Sales culture

On the occasion of the 1926 Hundred Percent Club Convention and Executive School, Thomas J. Watson Sr. lauded his top salesmen for delivering the company’s best year on record. He considered this sales program to be the “most satisfactory” in IBM’s history. And yet, too many in the ranks had missed their quota, he said. To fix this he set a company-wide objective for 1927 to “Help Sales” — although, in truth, he had been pushing this agenda all along.

From his first days as president of the Computer-Tabulating-Recording Company in 1914, Watson Sr. trained a critical eye on sales to salvage the struggling conglomerate. “Sell aggressively. Sell results. And sell honestly,” he told a revamped salesforce as he set out to transform the company by improving the importance and luster of sales.

As chief evangelist for the profession, Watson Sr. would venerate the work, preaching exceptionalism in a trade known previously for its hucksters and shady selling tactics. It was, after all, a career dear to his heart, the one that launched him on a successful path in business. Early on, Watson Sr. sold sewing machines and musical instruments in a village near his hometown of Campbell, New York, then he joined the National Cash Register Company as a salesman in Buffalo.

Reflecting this affection, a January 1920 ode to salesmanship in the publication Business Machines told readers to “cultivate true salesmanship as a science” and “glorify it as a sculptor … glorifies his labor.” Above all, it said, “be a leader of men, be a top-notcher, a quota man whose effort is the standard of achievement.”

This effort required a new breed of salesperson. Watson Sr. recruited top graduates from leading universities to sell C-T-R’s products, a sharp turn in hiring tactics that stressed the importance of education when selling sophisticated machines. As Thomas J. Watson Jr. would later say: “The smart company can never expect to be more highly regarded than the salesmen in the field.”

This regard covered everything from attitude to appearance. Watson Sr. set standards by which customers could identify IBM sales reps anywhere. While the blue pinstriped suit and white button-down shirt came to typify that style, the company simply demanded of its salespeople that business dress be of a high sartorial standard.   

Face time with customers was important, no matter how remote the site. Whether town-hopping in a Cessna across South African bush country or chartering a “weasel,” a tank-like conveyance with skis, to northern Norway, IBM salespeople regularly visited customers on their own turf. In the early days of the company, maintenance contracts provided a key excuse for frequent visits. Salespeople were encouraged to go the extra mile, or thousand miles, for their accounts.

Watson Sr. inculcated this service-first ethic across the company. He regularly spoke about “leaders as helpers,” reminding managers that “service” extended to staff, customers and each other. He pressed salespeople making quota to assist underperformers and reinforced the importance of dedication to personal development and individual effort.

In return, the company promised to unfailingly support its people with growth opportunities and rewards. In 1962, for example, Thomas J. Watson Jr. sent 187 high-performing salespeople and their partners on a company-paid trip to Europe. He was honoring a bonus his father had promised more than two decades prior for doubling company revenue. World War II had cancelled the trip, and his son and then-CEO Watson Jr. made good on the pledge 21 years later.

While sharing generously the “carrots” of sales achievements, like annual outings for members of its One Hundred Percent Club of salespeople who made quota, both father and son were also known to use the “stick” when necessary. During a 1936 keynote speech kicking off a worldwide sales contest at New York City’s Waldorf-Astoria Hotel, Watson Sr. pointedly observed how IBM’s growth rate lagged behind that of its US customers. If 663 companies could grow net income at a 62 percent rate, he chided, “Why shouldn’t we?” With its superior machines and large corps of well-trained staff, he told his salespeople, IBM should be doing better.

Watson Jr. also appreciated the value of a dress down. What distinguished IBM’s paternal culture, though, was what came next. “Sometimes an IBM sales manager has to use a baseball bat on one of his men,” he said, “but we insist that he pick the poor man up afterwards and dust him off.”

Knowledge, the Watsons believed, was the path to greater productivity. In their minds, salespeople “were made, not born.” Watson Sr. called education “the one Master Key we can depend on to open the door of future progress.”

During their respective tenures as leaders, both Watsons invested heavily in education. In Watson Sr.’s time, company-funded schools popped up to “help employees of this company to help themselves,” L. H. LaMotte, a sales manager and school organizer at Endicott, said.

In 1915, C-T-R began instructing salespeople how to apply products in the field. A year later, the Tabulating Machine Company division launched a one-month sales training program. C-T-R’s first sales school at Endicott opened in 1920 and put trainees through six weeks of intensive study on selling and servicing equipment. And in 1935, Watson Sr. launched IBM’s first co-educational training for systems service people, recruiting a group of 25 women for a three-month sales course at Endicott. These women would “have neither handicap nor an advantage over the young men,” Watson said, and should expect equal pay and advancement opportunities.

The product, Watson Jr. would later describe, is a professional salesperson who, “after [they] talk for a while, you think so, too.”

By the late 1950s, salespeople had emerged from the seamy corporate underbelly of an earlier time to the heights of executive management — thanks in no small part to the professional standards pushed by the Watsons. A Fortune magazine survey in 1957 found that of the top three highest-paid officers at 300 of the biggest companies in the US, 25% came up through the sales ranks. For the top executives 50 and under, 35% were from sales.

IBM CEOs T. Vincent Learson, Frank Cary, John Opel and Sam Palmisano all started at IBM in sales. Likewise, John Akers, IBM’s sixth chief executive, joined the company in San Francisco in 1960 as a sales trainee. A Yale graduate and a US Navy aircraft carrier pilot, he personified the type of character Watson Sr. sought in early C-T-R recruitments.

Although sales at IBM has evolved into more “task force” selling, as Watson Jr. called it, the company remains focused on building experts. It announced a new sales structure in 2021 to offer full-service solutions to its biggest clients and specialists for particular products and services. Unsurprisingly, training and education were a core part of the transition plan.