In IBM’s archives, there’s a priceless photograph of six sober-suited IBM salesmen happily bounding along the boardwalk in Atlantic City in 1925. They were celebrating their membership in the company’s exclusive Hundred Percent Club—a prize for sales people who met their annual quotas.
Their rewards had been bestowed by Thomas J. Watson Sr., the company’s longtime chief executive, who was a salesman at heart. He cut his teeth selling pianos off the back of a horse-drawn wagon to farmers in upstate New York, and then rose through the ranks of the sales force at National Cash Register Corp. until he was the company’s top sales executive. Watson took the lessons he had learned at NCR to the Computing-Tabulating-Recording Corporation when he joined it as general manager in 1914. He turned the company, which he renamed International Business Machines in 1924, into the ultimate selling machine.
In earlier years of the twentieth century, sales people were not considered to be professionals. They were not typically college educated, and, in fact, the job was held in poor repute by many people—associated with hard-sell tactics and fast-and-loose claims. But, as competition between companies increased, managers began to see well-educated, well-trained and knowledgeable sales people as a source of competitive advantage. “The Watsons were the ones who first stressed professionalism in sales. They set the standard and other companies started to follow them,” says Robert L. Shook, author of numerous books about the sales profession, including, in 1995, The Greatest Sales Stories Ever Told.
Indeed, for decades, IBM sales people stood out from the rest. Starting in the early days, Watson hired only the top-performing graduates from the top universities. He set up a sales school in the company’s headquarters town of Endicott, New York, in the 1920s—putting the trainees through six weeks of intensive training in selling and servicing IBM equipment. He insisted that IBM salesmen wear conservative suits and conduct business to the highest ethical standards. (They were all men in those early days. IBM began the Women’s Training School in 1935, and hired its first female sales person, Gertrude Brooks, in 1936.) Watson rewarded his top performers with bonuses and celebrations. At their peak, the annual Hundred Percent Club conventions drew hundreds of sales people to Endicott to live in tent cities for a week and pass the time listening to motivational speeches, playing golf on the company’s own links and watching movies.
“There is only one way to gain knowledge and that is through study. Right here a good many fail because that means reading books, listening, discussing, observing and thinking. You must not overlook any one of these things. Read everything the company publishes for you in the way of instruction; discuss the business with every one with whom you come in contact, listen when any one talks about the business—be a good listener, observe, study through observation.”
Frontispiece from IBM Manual of Sales Instruction1931
“More than anything, IBM is known for knowing how to sell. Ever since the 1930s, when Thomas J. Watson Sr.’s handpicked classes of mostly Ivy League grads began each day with the rallying song ‘Hail to the IBM,’ the company has been a vaunted sales training ground. Six of the company’s eight CEOs have come up through sales, including the current one, Sam Palmisano. He calls his 40,000-strong sales force ‘our face to the client.’”
“IBM’s all-star salesman,” FORTUNE magazineSeptember 26, 2008
“Watson created institutions. He wanted the Hundred Percent Club to be the pinnacle of achievement at IBM. A salesman had to meet 100 percent of his quota to get in for that year. Getting in meant promotions, public adulation, and a trip to Endicott for the annual Hundred Percent Club rally, billed inside IBM as the most important event of the year. The Hundred Percent Club drove IBM’s sales culture the way the World Series drives millions of baseball players to learn the game and try to be the best.”
The Maverick and His Machine: Thomas Watson, Sr. and the Making of IBM2004
By the mid-century, the culture of IBM had produced a sales force of highly trained and motivated professions who helped the company pull ahead of its competitors—seven large companies including Burroughs, Sperry and General Electric. When John F. Akers, later to become the company’s 7th chief executive, joined IBM in 1960 as a sales trainee in San Francisco, he personified the IBM salesman. He had graduated from Yale University, had been a US Navy aircraft carrier pilot, and created a strong impression with his square jaw and crisp suits. “We were very square,” he recounted in a 2010 interview. “We wore the blue suits, white shirts with button-down collars, striped ties, hats and wing-tipped shoes. There was no drinking—unless the customer wanted to. And then we were supposed to go home.”
Akers and his cohorts were given up to 18 months of sales training—much more than other companies required. By the time they graduated and became quota-carrying sales people, they were expert not only in IBM’s products and services, but in the businesses of the companies and industries to which they sold. It was called “solution selling.” They were also known for going the extra mile for customers. Shelby H. Carter Jr., an IBM salesman for 14 years who went on to run sales for Xerox, recalls taking the train from his home in Baltimore to New York City on Christmas Eve in 1962 because retailer Abraham & Straus had a problem installing computers. One of the company’s top executives was so impressed with Carter’s response that he pitched in himself. “We lugged computers around on Christmas Eve,” recalls Carter, who says he eventually left IBM for Xerox because the competition for promotions was so intense.
During IBM’s heyday as the leader of mainframe computing, Francis G. “Buck” Rodgers was the company’s iconic salesman. Rodgers, who headed up global sales and marketing from 1970 to 1984, coined the term “everybody sells” to send the message that all IBMers should conduct themselves in every situation as if the person they were dealing with was a potential customer. He also preached absolute dedication to customer satisfaction—to the point where it almost got him in trouble. Once, in 1971, when IBM President Thomas J. Watson Jr. summoned all of the company’s executives to a last-minute meeting, Rodgers was late because he had stuck to his plan to meet first with an important client. When he arrived at headquarters, he discovered that Watson had delayed the start of the meeting—waiting for him. “I thought I was going to be fired,” Rodgers recalls. Instead, after he told Watson what held him up, Watson told the gathering of executives that “Buck has the right set of priorities.”
In recent years, IBM’s sales force has faced new challenges as it develops business in emerging markets. Making the sale in these places sometimes requires dealing with unusually harsh working conditions. For instance, Takreem El-Tohamy, general manager of IBM Middle East and Africa, wore body armor and was protected by a security team when he visited Afghanistan on a sales trip in November of 2010. During his three-day stay, he rode in an airliner that lost an engine during the flight, and he experienced a tense stand-off at a roadway checkpoint.
At the same time that the sales force is expanding around the world, it’s also going through a fundamental transformation. The company’s Smarter Planet agenda requires sellers to engage in strategic discussions with high-ranking client executives—conversations aimed at helping them identify new opportunities and solve complex business or social problems. It’s no longer enough to be expert at explaining the company’s broad portfolio of products and services. Clients are intrigued by the Smarter Planet vision, says Virginia M. Rometty, senior vice president for sales, marketing and strategy, “But they also say we need to engage with them more proactively and provocatively.” To help prepare IBM sales people for that role, Rometty in 2009 launched an initiative, including a training component, to establish a “culture of eminence” within the sales force.
A key aspect of this initiative is the new IBM Industry Academy composed of sellers and consultants who are recognized for their deep and insightful knowledge of particular industries. They’ll meet regularly to take on strategic projects.
IBM’s top sales people aren’t bounding along the boardwalk anymore, but they’re still being inspired by the work they do. And, given the ever-increasing complexity of the problems that IBM addresses on behalf of its clients, the demands on its sales people for expertise and professionalism are higher than ever before.
Selected team members who contributed to this Icon of Progress:
- Thomas Watson Sr. IBM CEO
- Thomas Watson Jr. IBM CEO
- John F. Akers IBM salesman who later became CEO
- Shelby H. Carter Jr. IBM salesman
- Francis G. “Buck” Rodgers Head of IBM’s global sales and marketing from 1970 to 1984
- Takreem El-Tohamy General Manager of IBM Middle East and Africa
- Virginia M. Rometty Senior Vice President for Sales, Marketing and Strategy