"In a functioning society power is exercised as authority, and authority is the rule of right over might. But only a legitimate power can have authority and can expect and command that social self-discipline which alone makes organized institutional life possible."
“When you give men authority it affects them differently. Some men think, ‘I have been given authority to tell these other men what to do.’ Consequently, they are not able to tell anybody what to do that will be of any value. When a man is given a promotion, his responsibility has been extended and the first thing for him to do is to worry a little  over it instead of taking a great deal of pride in his new power. His first duty is to sit down and to think seriously about his responsibility and how he can aid his coworkers”
The Future of Industrial Man
Peter F. Drucker
We Are All Assistants
Tom Watson Sr.
Reading and studying the past to understand the present and spur a discussion about an unclear and uncertain American corporate future. How are we going to attain corporate "social self-discipline" if we have no corporate "rule of right over might?:"
Peter E. Greulich
Author, Speaker and Publisher
 
 
Two attempts have been made so far to solve the problems of industrial citizenship: industrial paternalism and industrial unionism. Both have failed to solve the problem........

It [paternalism] rest on the basic fallacy that people will take propaganda for reality. Paternalism attempts to give the individual in industrial society status and function by telling him that he has status and function. The problem of status and function in industrial society arises because in the modern plant the worker does not have the dignity and responsibility of an adult but is kept in the dependence of a child. Paternalism tries to make him feel like an adult by treating him like a good child.
Peter F. Drucker, 1964
The Concept of the Corporation
How Well Does It Work?
"We all know that the welfare of the enterprises that we are directing is closely bound up with the welfare of our workers, but in attempting to counsel or advise those whom we employ, we must not adopt a paternal attitude. In these times, when independent thought and action should be the order of the day, employees resent an attitude of paternalism. It is a well-known fact, however, that an employee's efficiency suffers if his mind is ill at ease, and that worry over financial troubles is one of the most powerful sources for the destruction of mental peace."
Thomas. J. Watson Sr., February 1933
Men-Minutes-Money, 1934
“New York Savings Bank’s Luncheon”
Do too many corporations confuse caring about the welfare of their employee-owners and paternalism? Tom Watson Sr. ever the capitalist knew that he needed his employee-owners to function efficiently. He worked to ensure his employees were cared for in ways only a corporation could provide but ensured every employee was provided the dignity and responsibility of being an adult - not a child.
Peter E. Greulich insight
March 9, 2013
 
 
It will never be possible to obtain anything resembling unanimity on the concrete ways to realize the basic beliefs and promises of American society. But on these beliefs and promises themselves the American people agree apparently with hardly a dissenting voice. Fundamentally, American political philosophy stands on the Christian basis of the uniqueness of the individual. From this follows (a) the promise of justice or, as we usually phrase it, of equal opportunities. From it also follows (b) the promise of individual fulfillment, of the "good life," or, in a perhaps more precise formulation, the promise of status and function as an individual.
Peter F. Drucker, 1964
The Concept of the Corporation
The Corporation as Social Institution
Fundamental Promises
"Another thing that I want to mention tonight is that when men start in a business as large as ours, with as many different departments and different phases of work, it is not always possible for the supervisor to place them in exactly the spot they should occupy. If you feel that you are not a proper fit, talk to your supervisor.

We often get a round peg in a square hole or a square peg in a round hole and cannot make them fit. So if you feel that you are not properly fitted in, talk to your supervisor, ask him what he would think about moving you into some other department. If a man is not functioning 100% in one department it does not mean that he has to get out of The IBM. It means simply that he should look the ground over, talk to his supervisor and get placed where he will fit.
"
Our basic belief is respect for the individual, for his rights and dignity. It follows from this principle that IBM should:
  • Help each employee to develop his potential and make the best use of his abilities
  • Pay and promote on merit
  • Maintain two-way communications between manager and employee, with opportunity for a fair hearing and equitable settlement of disagreements.
Thomas J. Watson Jr.
April 1969
Many say that conditions today are different - and they are. Are they so different though that respect for the individual no longer applies in today's society? In a Watson's IBM, respect was pay for performance, respect was placing an employee where they performed best for the corporation, respect was maintaining two-way communication between employee-owner and manager. Respect was fundamentally understanding the uniqueness of the individual and their differentiated contributory roles. Is this thinking out of date in the 21st Century? Or is it just waiting to be rediscovered?
Peter E. Greulich insight
March 9, 2013
 
 
Above all, it [any large scale organization] must make it clear to each supervisor and manager that the training and development of subordinates is a part of his duties. It must be made to be to the self-interest of executives to look upon their subordinates and potential successors as human assets whose maximum utilization is as important to the institution as is the maximum utilization of natural resources. To have trained a potential successor must become one of the achievements which qualify a man for promotion, instead, as it far too often is today, a stumbling block.
Peter F. Drucker
The Concept of the Corporation
The Corporation as Human Effort - Leadership
"When a man comes into this business, no matter what his capacity, the job of being president is as accessible to him as is the next job above him. That man in this business that does not recognize outstanding ability on the part of a man under him - who fails to give that ability an opportunity to express itself in greater responsibility and better work, is of no further use to us.

Our executives know that. They are constantly looking for men. They know that it is human ability above all else that will help this company succeed. Our general manager of manufacturing started at an assembly bench. Our vice-president in charge of sales began with a sample case. The secretary of this company came here as a clerk. We do not have to go outside our own company to get top-notchers. We develop them. Developing and keeping men is one of the biggest jobs the heads of American business have."
Thomas. J. Watson Sr., 1926
Feature Article in "System, The Magazine of Business"
"I suppose some of you salesmen are wondering why there are so many executives here on the platform. I can assure you we did not ask these men to come up here so that you might see how handsome they are, or even just to hear them talk. That includes me.

The reason they are here is that we want to give the men at head­quarters an opportunity to look into the faces of the men who are most directly responsible for our company’s progress."
Thomas. J. Watson Sr., January 1932
The World's Greatest Salesman
Speaking as he and his executive staff looked out on the 1931 One Hundred Percent Club attendees
When was the last time a story circulated about a United States' Chief Executive Officer sending a message as clearly and precisely about their responsibility for human capital as Tom Watson Sr.? How many American executives today believe that "developing and keeping men and women" is one of their biggest jobs? How many delegate that job to H.R. and never verify that H.R. policies are working effectively at developing and keeping their best employees?
Peter E. Greulich insight
April 14, 2013
 
 
We cannot afford arrogance among knowledge workers. Knowledge is power which is why people who had it in the past often tried to make a secret of it. In knowledge work, power comes from transmitting information to make it productive, not from hiding it.

That means you have to be intolerant of intellectual arrogance. At whatever level, knowledge people must make themselves understood, and whatever field the manager comes from, he or she must be eager to understand others. This may be the main job of the manager of technical people. he or she must not only be an interpreter but also work out a balance between specialization and exposure. . . in the knowledge-based organization, the highbrow and the lowbrow have to play on the same team.
Peter F. Drucker
Management (Revised Edition)
The Manager of Tomorrow
"The future of International Business Machines Corporation, and of every person connected with the company, depends not upon the amount of time we spend in study; but upon what we learn and upon our ability to transfer our knowledge to the newcomers in the business so that they may keep step with the pace of IBM—a pace which is constantly increasing!

Every member of The IBM organization should be both a teacher and a student."

Thomas. J. Watson Sr., January 1933
The World's Greatest Salesman
An Editorial in Business Machines on
"Study – The Master Key to Future Growth"
June 2, 1930
Tom Watson Sr., decades before Peter F. Drucker would capture the concept of a new knowledge-worker based society, understood the importance of disseminating knowledge within his corporation's four walls. If the organizational structure of the 21st century is geographic dispersal not only across but within national boundaries with home offices, how will a corporation survive if the sense of organizational loyalty is replaced with self preservation? Are American Corporations still optimized as in Watson's IBM to retain the best knowledge workers? Do modern day corporate policies encourage selfless dissemination yet critical retention of knowledge within the organization?
Peter E. Greulich
April 4, 2013
 
 
But the [feedback] analysis may also show that a person fails to obtain results because he or she lacks manners. Bright people - especially bright young people - often do not understand that good manners are the "lubricating oil" of an organization.

It is a law of nature that two moving bodies in contact with each other therefore always create friction. And then manners are the lubricating oil that enable these two moving bodies to work together, whether they like each other or not - simple things like saying "please" and "thank you" and knowing a person's birthday or name, and remembering to ask after the person's family. If the analysis shows that brilliant work fails again and again as soon as it required cooperation from others, it probably indicates a lack of courtesy, that is, manners.
Peter F. Drucker, 1973
Management (Revised Edition)
Managing Oneself
"If you need a man, hire him, but hire the right kind of a man. Dr. Nicholas Murray Butler said there were only two things in connection with education that were of real importance, and without which you could not educate anybody or do anything with him. Those two things, he said, were character and good manners. And he said a great many of our educational institutions were falling down on both those points.

I have thought about that a lot. You men never had a successful experience in your life with a workman who did not have good manners. The fellow that is always rough and doesn’t show you the consideration and the courtesy to which, as foreman, you are entitled is not the kind of man you want in your department. You need the kind of men who are gentlemanly and courteous, and whose manners are backed up with good clean character. I want us to keep those two things in mind right through every branch and every department of our business. If we have anybody in any department—sales, factory or office—who we discover is a man of real character but does not display good manners, we must get rid of him and give the job to somebody who does possess those qualities. Then we will have a real organization.

Of course, we must always set the right kind of example all the way along the line as to character and good manners. Then you can teach the men anything, because they are with you, they will listen to you. They are not trying to show off or be smart. They get right down to business
."
Thomas. J. Watson Sr., January 1933
The World's Greatest Salesman
Speaking at Hundred Percent Club
to Factory Foremen on Men of Character and Courtesy
Tom Watson Sr. was a master of balance. After telling his factory foreman that they should only hire men of character and courtesy, he balanced that with what many would consider an obvious statement; but a statement that needed to be expressed, "Of course, we must always set the right kind of example all the way along the line." Tom Watson Sr. was right, employee-owners will not try and show off or be smart - they will get right down to business. And isn't that the goal of business?
Peter E. Greulich insight
March 23, 2013
 
 
"These were general principles of organization and procedure - principles how to do and not to do things, rather than what to do or not to do......That General Motors owes its strength precisely to that use of principles and concepts as guides for concrete, unplanned and unforeseen action of which the "planner" knows nothing, is thus of general importance. The most successful attempt to provide a basis for the political organization of the future, the American Constitution, used the same method. The Constitution is not a "plan" of government, laying down what ought to be done. Neither is it "pragmatic." It establishes a few, simple organs of government with enormous powers of which only the limits are given.

The purpose of such a concept is never to serve as a rigid rule. Rather it is to be used like a compass bearing taken across rugged mountains. The actual trail will follow the natural contours of the terrain; but the bearing will give the deviation from the true course at every step and will thus ultimately lead to the objective, however great the detour and however much the objective has been lost sight of on the way."
Peter F. Drucker, 1964
The Concept of the Corporation
How Well Does It Work?
"I believe the real difference between success and failure in a corporation can very often be traced to the question of how well the organization brings out the great energies and talents of its people. What does it do to help these people find common cause with each other? How does it keep them pointed in the right direction despite the many rivalries and difference which may exist among them?

[These problems] exist in all large organizations, in political and religious institutions. Consider any great organization - one that has lasted over the years - and I think you will find that it owes its resiliency, not to its form of organization or administrative skills, but to the power of what we call beliefs and the appeal of those beliefs have for its people.

This, then, is my thesis: I firmly believe that any organization, in order to survive and achieve success, must have a sound set of beliefs on which it premises all its policies and actions. Next, I believe that the most important single factor in corporate success is faithful adherence to those beliefs.

In other words, the basic philosophy, spirit, and drive of an organization have far more to do with its relative achievements than do technological or economic resources, organizational structure, innovation and timing"

Thomas. J. Watson Jr., 1963
A Business and its Beliefs
The Ideas That Helped Build IBM
The Watsons with their basic beliefs, like the founders of the American Constitution, focused on "how" a corporation should achieve success. They left the "what to do" in the hands of hundreds of thousands of decentralized and empowered individual decision makers. These decision makers were guided by the IBM Basic Beliefs - a compass that ever pointed to an IBM corporate true north. They (employee and executive alike) were held accountable through Performance Reviews, Opinion Surveys, Open Doors and Executive Interviews. Without a guiding compass, what will carry American Corporations through the next great turmoil if it isn't its own people unified around a set of basic beliefs?
Peter E. Greulich insight
March 17, 2013
 
 
The Corporation as Human Effort
Peter F. Drucker studying the General Motors organization in the 1940's under Alfred P. Sloan, Jr. wrote the following:

"It is the right as well as the duty of every managerial employee to criticize a central management decision which he considers mistaken or ill advise. In fact, the one definition I could obtain as to who is considered an executive in General Motors was: 'A man who would be expected to protest officially against a policy decision to which he objects.' Such criticism is not only not penalized; it is encouraged as a sign of initiative and of an active interest in the business. It is always taken seriously and given real consideration."
Peter F. Drucker, 1964
The Concept of the Corporation
Advice to Young Men Entering the Business
"Take orders gracefully. A man who cannot take orders gracefully will never be in a position to give orders. Do not be afraid to be critical of us, if you think we are not running this business properly. But do not criticize us to your fellow workmen. Go direct to headquarters. We are always anxious to receive constructive criticism, but we do not care for destructive criticism. That helps no one. Always make up your mind before you criticize that you are going to think out some plan that you believe is better, and then come and present it to us. You would be surprised at the number of changes we make in the handling of the affairs of IBM through suggestions we receive from men like yourselves. We want you to keep that in mind and be among the builders of this company. We want you to think of The IBM as it will be ten years from now when this factory will be twice as large as it is today and work with a view to placing yourself in a position to say at that time, 'Well, I have helped build half of this factory since I have been with this company.' "
Thomas. J. Watson Sr., October 1930
We Forgive Thoughful Mistakes,
Volume III of Tom Watson Sr. Essays on Leadership

Speech to Tabulating Machine Sales School Number 57
In this philosophy can be seen the beginnings of IBM's once very active and widely used: Speak up, Suggestion, Open Door and Executive Interview programs. Tom Watson Sr. was also known for not waiting for employees to come to him. He went to them. He practiced what would later be coined in the 70's business world as "management by wandering around" or MBWA. He would show up unannounced and sit down with employees to gather information on the health of the business.
Peter E. Greulich insight
March 9, 2013
 
 
The Corporation as Human Effort
It follows from this that the essence of the corporation is social, that is a human organization. This might appear like a redundant assertion. Actually for far too many people the essential in modern industrial production is not the social organization but raw materials or tools. . . . As a result, most of us - - including a good many people in industrial production itself - - fail to understand that modern production, and especially modern mass production, is not based on raw materials or gadgets but on principles of organization - - organization not of machines but of human beings.
Peter F. Drucker, 1964
The Concept of the Corporation
To  Make a Business Grow - Begin Growing Men!
"When we start thinking of men as automatons, clicking their respective ways through the processes of life with mechanical exactness, that day we lose our own identity and become automatons ourselves. When we cease to realize the interdependence of men we are on the brink of failure."
Thomas. J. Watson Sr., August 1926
The World's Greatest Salesman
"System, The Magazine of Business"
Tom Watson Sr. constantly talked about "growing men" in the same breath as "growing the business." Even his son Thomas J. Watson Jr. when publishing his lecture series at Columbia University, A Business and its Beliefs, started his lecture series with two chapters on; Bringing out the Best and Helping Men Grow. It is not hard to discern that they both considered growing men as the quintessential essence of growing a business.
Peter E. Greulich insight
March 23, 2013
 
 
There is a "Value Conflict" in American Business Today
Tom Watson Sr.'s Value System
"In any conflict between short-term results and long-term growth, one company decides in favor of long-term growth, another company decides such a conflict in favor of short-term results. Again this is not primarily a disagreement on economics. It is fundamentally a value conflict regarding the function of a business and the responsibilities of management."
From "Managing Oneself" in Peter Drucker's Management
"We want you to feel that it [IBM] is more than an ordinary business, that it is a worldwide institution that is going to go on forever, that you are going to make it your life work and that you are going to bring your sons into it in the future. That is the kind of a business you are engaged in, gentlemen."
Tom Watson Sr.
The World's Greatest Salesman
Speaking at an IBM Owl School, 1932