Forum pays tribute to IBM’s ‘heart and soul’

IBM has lasted for 100 years because the company has a soul, journalist/author Kevin Maney told the Binghamton University Forum at its annual dinner on June 11.

And that soul has always been in Endicott.

“IBM has been important, vital and contributed to inventions and technology for 100 years,” Maney said during the black-tie gala held at the Appalachian Collegiate Center. “It has had some hiccups here and there, but in this moment of time it’s really strong. How does a company do this? It’s a soul. This company has never been about a particular product or strategy or business sector. It’s always had a sense of itself – a culture that glues people together.

“The soul comes from the early days, your beginnings. That is about Endicott.”

Maney praised the community as IBM prepares to celebrate its centennial on June 16. A book co-written by Maney about the history of the company, Making the World Work Better: The Ideas That Shaped a Century and a Company, also will be released that day.

A Binghamton native who covered IBM as a business reporter for the Binghamton Press in the 1980s and later for the Westchester newspapers and USA Today, Maney said he became an IBM historian “by accident.” A decade ago, he pitched the idea of a biography of longtime IBM president Thomas J. Watson Sr. to the company. Maney was then given access to boxes of previously unseen personal papers by Watson.

“I had a chance to have an insight into (Watson’s) life and the early days of IBM that nobody ever had,” said Maney, who in 2003 authored The Maverick and His Machine: Thomas Watson Sr. and the Making of IBM. “This led IBM to turn to me when the 100th anniversary was starting to unfold. They asked me to work on the new book.”

Maney provided several historical anecdotes about Watson, IBM and Endicott to the Forum members and dinner guests. Upon taking over IBM in 1914, Watson immediately realized that the company had a problem in Endicott: Everyone wanted to work for Endicott-Johnson Shoe Company, which Maney called “the Nike of the day.”

“(E-J Executive) George F. Johnson was one of the most progressive CEOs of the era,” Maney said. “He bought houses for employees, built parks, paid employees better than what the unions were asking for and cut down days from 10 to eight hours. The employees loved this guy.”

Johnson’s words of encouragement to Watson during a meeting proved to be a turning point in IBM’s history.

“Johnson said, ‘This place has an amazing attitude for work,’” Maney said. “’People want to work. You will do great here, but you are going to have to step it up and treat people better.’”

Watson took Johnson’s advice, putting his employees first while building a schoolhouse that served as the company’s “indoctrination center,” a state-of-the-art lab on Endicott’s North Street with air conditioning and tunnels, and a company country club. Watson also used company songs to create a family-like culture and stressed an “optimism about science and technology” by hiring researchers who were laid off during the Great Depression.

“This is how IBM became the paternalistic company we all became familiar with,” Maney said. “It was all because Watson wanted to compete for employees with George F. Johnson.

“Endicott slowly morphed into IBM’s spiritual center,” he added. “IBM and Watson were in New York City, but he admitted that the heart and soul of IBM was this community on North Street.”

The company’s second turning point took place in 1935, when President Franklin D. Roosevelt signed the Social Security Act.

“In the history of the United States up to that point, nobody had created a bigger information problem with one signature of the pen,” Maney said.

Watson and IBM stepped forward, having already invested in laboratories, equipment and technology. By 1937, IBM tabulating equipment was being used for Social Security record-keeping.

“This becomes IBM’s swing shot,” Maney said.  “This is why IBM dominated the industry for the next 50 years.”

Watson would become “the Bill Gates of his time,” Maney added, and be the highest-paid executive in the United States in the late 1930s. He would lead IBM until 1952.

Although IBM’s presence in the community is far from its heights of the middle of the 20th century, the company is still making an impact, Maney said. The Binghamton area has the highest concentration per capita of IBM stockholders in the world, he said, and that wealth has helped businesses and institutions such as Binghamton University.

“This community has a lot to be proud of when it looks back on the 100th anniversary,” he said. “IBM got to be what it is today because of this remarkable soul that it had. If you want to see what that soul is, all you have to do is drive down North Street and you will see it all around. … Your generation and the generations before you made this happen.”

Also at the dinner:

• President C. Peter Magrath told Forum members and guests that Binghamton University will be included the NYSUNY2020 legislation. The plan, if approved, will provide capital funding and greater tuition flexibility for the university centers, including Binghamton.
• Founding Forum members Burton Koffman, Ruthanne Koffman, Ara Kradjian, Eugene Peckham and Glenn Small will be enshrined in the newly established Harpur Forum Circle of Honor.  Previous members who have been honored for exemplary service to the University and community will also be enshrined.
• Officers for 2012 were announced: Lawrence A. Kiley will replace Fannie Linder as chair; Patricia Gazda-Grace and Ronald Goodwin will serve as first and second vice chair, respectively. Brian Sickora will be the secretary.