reminding to believe, yes, you can be rich and miserable. TJ Watson Jr’s life story sounds like it should be a dream - the son of the richest CEO in the US, he married JFK’s first girlfriend (an actress), became a war hero, and led IBM as it launched the world into the computer era. But the details are all miserable. He and his father fought constantly, he was utterly insecure, his marriage was a failure, his brother quit speaking to him, and the company went south after he left.
#4. The “fall” of IBM has a lot to do with antitrust. The magnitude of the IBM Antitrust case is incredible. According to Cortada, it lasted over a decade, with IBM spending over $250m in legal fees (both Cortada and I wonder what the bill for the US taxpayer was). The DoJ would ultimately bring in 32,000 exhibits, 72,000 documents, and 52 witnesses, with the Solicitor General calling it “the Antitrust Division’s Vietnam.” The result was that IBM quit speaking about things like “market share” internally, creating confusion around goals and strategy. It was so consuming that the CEO, Frank Carey, spent over 80% of this time on the case. It’s hard to see how any company could successfully survive this.
#5. The pivot to services has not been enough. Despite IBM’s attempt to become a consulting firm, create a cloud business, and jettison its hardware lines, it’s still not what it was, and people are unhappy. I doubt this will surprise anyone today, and after the antitrust lawsuit, I don’t know how surprised anyone could have been then. The more surprising and impressive thing is that IBM is still a going concern and in a sufficiently strong position that a Microsoft-like comeback is not inconceivable.
There you have it! These are the things I found fascinating about the IBM story, though I’ve taken many notes on others. I recommend both books with the caveat that my curiosity about IBM has limits.