By Thomas J. Watson Jr., Peter Petre

(FORTUNE Magazine) – THE INTIMATE TALE OF IBM'S FIRST FAMILY The two men who led the computer giant to greatness loved each other -- and fought each other -- with the passion only a father and son can muster. FROM FATHER, SON & CO.: MY LIFE AT IBM AND BEYOND, BY THOMAS J. WATSON JR. AND PETER PETRE, TO BE PUBLISHED IN JUNE BY BANTAM BOOKS, A DIVISION OF BANTAM DOUBLEDAY DELL PUBLISHING GROUP INC. COPYRIGHT (c) 1990 THOMAS J. WATSON JR. FOR NEARLY 60 years between them, Thomas J. Watson and his older son, Thomas Jr., ran IBM. Their hold on the company did not come from stock ownership; the Watsons never controlled more than a few percent of the shares. Rather, it came from talent and sheer willpower -- the father's determination to create a great enterprise and have his son follow in his footsteps, the son's searing % ambition to measure up to his father's expectations. In his forthcoming book, Father, Son & Co. (Bantam Books, $22.95), written with FORTUNE senior editor Peter Petre, Thomas Jr., now 76, explores the tremendously complex relationship he and his father shared. It was at once full of love and full of bitterness, frustration, rivalry, and fighting. The book details for the first time how much this relationship did to shape what is today the world's fifth-largest industrial corporation. The tale will grip anyone fascinated by the human side of business. Excerpts: When my father died in 1956 -- six weeks after making me head of IBM -- I was the most frightened man in America. For ten years he had groomed me to succeed him, and I had been the young man in a hurry, eager to take over, cocky and impatient. Now I had the job -- but what I didn't have was Dad there to back me up. I'd heard so many stories about sons of prominent men failing in business, and I could imagine their devastation at finding themselves unable to fill their fathers' shoes. I worried I'd end up the same way. I was so intimately entwined with my father. I had a compelling desire, maybe out of honor to the old gentleman and maybe out of sheer cussedness, to prove to the world that I could excel the same way he did. I never declared myself winner in that contest, because many of my decisions were based on policies and practices learned at his knee. But I think I was at least successful enough that people could say I was the worthy son of a worthy father. It could have turned out very differently. The kind of privileged upbringing I had -- private school, world travel, status, wealth -- often leads to disaster for a son. I knew I was supposed to follow in my father's footsteps, but I did not see how that was possible. I was in awe of the man, yet we both had such hot tempers that it was hard for me to be in the same room with him, much less try to learn from him how to run a company. I didn't have much motivation as a youth. At Brown University, I spent so much time flying airplanes and fooling around that I barely graduated. If it hadn't been for World War II, I might never have become my own man. After 1939 my favorite recreation, flying, suddenly became serious business. I joined the Air Force as a pilot and learned to be responsible for an airplane full of men. The military took me far outside my father's influence for the first time in my life. By 1943 I had made it to lieutenant colonel. Though I never got $ promoted beyond that, I came back from the war confident, for the first time, that I might be capable of running IBM. But I'd been so unimpressive before the war that it was hard for my father to believe it. It took him years to convince himself that I'd changed, and I don't think he was ever completely sure. You can see that in the photograph of us that appeared in the New York Times when he turned IBM over to me. On my face is a look of great self- assurance, and I'm obviously enjoying the occasion tremendously; but on Dad's face there is a faint, uncertain smile. During the ten years after World War II, Father taught me his business secrets as we worked together. In public he would praise me lavishly, and I'd hear from other people the nice things he was saying about my shrewdness and brains and talent as a manager. But in private Father and I had terrible fights that led us again and again to the brink of estrangement. WE FOUGHT about every major issue of the business -- how to finance IBM's growth, whether to settle or fight a federal antitrust suit, what role in IBM other members of our family ought to play. From around 1950 my goal -- one of the things on which we never saw eye to eye -- was to push into computers as fast as possible. That meant hiring engineers by the thousands and spending dollars by the tens of millions for new factories and labs. The risk made Dad balk, even though he sensed the enormous potential of electronics as early as I did. When I finally took over I was excited about change. Computing was a brand- new industry, and I always felt that if IBM didn't grab the opportunity, somebody else would. So we taught ourselves to ride a runaway horse, expanding on a scale that no company has ever matched. We grew so fast that some years we had to cope with the problem of training 20,000 or more new employees. I kept myself where employees could see me, out in front, setting a fast pace. I had learned from my father that by seizing opportunities for dramatic action -- personally answering an employee's complaint, slashing the price of a new computer that failed to perform as promised -- I could set an example of how IBM should do business. Father and I played out our rivalry and our love for each other in the great American business that he created. Along the way I learned a great deal about power: being subject to it, striving for it, inheriting it, wielding it, and letting it go. I learned lessons for fathers who have dreams for their children and for children burdened with parental expectations. Lots of sons ask me if they should follow their fathers into business. My answer is: If you can stand it, do it. I NEVER remember, when I was growing up, Father coming right out and saying, ''I'd really like to have you follow me in this business.'' But I got it into my head that the old man wanted me to come into IBM, take it over, and run the whole deal. The very idea made me miserable. One day after school, when I was about 13, I sat on a curb thinking about my father. What precipitated it I don't know, but by the time I got home I was in tears. My mother asked what was wrong, and I said, ''I can't do it, I can't go to work at IBM.''

She said, ''But nobody asked you to.'' ''Yeah, but I know Dad wants me to. And I just can't do it.'' She said I shouldn't worry and put her arms around me. When Dad came home he gently said that his own father had wanted him to become a lawyer and that I should do exactly what I wanted. From then on he was always offering me alternatives. But Dad's real hopes for me are obvious in a 1927 photograph of us. He and I are standing together, shoulder to shoulder, almost equal in height. We are dressed exactly alike, with heavy, somber suits, overcoats, and derbies. We were on our way to a sales convention in Atlantic City; I was 13, a little young for business clothes. My first memory of IBM is from when I was 5 and Dad took me through the Dayton factory, where we made scales. I remember the acrid metallic smell of the assembly line and the smoke and noise of metal casting. From then on, Dad often brought me to IBM meetings, which were quite small in those days because the whole company was small. Sometimes the chauffeur would pick me up in Short Hills, New Jersey, where the family lived, and take me to Dad's office near Wall Street. All sons at some point have the idea that their father is the most important man in the world. But that impression is hard to outgrow when your old man's photograph is in every office and everybody around is bowing and scraping and trying to ingratiate themselves with him. Everything he did left me feeling inconsequential by comparison. The worst was when he was doing something he thought would make me happy. Once, knowing my interest in flying, he decided to introduce me to Charles Lindbergh, whom he didn't even know, at a banquet. Dad led me right up to the dais and introduced himself as head of IBM, and ; then me. He had such astonishing brass. I think I stammered, ''Congratulations.'' While Dad was willing to delegate much of my upbringing to others, he was the one who taught me how to look and act like a gentleman. To him these were among the most important skills in life, and he had worked hard to master them. His favorite method was to take me on trips -- to upstate New York, for example, where his family had lived, to see a relative or visit a grave. I NOTICED he always tipped the porter on these trips. On a trip to Chicago he tipped the man $10, a hell of a lot of money in those days. The porters would always say, ''Mr. Watson, sir, nice to see you,'' and it wasn't until I noticed those tips that I figured it out. I said, ''Dad, that's an awful lot of money to give a Pullman car fellow.'' ''I do that for two reasons, Tom,'' he said. ''First, that fellow has been up all night in his little cubicle, and I feel sorry for him. ''The second reason is that there is a whole class of people in the world who are in a position to poor-mouth you unless you are sensitive to them. They are the headwaiters, Pullman car conductors, porters, and chauffeurs. They see you in an intimate fashion and can really knock off your reputation.'' These trips always seemed as if they might be the start of a warm and intimate friendship between Dad and me. But when we got home, Dad would always become aloof again. I could never understand why he retreated. Maybe he really was too old to remember what it was like to be a boy, or maybe he was just too busy. Most of the time my father praised me, telling me what a great fellow I was going to be. But as I look back, I think he must have been awfully worried. Around the time I was 13, I began to suffer recurring depressions so deep that no one knew where they were going to lead. The first one started with an attack of asthma. Just as I was beginning to feel a little better, all my willpower seemed to evaporate. I didn't want to get out of bed. I had to be urged to eat; I had to be urged to take a bath. Such behavior today would probably be seen as a symptom of clinical depression, a serious mood disorder that causes a lot of suicides. But the best doctor we had said he was sure the trouble was connected to my being an adolescent, and he didn't know what to prescribe. After about 30 days I recovered. But six months later, the same thing happened. For the next six years, until I was 19 and started college, twice a year I'd be severely depressed. I got horribly depressed at a camp in Nova Scotia where my younger brother, Dick, and I both went one summer. ((Tom's brother, Arthur, was nicknamed Dick.)) I was barely functioning, getting up for camp activities but going back to my bunk as often as possible. Dick was only about 9, but I felt so lonely and desperate that I finally took him aside and tried to tell him what I was going through. I said, ''Stick around, help me, and if I die be sure to tell Mother and Dad that it's not their fault.''

After graduation from Brown, Tom went to IBM's sales school and then was assigned to a lucrative territory that included part of Wall Street. Accounting machines were IBM's prime product in those days. Tom always beat his sales quota, largely because people in the company who were eager to curry favor with his father threw business his way. His first sales visit was a cold call to the Maltine Co., makers of a tonic he took as a child.

I went up the elevator to the Maltine Co. Inside the front door of the office was a low oak fence with a gate, and a receptionist sat on the other side. I said, ''I'm Thomas Watson. I'm a sales representative from the International Business Machines Corp., and I wonder if I could see your chief financial officer to talk about punch-card accounting.'' ''I'm sure you can't,'' she said. ''We're very busy here today.'' ''Would you mind just presenting my card to that individual? If he can't see me today, I'd be glad to come back some other time.'' She took the card, and when she came back she said, ''Come right in, young man.'' I was thrilled. I walked right into this executive's office, and he got up from his desk and shook hands. He said, ''It's nice of you to call.'' ''Well, sir, I like Maltine tonic,'' I said. ''I used to take it as a kid and my mother set great store by it. I'm a new salesman and I was looking at the register and thought I should start with a familiar name. And that's why I'm here.'' ''Are you the son of Thomas Watson, the head of your company?'' he asked. I said I was. ''Let me tell you a little story,'' he said. ''I had a friend with his own business, and he brought his son into the business with him. This son liked to live pretty high on the hog, and he didn't really want to work. Finally he became a drunk and the father had to fire him.'' I heard him out and said, ''Thank you for telling me that. I will give it some thought. But now I'd like to tell you about the punch-card method of accounting.'' He said, ''Aw, hell, I'm not interested in that. I just heard you were T. J. Watson's son, and I thought you ought to know that a lot of people in your shoes fail. So nice to meet you, Mr. Watson.'' And he showed me the door. I was tempted to abandon my IBM career on the spot.

After an unhappy few years as a salesman, Tom entered the Air Force in World War II, gaining confidence as Major General Follett Bradley's aide-de-camp and personal pilot. Near the end of the war Bradley asked him what he planned to do. Tom said he would become a pilot for United Airlines. ''Really?'' said Bradley, ''I always thought you'd go back and run the IBM company.'' That was the first time it occurred to Tom that he might be capable of succeeding his father. He rejoined the company at its new Manhattan headquarters on Madison Avenue and began working his way up.

Generally I stayed in my own office on the 16th floor, and if my father wanted me, he'd call. His office was one floor up; there was a buzzer near my desk and a stairway outside my door. Dad was totally unpredictable. When that buzzer sounded, I never knew whether he was going to bring me up there and say, ''Son, I want you to meet Mr. Alfred P. Sloan,'' or ''Tom, I'm really dissatisfied with the way things are going west of the Mississippi.'' HIS METHOD was to give me more and more latitude in making my own decisions, and at the same time to make me fight on anything that required his approval. I'd have to go up to his office and do a sales pitch, and more often than not, we'd end up in an argument. I knew that he was trying to test me, temper me, and expose me to the thinking processes that had made him so successful. That didn't make his methods any easier to take: He would second-guess virtually anything I did. Dad wanted to make me head of IBM, but he didn't like sharing the limelight. So he was contradictory in his attitude toward me. When I wasn't around, he'd tell people that I was a worldbeater and that without question I was going to run the company someday. But then Dad would see me accomplish something -- he'd be in the audience when I gave a speech, or he'd read in the paper that I'd joined a charity board -- and he wouldn't say a word about it. When you got right down to it, Dad wasn't always so comfortable with the idea that Tom Watson Jr. was making a name for himself. During all my years as an ! aimless boy making poor grades in school, he'd given me nothing but love and support. As a young salesman I'd gotten so much help it was embarrassing. But when it came to power, real power of the kind he held over the lives of tens of thousands of people, my father made me fight him for every scrap. That's why I got so upset in 1948 when it looked to me as if Dad was about to hand over half of IBM to my brother. I was now a vice president, but Dick had stayed in the Army and then gone back to Yale. I definitely thought of him as my junior in the company. But Dad was an old man in a hurry. He had dreams of his two boys running IBM together, and with his 75th birthday looming, he knew there might not be time to put Dick through the same tough apprenticeship I'd had. He needed to set Dick up in a way that would allow the two of us to work together and not fight too much, because someday there would be no one around to arbitrate. For years, before I had any successes of my own, the idea of Dick getting ahead really bothered me. Even though he was five years younger, I thought he was in many ways my superior. His grades were a hell of a lot better than mine in college. He was a better athlete. He had a natural command of languages and an easier way of relating to other people -- he was much more gracious, a relaxed guy, very charming. Seeing Dick do so well had made me feel like the black sheep. I thought people admired him because he lived up to what Dad wanted, and I didn't. But I began to resent Dick much less after my successes during the war. He was my brother, and I wanted him to succeed too. My gripe was with Dad -- it burned me up that he seemed to see us as total equals. Dad's idea was to give me the U.S.A. and Dick everything else. He made a place for Dick by taking our offices and factories on six continents and forming a subsidiary company. It was called IBM World Trade, and it was the great labor of my father's old age. Looking back on it today, I'd say it was one of the most astonishing accomplishments in Dad's long career. ((IBM's foreign subsidiaries accounted for 59% of its total revenues last year.)) But when Dad first thought it up, I fought him harder on it than I'd ever fought before. I bucked so hard that I damn near got disowned. Dad came back from a tour of the Continent with Dick and sat down with me in October 1948 to tell me how he was going to divide the world. World Trade -- Dick's company -- would build and sell machines everywhere except the United States; IBM Domestic -- my side -- would be confined to the continental U.S., but as the parent company it would also handle aspects of the business like financing and R&D for all of IBM. For the time being Dad was going to add the chairmanship of World Trade to his usual duties, with a senior man named Harrison Chauncey as No. 2 and Dick as a vice president -- the same rank I had! I told Dad that splitting off World Trade was the worst idea I'd ever heard. I said darkly, ''If you do this, you'll live to regret it.'' He looked at me with total innocence and said, ''Why do you object to this so much?'' There were a lot of plausible business arguments I could have used. But the question caught me so completely off guard that the only thing that came to mind was personal: ''There's no place for me to travel! I like to travel!'' That made my father smile. ''Well,'' he said, ''I'll tell you what. I'll give you Alaska, Hawaii, and Puerto Rico, and you can travel there.'' I was so embarrassed that I agreed and left his office feeling totally stymied. Later that week he called me in, this time with Dick, to discuss the plan again. I started to present my business objections one at a time. Setting up World Trade would only multiply bureaucracy and expenses, I said, and I predicted that the minute World Trade was separate, it would start development of its own products, thereby wrecking IBM's manufacturing efficiency. Dick took the diplomatic course of sitting by and not saying a word, but I sensed a rising tide of impatience in Dad. The objection that finally caused him to flash was my pressing him on who should get Canada. Our business there produced a big cash flow, and I hated to lose it. There was no reason for giving Canada to World Trade except that they needed the cash more than we did. It was a real weak spot in Dad's plan. I could see him bristle, and I really bored in. I said, ''Anybody can see that Canada belongs with the domestic company! If World Trade can't stand on its own without Canada, then you shouldn't split it off at all.'' Dad rose up and thundered, ''What are you trying to do, prevent your brother from having an opportunity?'' Those words killed me. They set me up against my brother, who was right there. Dad would say that kind of thing without thinking, because he always aimed to win. He used the Marquess of Queensberry rules if he had time to think about them, but when he was in a corner, it didn't matter what the rules were; he wanted to accomplish his purpose. There was really nothing more I could say. Dick and I rode down in the elevator with Dad and walked him outside to where he had a limousine waiting. He got in and rolled down the window and said, ''Now remember, boys, stay together.'' I was devastated. Dick and I went back upstairs, and I tried to paper over the rift between us by saying I hadn't meant anything personal. Having won his point, Dick was generous enough not to rub it in. ((Canada was included among World Trade's new territories.)) I WISH THAT my relationship with Dad had been such that I could have gone into his office, put my feet up, and shared thoughts with him about the future of IBM. By about 1950 I had learned the business. I understood what we were doing, had the confidence of Al Williams ((then controller and Watson's best friend)) and the other young men, and knew where I wanted IBM to go. But Dad wasn't finished with me yet. I was still only executive vice president, and he made it pretty clear that if I wanted more responsibility I was going to have to keep fighting him for it every step of the way. Once when I complained of his rough treatment, Dad growled, ''I don't have a lot of time to teach you, and I'm doing it the only way I know how.'' He was determined not to stop until he had tested me, tempered me, and forged me in his image. Dad and I would usually meet toward the end of the day, after I had been working tremendously hard. He'd only really get going around five o'clock at night, which was the time I'd want to catch my train to Greenwich, Connecticut ((where Tom lived with his wife, Olive, and a growing young family)). But the buzzer would buzz and there I'd be, fagged, and Dad would say, ''I'm going to send Farwell to Kalamazoo,'' which would be exactly the opposite of what we'd agreed on the day before. I'd say, ''Dad, you know, we really talked that through, and we decided it wasn't a very good thing to send Farwell to Kalamazoo.'' ''Well, I've thought about it further, and I've changed my mind.'' ''But I already told Farwell that -- '' ''You shouldn't have done that!'' he'd say, and we'd be off to the races. Our worst fights were not at the office, where outsiders might hear, but at my parents' townhouse on East 75th Street. If I had a late dinner in the city, or early meetings scheduled for the next day, I'd sometimes stay overnight with them rather then commute home to Greenwich. I'd sleep in the same bedroom that I had before the war. Looking back now, I'm not sure why I kept doing that. To my father, that opulent house represented everything he had ever aspired to in life; for me it just brought back memories of the unhappy years I lived there as an IBM salesman. Often my parents would still be out at some social event, but I had a key and I'd let myself in. I'd go straight to bed, and by the time Mother and Dad came home from their dinner party, I'd be asleep. Dad would wake me up under the guise of saying good night. He'd sit down on the chair by the bed, ask how I was, and after a few pleasantries he'd say, ''By the way, son, I just want to cover the matter of the Western sales region once more.'' IT NEVER MADE any difference that this might be something I'd worked on over a long period and just gotten resolved. ''I'm not at all satisfied with the way it's being handled,'' he'd say, and there would go the whole wall that I'd laboriously put up brick by brick, right down on my face. I loved the old boy, and he knew it, but I didn't have the energy or time to rebuild walls he mashed down. I'd come out of deep sleep and be in the middle of a battle in no time. He'd get livid. His jowls would shake. All the old family tensions would come boiling out, and I'd let him have it with everything I had. My mother would hear our enraged voices -- ''Now let me tell you something!'' ''Don't talk like that to me!'' It would be 1:30 in the morning, and finally she'd get up from bed. I can remember her standing in the doorway in her nightdress, with her hair unbrushed because she'd been asleep. She never took sides. She'd say, ''Can't you boys just go to sleep?'' It would frequently end in tears. Then Dad and I would hug and go to bed frustrated. We'd swear we'd never do it again, and within two or three weeks there would be another moment of difference that would escalate into another white-hot argument. It amazes me that two people could torture each other to the degree Dad and I did and not call it quits.

With the Korean war came a great demand for computing power in defense-related specialties -- guided missiles, cryptanalysis, weather forecasting, and so on. Tom spurred IBM into the field with a machine called the Defense Calculator.

Many people had the impression that my father and I never agreed on the subject of electronics. But I like to think that if I hadn't been around to push, Dad would have eventually put IBM into electronics anyway, because he loved calculating speed. I think Dad decided the electronics opportunity should be mine, and the Defense Calculator was the first big risk he let me take as an executive. The idea of putting out an electronic computer captured my imagination more than I thought business ever could. The Defense Calculator project reminded me of what the Wright brothers had done. The problems we faced were just as complicated, though we had hundreds more men and much more money to work with. We were moving away from the punch card, a relatively slow medium that we understood very well, to something a hundred times faster that we didn't understand. We were trying to develop logic circuits, memory circuits, tape-handling devices, recording heads, card- to-tape data-transfer techniques, and, in conjunction with other manufacturers, vacuum tubes and tapes themselves. We were essentially learning a whole new trade. I kept waiting for Dad to second-guess me on the machine, but he never did. He must have had his doubts. He had taken the whole board of directors to see the prototype. One of the engineers presenting the machine got carried away and said that the future belonged to electronic computing. I was later told that Dad looked visibly upset at the emphasis being given to computers. But he never mentioned it to me. A year earlier he'd have said, ''Hasn't anyone told that young man that this company's future is still in IBM cards?'' I think he was making a conscious effort to let me and my machine have our day.

In 1952 his father promoted Tom to president. He remembers the next six months as ''sheer utter hell.'' Growing fast, IBM had passed $250 million a year in sales, and Tom was working frantically, calling on customers, spurring the company into electronics, serving in a range of public-service jobs.

I don't think my father realized how far he was pushing me. There were times when I wondered if I was going to have a nervous breakdown. That summer one of the managers in our typewriter division died in California. He was a fairly senior guy, married to a woman who had a vindictive personality. For some reason she had the idea that he had been unfairly treated by IBM, and when he died she told somebody she was going to sue the company because his heart had failed from lifting heavy typewriters. When I heard that, I thought it would be important to show some respect by being at his funeral. In those days that meant a nine-hour flight on a propeller-driven airliner called a Constellation. Just as I was leaving for the airport, Dad called me in and we had a terrible argument. Finally I said, ''I can't talk to you anymore. I have an airplane to catch.'' And I walked out. DAD WENT DOWN and got in his limousine and somehow beat me to the airport. Wiz Miller, the head of the typewriter division, was traveling with me, and when we got to La Guardia field and started walking out to the airplane on the tarmac, I saw my father. He was a very old man then, 78, and I remember him painfully making his way out from the shadows under the terminal building where his car was parked. I thought he was playing his age for all it was worth. He slowly came up to me across that tarmac, and with a lot of people standing around watching this curious scene, he reached out his gnarled hand and took my arm. I completely lost my temper. ''Goddamn you, old man! Can't you ever leave me alone?'' I said. I didn't strike him, but I ripped my arm away with great vigor, turned my back, and went up into the plane. That flight was the longest nine hours I ever spent in my life. I was beside myself, terrified that he'd be dead before I could talk to him again, and that I was going to have to live the rest of my life with the knowledge that I'd cursed my father. When we landed, I couldn't wait to get to a phone to tell him how sorry I was. That fight passed, like all our other fights, but it shook me up badly. I think it was the first time I ever really understood that my father might die. On some level I started to realize I could no longer afford to act like an adolescent.

Tom took Olive, their son, and three daughters on a quiet vacation where he played with the kids and thought about his father. Then he sailed his 54-foot yawl, Palawan, down the East Coast to Chesapeake Bay with some IBM cronies, sorting things out in his mind. A few days later he took out a yellow pad and wrote a letter.

Dear Dad, I've been thinking about this letter ever since I started for the Chesapeake. On that sail down with the IBM boys I began to think of our 38 years together. My main theme seemed to be to realize again and again how very wonderful, fair, and understanding you have always been to me. I have always realized this, but it becomes more clear when I have a son of my own to work with. I only hope that he may think of me when he's grown the way I think of you. Of course, I hope he won't argue and defy me as often as I have you because I know how painful that can be to a father. I've thought of your constant problem with me and my marks and your ability never to lose your temper about my schoolwork. I'm disappointed that I haven't been a better son in countless ways. You and Mother have always set me such a sterling example but I'm pitching and I always wanted to make you both proud. Every detail of our moments together flood in on me and have for the past three weeks like a pleasant cloud. We've had our battles and I soberly believe that in 90 cases out of 100 you were right and in the other ten a better son would have held his tongue. I've written you a dozen times, Dad, and said that I would do better, but somehow I've felt different ever since I went south. I want so to have you satisfied. What I'm trying to say is that I love and respect you deeply and want to have a chance to try again to show you. The company is your shadow and health and I hope that I can help keep it that way. I want your direction and advice in the business as I have never wanted it before and would like to spend most of my time with you while you are in, if we can work it out. This letter probably isn't conveying what I feel in my heart, but I wanted to try anyway. What I mean essentially is that no one could have done a better or more sympathetic job of being parents than you and Mother, and now I'm going to try harder than ever to make you proud. Love, Tom

I am very glad I wrote that letter, because I think it was the happiest moment I ever gave my father. It didn't end our fighting, but some of the bitterness went out of it on both sides. IBM'S GROWTH was hard even for me to comprehend. By 1955 we were about to break the half-billion-dollar mark in sales. The bulk of our business came from punch-card machines and computers, but even our sidelines were becoming bigger than all of IBM had been before the war. Altogether IBM was expanding at close to 20% a year -- and the billion-dollar mark was only a few years away. My brother Dick's side of the business was also becoming a great success. Because of Europe's economic revival and Dad's genius for coping with trade barriers, World Trade was growing just as fast as IBM Domestic; it passed $100 , million in sales in 1954. Dad ran it, and Dick worked his way up to where Dad made him president that summer. Dick was thriving in his job: He knew French, learned Italian, German, and Spanish, traveled incessantly, and managed that complicated business extraordinarily well. When he became president, World Trade was already operating in 79 countries, with full-blown national subsidiaries in 36 and branch offices and sales agencies in the rest. There was no other company in the world like it. In May 1956, Dad formally passed the job of chief executive on to me. He made the gesture spontaneously and with a great sense of dignity, which meant a lot to me because it was the first promotion I ever got from him without a fight. Within a week, Dad made a similar move with Dick, promoting him to chief executive of World Trade. I somehow had it in my head that Dad would stay around indefinitely, that he'd be by my side as a kind of consultant, just as he had become during the past year. But I think that by the time he turned the company over to me, he must have felt the hand of death on his shoulder. His health had begun to fail. He couldn't eat right because of his stomach ulcers. Dad's doctor was named Arthur Antenucci. He was a great diagnostician whose patients included the Duke of Windsor. After he looked at X-rays of Dad's stomach, he told me, ''Your father's stomach looks like the battlefield of the Marne.'' The tension of Dad's career had pretty much pulled him apart inside. Antenucci said that the buildup of scar tissue was so bad that the exit to Dad's stomach was gradually closing up. That was why he couldn't eat. A simple operation would have remedied it, but Dad chose not to have it done. He hated the idea of going under the knife. Without the surgery, his digestion began to fail, and he slowly but surely starved. THE OLD MAN had bursts of amazing vigor right up to the end. I will never forget the last time I saw him before an IBM audience. It was at a sales meeting in Washington, D.C., that March. There were perhaps 500 people assembled in a large hotel auditorium. Father got there late. The man running the meeting spotted him in the back of the room and said, ''I see that we have the honor of Mr. Watson's presence. Mr. Watson, won't you come up and take the floor?'' Dad was a wispy old man of 82, and he started carefully down the inclined aisle toward the stage. The men jumped to their feet and were clapping and shouting. The more they clapped and the farther he got down the aisle, the more erect he became. He stood up straighter and straighter and walked faster and faster until he finally got to the steps leading up to the stage. He went up them with such a surge of energy that he seemed to take them two at a time. The thrill of the salesmen's accolades was so great that Dad shed about 30 years on the way down that aisle. He grabbed the podium and made a very stirring speech, punching his fist into his hand and telling the men how they must take advantage of the great opportunities before us, and how IBM was going on forever.

In June 1956, Tom was preparing to sail in the Newport-to-Bermuda yacht race when his mother telephoned and told him he shouldn't go. His father was dying. The old man was admitted to Roosevelt Hospital, where his wife and four children -- Tom, Dick, and their two sisters -- gathered around him. A COUPLE of days went by. From time to time each of us would go to the church up the street and say a prayer, but not with any idea that Dad would live. It was a joyous and very sad time. This old gentleman had, in a variety of ways, commanded tremendous love and respect from all five of us. I can't characterize anybody's grief but my own, but I felt as if a very big piece of my life was being pulled away. He was the foundation on which I had been standing for 42 years. I had an awful hollow feeling about the future, how it would be without this man I had fought with so. Underneath it all, nobody ever had a greater influence on anyone else than T. J. Watson had on me. I'll never forget the moment of his death. All our lives we build up a tremendous desire to live. Jumping away from cars, running out of burning buildings. That instinct has been passed along in the human race for millions of years. I had never seen this will to live demonstrated the way I did now. Here he lay, head somewhat up, the room brightly lit, eyes closed, no oxygen mask, Mother and all of us present. He'd take a deep breath. Then there'd be nothing. Then he'd take another deep breath. Each breath during these last few minutes seemed to come harder than the last. The period between breaths became longer. Finally he took a long breath, sort of a shuddering breath, and it went out. As though to say, That's it, all the cares of the world have departed. And he never breathed again.

For the next five years Tom let no one share the spotlight with him because, he says, he wanted to establish ''that Tom Watson Jr. meant IBM.'' In 1961, however, he moved up to chairman while keeping the CEO title, and made Al Williams president. Tom would have gladly run the company with Williams until they both retired, but Williams was four years older than Tom and had made it clear that he wanted to leave at 55. So in a few years, Tom knew, he would have to name another president.

The most obvious candidate was my brother. Although Dad had never said so explicitly, I had always understood it was his wish that Dick run IBM after me. Dick was in total command of IBM World Trade and had built it into a phenomenal success. By 1960 it had become a $350-million-a-year business -- bigger than IBM Domestic when I took over as president -- and he was making it grow at double the domestic rate. Thanks to his hard work and Dad's foresight we were one of the few American companies in a position to cash in on the European economic miracle. Al used to chuckle about the impact this would eventually have on our U.S. competitors: ''They're fighting us so hard here that they're not even thinking about overseas. Wait until they find out how thoroughly World Trade has gotten itself entrenched.'' Now that we'd reached a point where it was natural to set up the IBM succession, Al pushed me to make the first move. ''We've got to get Dick over from World Trade,'' he said. Our plan was to groom my brother just as Dad had groomed me, and we figured he would need a couple of years in a big job on the domestic side to establish his authority. Then he'd be ready to take Al's place, and eventually mine. I talked to my brother about it in 1963. ''You're doing great at World Trade,'' I said. ''Dad always predicted it would be bigger than the main company, and maybe he had a point. But as far as I'm concerned, you're also the No. 1 candidate for this top job. So tell me what you'd prefer. Do you want to stay with World Trade and be the great internationalist? Or do you want to get in the running to be chief executive?'' I THOUGHT I was being scrupulously fair, but in hindsight it was the worst business and family mistake I ever made. I should never have forced my brother into a horse race with other executives for the top job. But Dick asked what I had in mind for him. I told him I'd bring him in at a level of senior vice president, and that meanwhile he would keep the title of chairman of IBM World Trade, although somebody else would actually run that business. He said, ''I'd like to think about it overnight.'' When you offer a career opportunity to a ) man who has ambition, he'll always take the job. Dick came back the next day and said, ''If there's a chance of my running this company, I want to try.''

At the time, IBM was developing the System/360, which was to completely revamp its computer line. The idea was to overtake competitors, whose machines were outperforming IBM's, with a whole new family of computers that would, for the first time, be compatible with one another, from the smallest to the largest. FORTUNE called the effort a $5 billion gamble, more ambitious than building the atomic bomb. The man in charge was one of IBM's best operating executives, the tough and imposing 6-foot 6-inch Vin Learson.

Williams and I felt that the 360 announcement ((in 1964)) was the appropriate moment to bring Dick into the IBM mainstream. Until then Vin had been in sole command of the project; now we set Dick up as his peer and divided responsibility between them. Dick was in charge of the engineering and manufacturing side of the business, and Vin was in charge of the sales force. In hindsight I think Vin deeply resented this change, and with reason -- the 360 was his product line, and here we were telling him to go out and sell it while we brought my brother in to finish Vin's job. But to Al and me at the time it seemed natural to divide responsibility between the two men. Although Dick had never launched a major product, he had presided over World Trade's complicated factory system in Europe. And we needed Vin, with his enormous drive and years of selling experience, out there twisting the tails of our salesmen. I honestly thought I'd given Vin the tougher job. The engineering and manufacturing side of the company had tremendous momentum on this project by then, while the sales force was starting from scratch. Not only did they have to turn the tide against our competition, but there was danger that the 360 would alienate a lot of customers. Those used to their current machines were almost sure to balk at the idea of rewriting their software to work with the new line. Vin's people had to persuade customers to make those conversions, while competitors' salesmen flocked around saying, ''Don't convert. Come to us. Convert to us.'' I was so afraid of losing customers that I called Dick and Vin into my office and lectured them sternly. I told Vin, ''If the sales force needs new features or extra software to move those machines, I want you to shout loud and clear and we will produce them for you.'' I told Dick, ''Be responsive to the sales side of the business.'' MY ANXIETY was misplaced. We got immense numbers of orders -- far more than expected -- and even more kept pouring in. Everybody felt euphoric at first, but then the 360 program seemed to get more complicated every month. Competitors found gaps in the new line and started winning away influential customers, so we had to add two new computers to the six we'd already unveiled. We announced a so-called supercomputer -- an ultrafast scientific machine -- to fight off Control Data, and a smaller, special-purpose processor to fight off General Electric. Each new machine required a major diversion of engineering talent. Meanwhile the effort to write basic software for the 360 line bogged down alarmingly. Six months after the 360 announcement, I began holding Monday morning meetings in my office, with serious problems on the table. Vin and Dick weren't getting along, and there was also tension between Dick and me. For the first time in our lives he was reporting to me on a day-to-day basis, and those meetings were fierce. I went after my brother in the same way I'd have gone after anybody else in that position. By some miracle hundreds of medium-size 360s were delivered on time in 1965. But that gave me no comfort, because behind the scenes I could see we were losing ground. The quality and performance of the computers were below the standards we'd set, and we were skipping some of the most rigorous tests. For months we had the chief testing engineer come to the Monday morning meeting. I'd ask, ''How are those machines performing?'' and he'd say, ''They're not making it.'' He'd set up his charts and show where we were going wrong. To make matters worse, we were delivering the new machines without the crucial software; customers were forced to use temporary programs much more rudimentary than what we'd promised, which meant that they couldn't get the full benefit of their machines. Yet customers were still ordering 360s faster than we could build them. With billions of dollars of machines already in our backlog, we were telling people that they'd have to wait two or three years for computers they needed. A lot of customers were unhappy about that, and I was worried that the slightest additional delay would drive them into our competitors' arms. The friction between Dick and Vin got completely out of hand. Their jobs were supposed to be complementary, but instead of supporting each other, they , were running a race. Vin did a superb job at rallying the sales force and persuading customers to make the transition to the 360. But he was constantly asking my brother for changes and enhancements in the machines to make them sell better still. He'd say, ''If we can't have this feature, it'll be very difficult to sell to the aircraft industry, and if we can't have that feature, it'll be very difficult to sell to department stores.'' I'd told him to do that, of course, but if there hadn't been this feeling of rivalry and resentment, I doubt he would have pushed so hard. Vin was an experienced production man and could see that the engineering staff was badly overloaded. Dick, for his part, had a go-for-broke attitude. He said yes too many times when he should have told Vin, ''I am freezing the production specifications now. You'll just have to sell the machines the way we build them.'' Dick would instead just turn around and put even more pressure on the engineers. In mid-October, Dick told us that a metallurgical problem at our new chip factory was going to cut production in half for the immediate future. The consequence was what we'd all feared: We were going to have to delay our computer shipments. ''How far are we going to miss these deliveries?'' I asked Dick. It wasn't a week or two weeks: It was three months. I PANICKED. Never in history had IBM missed a shipment date by that far, and with so much riding on System/360 we couldn't afford to now. When I realized I had no confidence that there wouldn't be further delays, I became very self- protective. I was 51, I had nine years of fantastic success behind me, and I didn't want my career wrecked by an announcement that the new product line was never going to fly at all. Under these circumstances, sparing Dick's feelings was the last thing on my mind.

As the accountants began closing the books on 1965, they got a surprise. Usually awash with cash from computer rentals, IBM was suddenly running out of funds. Work-in-progress inventory on the 360 was eating all the cash. In a few weeks, the company would have needed an emergency loan to meet the payroll. Watson never publicly disclosed the cash shortage, but it was the big reason IBM unexpectedly sold $370 million in stock that spring.

Dick and I were hardly talking at all. The more problems we turned up, the quieter he became, just as he had in the old days when Dad and I'd argued. By now I knew that my plan for bringing him into the domestic company had been a horrible blunder, bad for Dick's career and for our personal relationship. I thought I was giving Dick an opportunity in an area where he would be an outstanding success. Instead I had handed him a stacked deck. He couldn't hold his own against the demands put on him by Learson. Dick knew how to rally the engineers when they were almost too exhausted to go on, but he had little experience in running a rapidly changing engineering and development operation, and it was hard for him to manage the day-to-day particulars of the business. EVERYBODY was scared. Al and I agreed that if the 360 program was ever to get off the ground, we had to put it under a single manager, a dictator, and we knew it had to be Learson. Over the years Vin had proven again and again that he knew how to take hold of a troubled project and bring it off. I agonized about the effect this would have on my brother. I called Dick into my office on a gray December afternoon. ''I've got to tell you some things that are not very pleasant,'' I said. ''The future of the business depends on the 360. It looks bad now, and I'm going to have to take the whole project and put it under the person I believe is most competent to bring it out of the woods.'' I told him it was going to be Vin, and that Dick would shift over to be chief of the corporate staff, with no line-management responsibility. He was absolutely furious. ''In other words,'' he said, ''control of this entire business goes to him, and I'm left with some crumbs.'' In the following months we began to feel our way out of the manufacturing crisis. The machines weren't very good at the outset, but our service people kept them running in the field, and the more computers we built, the higher the quality became. Then the long-delayed software finally began to come, and suddenly the rose was blossoming. At the end of 1966 we had over $4 billion in revenues, something like 7,000 or 8,000 systems installed -- and $1 billion in pretax profits. The board of directors ((on Watson's recommendation)) elected Vin Learson president of IBM on January 26, 1966. Al Williams, taking the first step into early retirement, moved up to head the board's executive committee. We made Dick vice chairman, and he remained chairman of World Trade and a member of the executive committee. But for months afterward he came to the office only sporadically and kept to himself; his confidence seemed shaken. I felt nothing but shame and frustration at the way I'd treated him. There were so many other ways to have managed things. Perhaps the wisest course would have been to leave Dick in World Trade. He would have been known as the great IBM internationalist, and that, I think, would have been equal in honor to serving as chief executive for five or ten years. As it was, we remade the computer industry with the System/360, and objectively it was the greatest triumph of my business career. But whenever I look back on it, I think about the brother I injured, and the dream of my father's that I could never make come right.

What Watson calls Black Friday fell on January 17, 1969, the last working day of the Johnson Administration. The government sued IBM for violating the antitrust laws and demanded that it be broken up. In the 1969-70 recession, the company's domestic profits sank for the first time since the war, and the share price fell by nearly half.

Enough was going wrong by 1970 that I started to daydream about a very different kind of life. In the top drawer of my desk, mixed in with memos about key business issues and old letters from Dad, I had a secret list that I'd take out and look at when nobody was around. On it were adventures I wanted to have: Climbing the Matterhorn was first, then learning to fly a helicopter, going on safari, sailing to the Arctic and around Cape Horn, and making a single-handed voyage -- to anywhere. I also wanted time to enjoy myself with my wife and my wonderful children. My zest for business was evaporating fast. We'd built IBM into a $7-billion- a-year giant, and in my heart of hearts I felt that I'd taken it as far as I wanted to go. I was 56, and my life was a constant punch, punch, punch of making decisions and pushing IBM ahead -- running from crisis to crisis, going to company dinners, visiting plants. Each year was filled with hundreds of meetings and speeches and public appearances, so that I was doing something practically every night and spending as much time on the road as at home. I'd lived this way for more than 15 years, and Dad had kept it up all his life, but I was bone tired and fooling myself that the fast pace didn't bother me. During one hectic week I flew to Chicago to give a speech, and in the half hour I had to myself beforehand the thought suddenly came to me: ''I can't keep this up. Something is going to break.'' AS THE COMPANY struggled, my sense of isolation increased. Dick resigned from IBM in March to become U.S. Ambassador to France. His good feeling about the company had never been restored after the events surrounding System/360. I knew the ambassadorship was something Dad would have been proud of -- it took a weight off my heart to see my brother rise, despite my mismanagement, to the highest stature anyone in our family had attained. Still, it was painful for me to think that when I stepped down, there would be no Watson to pass the business to. Problems piled up on me and there was no escape. If I had been a drinker in those days, I'd have quickly killed myself. Vacations didn't help. I threw myself into skiing -- we must have gone on a dozen ski trips in 1969 alone -- and when the weather was warm I raced my sailboat. But afterward I'd go back to IBM with my nerves just as taut as before. By fall 1970 my discouragement showed. People who worked around me say that I became more and more volatile, flying into rages over petty details like the way snow was plowed in the parking lot. Late on a Wednesday afternoon in mid-November, I was in my office, and Jane Cahill, my executive assistant, started to come in the door. Then she stopped cold, because I had my head down on the desk. ''Are you all right?'' she asked. ''I'm fine. I'm tired,'' I said. Jane offered to drive me home, but I told her I'd drive myself. That night I woke up with a pain in my chest. It wasn't very intense but it wouldn't go away. Olive was in the Caribbean with friends, so I drove myself to the emergency room at Greenwich Hospital, where they put me on a monitor. By morning I'd convinced myself I was fine and told the internist that I wanted to leave. He said, ''You're not going anywhere. You're having a heart attack.'' ''Impossible!'' I thought. ''Dad never had a heart attack.'' But they wheeled me into intensive care and put me into an oxygen tent. DR. MARK NEWBERG, the internist, was an energetic, attractive man. Over the next three weeks he had long talks with me about what a heart attack is, how serious mine had been, how long I'd need to recuperate, and so forth. Finally he said, ''You know more about heart attacks than any patient I ever had.'' ''I'm trying to avoid having another one,'' I said. ''Well, as long as we're on the subject, what are you planning to do when you get out of here?'' I said, ''I don't know -- go back and maybe retire in a few years.'' Newberg looked me in the eye and said, ''Why don't you get out now?'' I was so stunned by this suggestion that I couldn't think about anything else for the rest of the day. I realized that the strain of running IBM had taken a huge toll. Now I was being offered a way to step down with honor.

Having put command of IBM in Learson's hands, Watson sent for his secret list of adventures. Most were too arduous for a recovering heart-attack patient, but he thought he could sail. He called Olin Stephens, the yacht designer, and Paul Wolter, Palawan's professional captain, to his bedside. Soon they were immersed in plans for a new boat.

I came home 30 days after the heart attack. I had to face the slow ordeal of recuperating physically and emotionally from my illness. When you have a heart attack, you realize how fragile your body is. I felt that mine had let me down, damn near entirely, and for several months I had very volatile reactions to insignificant things. I kept to myself during the weeks that followed, working on my plans for the new boat. In the barn behind our house Paul Wolter built full-size mock-ups of sections of the hull. I wasn't supposed to get out of bed, but I'd sneak out there and look at it for hours, imagining what the boat would be like, and debating with Paul about the changes we ought to make. Finally, after a couple of months had passed, I went back to IBM and told people I was thinking of getting out. The board of directors did everything in the world to keep me in the company. They came to me individually and as a group. ''You're so valuable to the business,'' they said. ''Can't you just arrange your schedule so you're under less stress?'' IBM has one of the best boards in the world, but all boards have a common failing. If the chief executive has done well, they won't push for a successor to be designated until something goes wrong -- and then they often end up hiring a new man pell-mell from outside. All the same, I tried it their way for a little while. The doctor had told me to do a lot of walking to build up my heart. So I'd leave my office and pace around the grounds of our headquarters. He also ordered me to lie down for an hour or two after lunch. So each day I'd eat and then lie down. But you can't run a big company like that. I'd get up from my couch and look into the outer office and I'd see people with important problems cooling their heels. That wasn't the example I wanted to set. After two months I finally went to the board and told them it wasn't going to work. I knew I was doing the right thing. I wanted to live more than I wanted to run IBM. It was a choice my father never would have made, but I think he would have respected it.

What has Watson been up to in his 20 years since leaving IBM? A lifelong Democrat (as was his father), he served the Carter Administration as head of the General Advisory Committee on Arms Control and Disarmament and as Ambassador to the Soviet Union. In the adventure category, he has climbed the Matterhorn, sailed four major voyages as far as Antarctica and Fiji, learned to pilot a helicopter, and taken up stunt flying. Not bad for retirement.