When Thomas J. Watson Sr. arrived at the Computing-Tabulating-Recording Company in New York City in 1914, he was confronted by a company that had been created three years earlier by merging three small firms that were geographically isolated from each other. One was in New York, another in Washington, D.C., and a third in Ohio. For years, they didn’t operate as a single organization. Watson understood that one of his most important tasks would be to knit the three organizations together—not just operationally but with a common set of beliefs and processes.
Today, we refer to this connective tissue as a corporate culture, which MIT Sloan School Professor Edgar Schein, the coiner of the term, defines as “a set of basic tacit assumptions about how the world is and ought to be that is shared by a set of people and determines their perceptions, thoughts, feelings and, to some degree, their overt behavior.” Watson is credited as the first business leader to so consciously and pervasively create a culture for his company. Authors Tom Peters and Robert H. Waterman Jr. identified the ability to create a strong values-based management philosophy grounded in respect for the individual as one of the keys to long-term success in their modern business classic, In Search of Excellence, which featured IBM prominently. “What makes it live at these companies is a plethora of structural devices, systems, styles, and values, all reinforcing one another so that the companies are truly unusual in their ability to achieve extraordinary results through ordinary people,” they wrote.
Watson didn’t waste any time in attempting to impose a strong culture on the badly splintered C-T-R. He quickly appropriated the company motto, “THINK,” that he had adopted as the sales manager at National Cash Register Co. In fact, the motto was even more apt at his new company. C-T-R’s counting and measuring devices helped people work faster and more precisely. Looking into the future, Watson realized there would be practically limitless potential for machines that help people think—and there would be tremendous opportunities for the companies that employed the smart people who could imagine, design, manufacture and sell them. Encouraging everybody to be a thinker, from the assembly line worker and engineer, to the sales person and the secretary, was what would bind C-T-R together.
The THINK motto had come to him in 1911 at an early morning meeting of NCR sales managers. On this day, the managers didn’t have any good ideas about how to improve the business. Frustrated, Watson strode to the front of the room and gave them a tongue lashing. “The trouble with every one of us is that we don’t think enough,” he boomed. “Knowledge is the result of thought, and thought is the keynote of success in this business or any business,” he told them. He decided on the spot that henceforth THINK would be the company’s slogan, and ordered a subordinate to post a placard with “THINK” printed on it in bold letters on the wall of the room the following morning.
After C-T-R became IBM in 1924, THINK became an ever present reminder of the ideas that held the company together. At the peak of the slogan’s popularity, THINK signs cluttered the desks and walls of countless IBM offices; the company published an employee magazine called Think; and many IBMers carried pocket-sized notebooks with “THINK” embossed on the cover.
THINK may have been the seed, but it was just one aspect of IBM’s culture. Over the years, the company developed a formal set of what it called Basic Beliefs, which were designed to guide employee behavior:
- Respect for the individual
- The best customer service in the world
“We believe an organization will stand out only if it is willing to take on seemingly impossible tasks,” Thomas J. Watson Jr. explained to a Columbia University audience in 1962. Those “who set out to do what others say cannot be done are the ones who make the discoveries, produce the inventions, and move the world ahead.” And, remaining true both to the principle of continual rethinking and the importance of basic beliefs, IBMers themselves revisited and reshaped their core values in 2003, in a global online exchange called Values Jam.
There are important elements of a company’s culture that aren’t written down but can be just as important as the values that are codified. These can include everything from the way people dress—IBM’s blue suits of yesteryear—to how they behave under pressure. At IBM, one of the key elements of its culture and an important factor in its longevity is its willingness not only to tolerate but to encourage radical thinking. IBM celebrates its so-called wild ducks. As Bernard Meyerson, an IBM Research Fellow who joined the company in 1980, puts it, “Most places have a history of shooting disruptive people like me. IBM isn’t perfect, but if you’re willing to have the battle, and you base your argument on data, you can win.”
IBM has learned over the years that culture isn’t just one tool of management; it is the essence of management. It means that employees make the right decisions not because they are told what to do, but because they know what to do. When that is the case—when you can nurture a corporate culture based on thinking—you can preserve and guide an organization through centuries of change.