A Business and Its Beliefs

 A Business and Its Beliefs: The Ideas That Helped Build IBM, by Thomas J. Watson, Jr., was on the outside carts at Second Story Books before Christmas. The book, published in 1963, was part of the McKinsey Foundation Lecture Series, sponsored by the Graduate School of Business of Columbia University. It runs to 107 pages, in seven chapters. Watson was then chairman of the board, having succeeded his father as head of the company in the 1950s.

When the book came out, IBM was in the middle of its project to build the System 360. The book makes no reference to the effort, for it was not announced until 1964, and did not begin to deliver computers until 1965. It is said that IBM management bet the company on the project, which cost $5 billion in 1965 dollars. Something of the magnitude of that effort can be inferred from Frederick Brooks's The Mythical Man-Month, a reckoning of the lessons learned on the software side of the work.

A Business and Its Beliefs lists three primary beliefs:

1. respect for the individual
2. [a desire] to give the best customer service of any company in the world
3. an organization should pursue all tasks with the idea that they can be accomplished in a superior fashion

 The first reflects a paternalistic IBM that probably did not survive the 1990s, maybe not the 1980s. Watson wrote that IBM had never laid off employees. Now the tech press writes of IBM's urge to replace aging staff, with memos referring to them as "dinobabies". It also writes of salesmen not paid promised commissions.

The third was certainly true of IBM once in many areas, and may yet be in some. A lot of very smart people went through IBM, and came up with some remarkable ideas and technology. IBM management didn't invariably know what do with it--IBM sat on John Cocke's innovations in reduced instruction set computing (RISC), so that Berkeley and Stanford popularized the notion, and it was beaten to market in relational database management systems after it had demonstrated their feasibility with R1. It revolutionized the personal computer market, and fairly promptly lost it.

  The second section of the book, "The Broader Purpose", expresses thoughts less popular in the American business community now. The "Friedman Doctrine" that the social responsibility of a business is to its shareholders, was not offered as such until 1970, and had not occurred to Watson:

It is in this area of national well-being that the business community will be judged most critically in the years ahead. Business has demonstrated how successfully it can innovate and produce. What we must do now--it seems to me--is to assign a higher order of priority to the national interest in our business decisions.

 Watson was therefore in favor of federal aid to education and in favor of something to improve medical care nationwide.

The IBM of that day and somewhat later was notoriously stodgy. It was said that an IBM engineer could demonstrate that he was a genius by growing a beard and not being fired. A man I know who had joined IBM sales on leaving the Navy in the late 1960s said that a co-worker shocked the office by coming to work in suit, tie, and blue shirt--nobody had worn anything but a white shirt before that. I don't know that I'd have cared to work for that version of IBM, but bohemianism can be a pose of its own.