Thomas Watson on Mistakes

Quote Quiz

With razor thin margins many employers will not tolerate major mistakes by those on the payroll. Make a mistake and you could find yourself heading to human resources for your final conversation. The unexpected consequence of this action is that employees stop taking the risk unnecessary to develop new products, deploy better procedures or go after a big sale.

This was not the case with Thomas J. Watson. As chairman and CEO of IBM from 1914 to 1956, Watson is credited with growing the company into an international technology conglomerate. He was also one of the first to understand the concept that everybody in the company as part of the sales process.

Watson created a corporate culture different from his competitors by seeing his employees as a company asset to be nurtured and grown. Employee expenses were seen as an investment in the future of the company at a time when margins were as proportionately razor thin as they are today.

In particular, he liked employees who are willing to take risk to grow his company. “I was asked if I was going to fire an employee who made a mistake that cost the company $600,000,” said Watson. “No, I replied. I just . . .”

What surprised people was the reason that he gave or retaining the employee who, in this example, been responsible for losing about 1/10 of 1% of the company’s profit.

What do you think was Watson's reasoning? Scroll down to see.

I just spent $600,000 training him. Why would I want somebody to hire his experience?”

Watson’s reality is still true today. Mistakes are not so much about the individual that made them as they are about the culture that allow them to happen. Watson’s goals for his employees were that they would look at themselves as salespeople and take a risk if they felt it was helping the company. In this kind of scenario mistakes will happen. They are a cost of doing business. But in the long run if the employer can develop their employees the company becomes much stronger – and much more profitable!

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