This is a book about the similarities in symbology between diverse religions and cultures. Once understood, it will be seen that the differences are not nearly as large as is commonly thought
The call to adventure
Refusal of the call
Meeting the mentor
Crossing the threshold
Approaching the innermost cave
Reward / bliss
The road back
Master of two worlds
Monomyth – all stories from all cultures are basically the same since they try to convey universal truths and how the human experience is reflected as part of our larger universe
The desire for humans to explains leads to myths, heroes, religions, science
Mythology is everywhere the same regardless of the surface costumes they may wear
All neurotics are either Oedipus or Hamlet. Father or mother is the perceived enemy of the child
Dreams bubble up and anthropomorphize issues we are dealing with. There is much noise but it can provide insight as well
Nuclear unit of the monomyth lies in going away, initiation and return
Regrets are illuminations made too late
Cosmogonic Cycle – the creation and destruction of the universe. Universe begins as amorphous blob until a creative force gives it shape. It is initially perfect until people create chaos, leading to the end of the world and back to a unified whole where the cycle repeats
What I got out of it
The “master key” to storytelling. Amazing how this blueprint is found in all varieties of religions, myths, histories and other stories!
Author wrote this book to broadly summarize the life of Jesus and to explain the joy he gets from following him
Jesus was born in the context of a very powerful and expanding Rome and a wealthy Judea ruled by Herod
When Gabriel told Mary that she would bear Jesus, The Annunciation as it later became known, is one of the most touching moments in history
Jesus’ time as a shepherd affected him throughout his life – his love of high places for prayer and how he delivered and thought about sermons
No prophet is accepted in his own country
Jesus was a reluctant performer of miracles as he knew that this could cause a stir and possibly riots. It made people realize he was special but also aroused the anger of the authorities
Jesus’ teachings were often new and counterintuitive. They stressed forgiveness and inner acceptance rather than riches and outer rewards
Compassion has quite literally no limits. Not race, sex, religion, status or any other common dividing line
Jesus was a poet and almost always used very memorable images and parables to get his lessons across. It was his way of directing and capturing emotion
We are all neighbors and our salvation and happiness depends on kindness and charity, not tribe or nationality or race
Heaven is not so much about justice as mercy
Jesus’ redeeming feature was his friendliness, opennness and willingness to listen. He accepted everyone as they were
Jesus made marriage indissoluble and this gave women status like never before. He was also unique in his love of children and their innocence
The aim of Jesus was not to change the world but to make its inhabitants fit for the kingdom of God. He did not want to start a new regime but portray a new way of life. A leader whose goals are entirely spiritual was new to the world at this point
Personality is unique but incomplete. Soul is given by God and has a need to return. Through free will we can accept this and return to the kingdom
You cannot lay down laws of love but you can show them and that is how Jesus lives his life
A life of mercy is a holy one. Grace is mercy. By showing mercy, we act as close to God as we can
He was a man who always kept his head, was always equanimous
Was against those whose minds were closed
Truth is both found in God and in nature. That is why he went to the desert to pray
Jesus frightened the current religious orders as he was attracting a huge following. The priests trembled for their lives, jobs and property. They did not believe or understand that Jesus’ kingdom was solely a spiritual one
Pilate did not condemn Jesus because he thought he was guilty but because he was afraid that the Jewish religious leaders would report him to Rome. In fact, him and his wife thought him innocent
After the crucifixion, Jesus was resurrected and Mary Magdalene was the first to see him and to report back to the Disciples. Shortly after, there was a mass baptism for 3,000 people and thus began Christianity
The Gospels are meant to be read and re-read, gaining something new or a deeper understanding every time
What I got out of it
I really enjoyed and learned a lot about Jesus, his teachings and more from this short biography
The author spends a lot of time describing Amelia’s ancestors, their settlement in Kansas which was a hotbed for abolishment and pro-slavery tension and how this affected her desire for equality in opportunity
Amelia was smart, healthy and independent from a very early age – singing herself to sleep by age 2. She was adventurous and would always love exploring and trying new things. Because of the restrictions placed on girls, her and her friends would often pretend to be boys and roughhouse with the boys near them
Her father, Edwin, eventually became an alcoholic and forced the family to move several times. He saw reality not as it was but how he wanted it to be and this often put him and his family in a difficult position. Amelia also had to take care of her mother for a while because of poor health. She didn’t have much time to simply be a teenager
Amelia volunteered to help serve the wounded in Canada during WWI and this got her exposure to airplanes and flying. Her obsession grew with every air meet and once she moved out to California, her passion was stoked. She learned from some great teachers but she was able to recognize their flaws and limitations and either find someone else to learn from or went her own way. She soon became quite well known for her stunts and other flight tricks.
Pasadena, Glendale and LA became the hotbed for everything related to avionics
She went to Columbia but experienced some financial difficulty and health issues and at 28 was further away from a career than she was at 21
A relative of steel baron Henry Phipps wanted to be the first woman to fly solo across the Atlantic after Lindbergh accomplished the feat in 1927 but determined it was too risky. Instead, she wanted to choose an able women she thought could do it. She wanted someone young, educated, attractive and who had some flight experience. They chose Amelia
Amelia was always a fan of poetry and had a tendency to retreat into it when uncomfortable or difficult situations arose
Amelia received much attention and recognition after completing her first cross-Atlantic flight on the Friendship as a passenger. She gained incredible notoriety and was able to work at the Cosmopolitan magazine, fly and continue her social work
Several years later she would fly transatlantic solo and be the first person to have flown over twice
She married George Putnam of the famous publishing house. Though she was married, she made it clear that her career and ambitions would come first
She used her name wealth and notoriety to get into many different new projects from helping start an airline (what would eventually become Northeastern Airlines) to designing her own line of flying clothes which were prominently displayed at Marshall Field’s stores
Amelia got involved with Purdue to inspire women and as a technical advisor to the Department of Aeronautics
Will Rogers, probably the most popular man in America, did more than anybody except Lindbergh to popularize flying
Amelia began her round the world flight just before her 40th birthday. The trip was quite smooth until her leg from Papua New Guinea to Howland Island. The US Navy, her suspected lover Gene Vidal and her husband didn’t give up looking for her for nearly a year. Incredible conspiracy stories arose from the Japanese having captured and tortured her, to her being a spy for the Navy to study Japanese defenses and more but eventually it was agreed that she had crashed and her plan had sunk to the bottom of the Pacific in 1937
Amelia was an inspiration in her generation and has been since her death. She set her mind and made her goals happen in a time when many of these goals were deemed inappropriate for women to pursue
What I got out of it
Good biography on Amelia Earhart and her accomplishments – first solo female flight across the Atlantic, many other flight records and many successful ventures in business and academia
Henry Ford recounts his life and the business philosophy which helped him create one of the most innovative and dominant companies of all time. “The essence of my idea is that waste and greed block the delivery of true service. Both waste and greed are unnecessary. Waste is due largely to not understanding what one does, or being careless in doing of it. Greed is merely a species of nearsightedness. I have striven toward manufacturing with a minimum of waste, both of materials and of human effort, and then toward distribution at a minimum profit, depending for the total profit upon the volume of distribution. In the process of manufacturing I want to distribute the maximum of wage – that is, the maximum of buying power. Since also this makes for a minimum cost and we sell at a minimum profit, we can distribute a product in consonance with buying power. Thus everyone who is connected with us – either as a manager, worker or purchaser – is the better for our existence. The institution that we have erected is performing a service. That is the only reason I have for talking about it. The principles of that service are these:
An absence of fear of the future and of veneration for the past. One who fears the future, who fears failure, limits his activities. Failure is only the opportunity more intelligently to begin again. There is no disgrace in honest failure; there is disgrace in fearing to fail. What is past is useful only as it suggests ways and means for progress.
A disregard of competition. Whoever does a thing best ought to be the one to do it. It is criminal to try to get business away from another man – criminal because one is then trying to lower for personal gain the condition of one’s fellow man – to rule by force instead of by intelligence.
The putting of service before profit. Without a profit, business cannot extend. There is nothing inherently wrong about making a profit. Well–conducted business enterprise cannot fail to return a profit, but profit must and inevitably will come as a reward for good service. It cannot be the basis – it must be the result of service.
Manufacturing is not buying low and selling high. It is the process of buying materials fairly and, with the smallest possible addition of cost, transforming those materials into a consumable product and giving it to the consumer. Gambling, speculating, and sharp dealing, tend only to clog this progression.”
Business exists for service but the present system does not permit of the best service because it encourages every type of waste. It keeps many men from getting the full return from service
The natural thing to do is work – to recognize that prosperity and happiness can be obtained only through honest effort. Human ills flow largely from attempting to escape from this natural course. I have no suggestion which goes beyond accepting in its fullest this principle of nature. I take it for granted that we must work. All that we have done comes as the result of a certain insistence that since we must work it is better to work intelligently and forehandedly; that the better we do our work the better off we shall be. All of which I conceive to be merely elemental common sense.
As we serve our job we serve the world – Do your job! As you do anything, is how you do everything
Business is never as healthy as when, like a chicken, a certain amount of scratching has to be done. Things cannot come too easily
It is what a thing does, not what it is meant to do, that matters. For anyone to be required to use more force than is absolutely necessary for the job on hand is waste
The principal part of the chisel is the cutting edge.
Above all else, first find a good idea. Given a good idea to start with, it is better to concentrate on perfecting it than to hunt around for a new idea. One idea at a time is about as much as anyone can handle
The way I have always worked is to draw out a plan and work out every detail of the plan before starting to build. Many inventors fail because they do not distinguish between planning and experimenting
There was no way the Model T could not be successful for it was not made in a day. Every detail had been fully tested in practice
There is an immense amount to be learned simply by tinkering with things. It is not possible solely to learn from books. Can get ideas from them but must use one’s brains to apply them
I loved watching and almost went into the business but did not because I figured out that watches are not universal necessities and people generally would not buy them. Even then I wanted to produce something in quantity
I read everything I could find, but the greatest knowledge came from the work
No work with interest is ever hard
It does not pay to hurry
There was no demand for automobiles when I first started. There never is for new articles
Early on, the general population only cared for speed. Although Ford thought that raw speed was a poor metric to optimize for, he knew his consumers and what they wanted. So, he built a car to beat the world’s fastest drivers and got press that way. He balanced what the consumers wanted while also keeping in mind and knowing what the consumer did not know they wanted.
The most surprising thing I found about business was the large concern for finance and low concern for service
Time spent fighting the competition is wasted – it had better be spent doing the work
The man who has the largest capacity for work and thought is bound to succeed
The whole progress of the company had always been financed out of earnings. Everything is being done out of earnings. That is our policy
No stunt and no advertising will sell any article for any length of time
Money is only worth what it will help you produce or buy. No more
Worst of all advertisements is a dissatisfied customer
The refinement and use of vanadium made the universal car possible as it was light and strong and it had to have these attributes:
Quality in material to give service in use. Vanadium steel is the strongest, toughest, and most lasting of steels. It forms the foundation and super–structure of the cars. It is the highest quality steel in this respect in the world, regardless of price
Simplicity in operation – because the masses are not mechanics
I believed then, although I said very little about it because of the novelty of the idea, that it ought to be possible to have parts so simple and so inexpensive that the menace of expensive hand repair work would be entirely eliminated. The parts could be made so cheaply that it would be less expensive to buy new ones than to have old ones repaired. They could be carried in hardware shops just as nails or bolts are carried. I thought that it was up to me as the designer to make the car so completely simple that no one could fail to understand it.
That works both ways and applies to everything. The less complex an article, the easier it is to make, the cheaper it may be sold, and therefore the greater number may be sold
Power in sufficient quantity
Absolute reliability – because of the varied uses to which the cars would be put and the variety of roads over which they would travel
Lightness. With the Ford there are only 7.95 pounds to be carried by each cubic inch of piston displacement. This is one of the reasons why Ford cars are “always going,” wherever and whenever you see them – through sand and mud, through slush, snow, and water, up hills, across fields and road less plains
Control – to hold its speed always in hand, calmly and safely meeting every emergency and contingency either in the crowded streets of the city or on dangerous roads. The planetary transmission of the Ford gave this control and anybody could work it. That is the “why” of the saying: “Anybody can drive a Ford.” It can turn around almost anywhere
The more a motor car weights, naturally the more fuel and lubricants are used in the driving; the lighter the weight, the lighter the expense of operation. The light weight of the Ford car in its early years was used as an argument against it. Now that is all changed
Any customer can have a car painted any color he wants so long that it is black
Principles of assembly:
Place the tools and the men in the sequence of the operation so that each component part shall travel the least possible distance while in the process of finishing
Use work slides or some other form of carrier so that when a workman completes his operation, he drops the part always in the same place – which place must always be the most convenient place to his hand – and if possible have gravity carry the part to the next workman for his operation
Use sliding assembling lines by which the parts to be assembled are delivered at convenient distances
The net result of the application of these principles is the reduction of the necessity for thought on the part of the worker and the reduction of his movements to a minimum
The laws of business are like the laws of gravity and the man who opposes them feels their power
Very worst time to try to raise money is when bankers think you need it. And that is the danger of having bankers in business. They think solely in terms of money. They think of a factory as making money, not goods. They want to watch the money, not the efficiency of production. They cannot comprehend that a business never stands still, it must go forward or go back. They regard a reduction in prices as a throwing away of profit instead of as a building of business
Adhering and honoring the power of the Red Queen Effect. If you are not moving forward, you are moving backward. As your ecosystem is continuously moving forward, if you’re simply standing still it is the same as falling behind
This season demonstrated conclusively to me that it was time to put the new policy in force. The salesman, before I had announced the policy, were spurred by the great sales to think that even greater sales might be had only if we had more models. It is strange how, just as soon as an article becomes successful, somebody starts to think that it would be more successful if only it were different. There is a tendency to keep monkeying with styles and to spoil a good thing by changing it. The salesmen were insistent on increasing the line. They listened to the 5%, the special customers who could say what they wanted, and forgot about the 95% who just bought without making a fuss. No business can improve unless it pays the closets possible attention to complaints and suggestions. If there is any defect in serve then that must be instantly and rigorously investigated, but when the suggestion is only as to style, one has to make sure whether it is not merely a personal whim that is being voiced. Salesman always want to cater to whims instead of acquiring sufficient knowledge of their product to be able to explain to the customer the whim that what they have will satisfy his every requirement – that is, of course, provided what they have does satisfy these requirements.
Everything can always be done better than it is being done
With the tractor we followed the exact same course as with the automobile. Each part had to be as strong as it was possible to make, the parts had to be few in number, and the whole had to admit of quantity production
Ford bought the Detroit, Toledo and Ironton Railway in 1921 and applied “industry principles” – turned a terribly performing, unreliable line into a powerhouse. The railroads in general have broken down, and if the former conduct of the DTI is any criterion of management in general there is no reason in the world why they should not have broken down. Too many railroads are run, not from the offices of practical men, but from banking offices, and the principles of procedure, the whole outlook, are financial – not transportational, but financial. There has been a breakdown simply because more attention has been paid to railroads as factors in the stock market than as servants of the people. Outworn ideas have been retained, development has been practically stopped, and railroad men with vision have not been set free to grow. Will a billion dollars solve that sort of trouble? No, a billion dollars will only make the difficulty one billion dollars worse. The purpose of the billion is simply to continue the present methods of railroad management, and it is because of the present methods that we have any railroad difficulties at all.
It is one of nature’s compensations to withdraw prosperity from the business which does not serve
Being greedy for money is the surest way not to get it, but when one serves for the sake of service – for the satisfaction of doing that which one believes to be right – then the money abundantly takes care of itself. Money comes naturally as the result of service. And it is absolutely necessary to have money. But we do not want to forget that the end of money is not ease but the opportunity to perform more service. In my mind nothing is more abhorrent than a life of ease. None of us has any right to ease. There is no place in civilization for the idler
I disagree slightly on his point about the idler. Some idle and leisure time has been a sure sign of progress and civilization throughout history. This “down” time is necessary for thought, innovation, breakthroughs, to gain perspective and see things differently. This cannot be the state of the whole population but it must exist for a select few.
He is a wise merchant who would rather take less profit and keep business moving than keep his stock at high prices and bar the progress of his community. A man like that is an asset to a town. He has a clear head. He is better able to swing the adjustment through his inventory than through cutting down the wages of his delivery men – through cutting down their ability to buy
I have heard it said, in fact I believe it is quite a current thought, that we have taken skill out of work. We have not. We have put in skill. We have put a higher skill into planning, management, and tool building, and the results of that skill are enjoyed by the man who is not skilled
The factory keeps no record of experiments. The foremen and superintendents remember what has been done. If a certain method has formerly been tried and failed, somebody will remember it – but I am not particularly anxious for the men to remember what someone else has tried to do in the past, for then we might quickly accumulate far too many things that could not be done. That is one of the troubles with extensive records. If you keep on recording all of your failures you will shortly have a list showing that there is nothing left for you to try – whereas it by no means follows because one man has failed in a certain method that another man will not succeed. We get some of our best results from letting fools rush in where angels fear to tread. None of our men are “experts.” We have most unfortunately found it necessary to get rid of a man as soon as he thinks himself an expert – because no one ever considers himself expert if he really knows his job. A man who knows a job sees so much more to be done than he has done, that he is always pressing forward and never gives up an instant of thought to how good and how efficient he is. Thinking always ahead, thinking always of trying more, brings a state of mind in which nothing is impossible. The moment one gets into the “expert” state of mind a great number of things become impossible
That which one has to fight hardest against in bringing together a large number of people to do work is excess organization and consequent red tape. To my mind there is no bent of mind more dangerous than that which is sometimes described as the “genius for organization.” This usually results in the birth of a great big chart showing, after the fashion of a family tree, how authority ramifies. The tree is heavy with nice round berries, each of which bears the name of a man or of an office. Every man has a title and certain duties which are strictly limited by the circumference of his berry. Now a business, in my way of thinking, is not a machine. It is a collection of people who are brought together to do work and not to write letters to one another. It is not necessary for any one department to know what any other department is doing. If a man is doing his work he will not have time to take up any other work. It is the business of those who plan the entire work to see that all of the departments are working properly toward the same end. It is not necessary to have meetings to establish good feeling between individuals or departments. It is not necessary for people to love each other in order to work together. Too much good fellowship may indeed be a very bad thing, for it may lead to one man trying to cover up the faults of another. That is bad for both men.
We make the individual responsibility complete. The workman is absolutely responsible for his work. The straw boss is responsible for the workmen under him. The foreman is responsible for his group. The department head is responsible for the department. The general superintendent is responsible for the whole factory. Every man has to know what is going on in his sphere
The habit of acting shortsightedly is a hard one to break. What can be done? Nothing. No rules or laws will affect the changes. But enlightened self–interest will. It takes a little while for enlightenment to spread. But spread it must, for the concern in which both employer and employees work to the same end of service is bound to forge ahead in business
Waste is prevented by far-sighted not by short-sighted men. Short-sighted men think first of money. They cannot see waste. They think of service as altruistic instead of as the most practical thing in the world. They cannot get far enough away from the little things to see the big things – to see the biggest thing of all, which is that opportunist production from a purely money standpoint is the least profitable. Service can be based upon altruism, but that sort of service is not usually the best. The sentimental trips up the practical.
Capital that is not constantly making conditions of daily labor better and the reward of daily labor more just, is not fulfilling its highest function. The highest use of capital is not to make more money, but to make money do more service for the betterment of life. Unless we in our industries are helping to solve the social problem, we are not doing our principal work. We are not fully serving.
More men are beaten than fail. It is not wisdom they need or money, or brilliance or “pull,” but just plain gristle and bone. This rude, simple, primitive power which we call “stick-to-it-iveness” is the uncrowded king of the world of endeavor. People are utterly wrong in their slant upon things. They see the success that men have made and somehow they appear to be easy. But that is a world away from the facts. It is failure that is easy. Success is always hard. A man can fail in ease; he can succeed only by paying out all that he has and is. It is this which makes success so pitiable a thing if it be in lines that are not useful and uplifting.
Business should be on the side of peace, because peace is business’ best asset
France has something to give the world of which no competition can cheat her. So has Italy. So has Russia. So have the countries of South America. So has Japan. So has Britain. So has the United States. The sooner we get back to a basis of natural specialties and drop this free–for–all system of grab, the sooner we shall be sure of international self-respect – and international peace. Trying to take the trade of the world can promote war. It cannot promote prosperity. Someday even the international bankers will learn this.
You can hardly have too much harmony in business. But you can go too far in picking men because they harmonize. You can have so much harmony that there will not be enough of the thrust and counter thrust which is life – enough of the competition which means effort and progress. It is one thing for an organization to be working harmoniously toward one object, but it is another thing for an organization to work harmoniously with each individual unit of itself. Some organizations use up so much energy and time maintaining a feeling of harmony that they have no force left to work for the object for which the organization was created. The organization is secondary to the object. The only harmonious organization that is worth anything is an organization in which all the members are bent on the one main purpose – to get along toward the objective. A common purpose, honestly believed in, sincerely desired – that is the great harmonizing principle.
I pity the poor fellow who is so soft and flabby that he must always have “an atmosphere of good feeling” around him before he can do his work. There are such men. And in this end, unless they obtain enough mental and moral hardiness to lift them out of their soft reliance on “Feeling,” they are failures. Not only are they business failures; they are character failures also; it is as if their bones never attained a sufficient degree of hardness to enable them to stand on their own feet. There is altogether too much reliance on good feeling in our business organizations. People have too great a fondness for working with the people they like. In the end it spoils a good many valuable qualities.
We began to manufacture according to a creed – a creed which was at that time unknown in business. The new is always thought odd, and some of us are so constituted that we can never get over thinking that anything which is new must be odd and probably queer. The mechanical working out of our creed is constantly changing. We are continually finding new and better ways of putting it into practice, but we have not found it necessary to alter the principles, and I cannot imagine how it might ever be necessary to alter them, because I hold that they are absolutely universal and must lead to a better and wider life for all. If I did not think so I would not keep working – for the money that I make is in consequent. Money is useful only as it serves to forward by practical example the principle that business is justified only as it serves, that it must always give more to the community than it takes away, and that unless everybody benefits by the existence of a business then that business should not exist.
Progress comes from a generous form of rivalry. Bad competition is personal. It works for the aggrandizement of some individual or group. It is a sort of warfare. It is inspired by a desire to “get” someone. It is wholly selfish. That is to say, its motive is not pride in the product, nor a desire to excel in service, nor yet a wholesome ambition to approach to scientific methods of production. It is moved simply by the desire to crowd out others and monopolize the market for the sake of the money returns. That being accomplished, it always substitutes a product of inferior quality.
All the wise people demonstrated conclusively that the engine could not compete with steam. They never thought that it might carve out a career for itself. That is the way with wise people – they are so wise and practical that they always know to a dot just why something cannot be done; they always know the limitations. That is why I never employ an expert in full bloom. If I ever wanted to kill opposition by unfair means I would endow the opposition with experts. They would have so much good advice that I could be sure they would do little work.
My idea was then and still is that if a man did his work well, the price he would get for that work, the profits and all financial matters, would care for themselves and that a business ought to start small and build itself up and out of its earnings. If there are no earnings then that is a signal to the owner that he is wasting his time and does not belong in that business
And I also noticed a tendency among many men in business to feel that their lot was hard – they worked against a day when they might retire and live on an income – get out of the strife. Life to them was a battle to be ended as soon as possible. That was another point I could not understand, for as I reasoned, life is not a battle except with our own tendency to sag with the down pull of “getting settled.” If to petrify is success all one has to do is to humor the lazy side of the mind but if to grow is success, then one must wake up anew every morning and keep awake all day. I saw great businesses become but the ghost of a name because someone thought they could be managed just as they were always managed, and though the management may have been most excellent in its day, its excellence consisted in its alertness to this day, and not in slavish following of its yesterdays. Life, as I see it, is not a location, but a journey. Even the man who most feels himself “settled” is not settled – he is probably sagging back. Everything is in flux, and was meant to be. Life flows. We may live at the same number of the street, but it is never the same man who lives there
The public is wary. It thinks that the price cut is a fake and it sits around waiting for a real cut. We saw much of that last year. If, on the contrary, the economies of making are transferred at once to the price and if it is well known that such is the policy of the manufacturer, the public will have confidence in him and will respond. They will trust him to give honest value. So standardization may seem bad business unless it carries with it the plan of constantly reducing the price at which the article is sold. And the price has to be reduced (this is very important) because of the manufacturing economies that have come about and not because the falling demand by the public indicates that it is not satisfied with the price. The public should always be wondering how it is possible to give so much for the money. Standardization (to use the word as I understand it) is not just taking one’s best–selling article and concentrating on it. It is planning day and night and probably for years, first on something which will best suit the public and on how it should be made. The exact processes of manufacturing will develop of themselves. Then, if we shift the manufacturing from the profit to the service basis, we shall have a real business in which the profits will be all that anyone could desire.
My associates were not convinced that it was possible to restrict our cars to a single model. The automobile trade was following the old bicycle trade, in which every manufacturer thought it necessary to bring out a new model each year and to make it so unlike all previous models that those who had bought the former models would want to get rid of the old and buy the new. That was supposed to be good business. It is the same idea that women submit to in their clothing and hats. That is not service – it seeks only to provide something new, not something better. It is extraordinary how firmly rooted is the notion that business – continuous selling – depends not on satisfying the customer once and for all, but on first getting his money for one article and then persuading him he ought to buy a new and different one. The plan which I then had in the back of my head but to which we were not then sufficiently advanced to give expression, was that, when a model was settled upon then every improvement on that model should be interchangeable with the old model, so that a car should never get out of date. It is my ambition to have every piece of machinery, or other non–consumable product that I turn out, so strong and so well made that no one ought ever to have to buy a second one. A good machine of any kind ought to last as long as a good watch.
“How soon will Ford blow up?” Nobody knows how many thousand times it has been asked since. It is asked only because of the failure to grasp that a principle rather than an individual at work, and the principle is so simple it seems almost mysterious. Modern methods applied in a big way have not only brought the cost of axe handles down to a fraction of their former cost – but they have immensely improved the product. It was the application of these same methods to the making of the Ford car that at the very start lowered the price and heightened the quality. We just developed an idea. The nucleus of a business may be an idea. That is, an inventor or a thoughtful workman works out a new and better way to serve some established human need; the idea commends itself, and people want to avail themselves of it. In this way a single individual may prove, through his idea or discovery, the nucleus of a business. But the creation of the body and bulk of that business is shared by everyone who has anything to do with it. No manufacturer can say: “I built this business” – if he has required the help of thousands of men in building it. It is a joint production. Everyone employed in it has contributed something to it. By working and producing they make it possible for the purchasing world to keep coming to that business for the type of service it provides, and thus they help establish a custom, a trade, a habit which supplies them with a livelihood. That is the way our company grew.
My effort is in the direction of simplicity. Real simplicity means that which gives the best service and is the most convenient in use. Start with an article that suits and then study to find some way of eliminating all the useless parts. This applies to everything – a shoe, a dress, a house, a piece of machinery, a railroad, a steamship, an airplane. As we cut out useless parts and simplify necessary ones we also cut down the cost of making. This is simple logic, but oddly enough the ordinary process starts with a cheapening of the manufacturing instead of with a simplifying of the article. The start ought to be with the article. First we ought to find whether it is as well made as it should be – does it give the best possible service? Then – are the materials the best or merely the most expensive? Then – can its complexity and weight be cut down? And so on.
Do not scatter energies over collateral objects
Don’t make the marginal the core, nor the core marginal
On Hiring & Training
Men of a more mechanical turn of mind, but with no desire for responsibility, go into the tool–making departments where they receive considerably more pay than in production proper. But the vast majority of men want to stay put. They want to be led. They want to have everything done for them and to have no responsibility. Therefore, in spite of the great mass of men, the difficult is not to discover men to advance, but men who are willing to be advanced.
Whatever expertness in fabrication that has been developed has been due to men. I think that if men are unhampered and they know that they are serving, they will always put all of mind and will into even the most trivial of tasks
Can only learn and accomplish certain things when everyone is all–in
To produce, produce; to get a system that will reduce production to a fine art; to put production on such a basis as will provide means for expansion and the building of still more shops, the production of still more thousands of useful things – that is the real industrial idea. The negation of the industrial idea is the effort to make a profit out of speculation instead of out of work. There are short–sighted men who cannot see that business is bigger than any one man’s interests. Business is a process of give and take, live and let live. It is cooperation among many forces and interests. Whenever you find a man who believes that business is a river whose beneficial flow ought to stop as soon as it reaches him you find a man who thinks he can keep business alive by stopping its circulation. He would produce wealth by this stopping of the produce of wealth
Not only is a title injurious to the wearer, it often has ill effects on others as well. There is perhaps no greater single source of personal dissatisfaction among men than the fact that the title-bearers are not always the real leaders. Everybody acknowledges a real leader – a man who is fit to plan and command. And when you find a real leader who bears a title, you will have to inquire of someone else what his title is. He doesn’t boast about it
People will eventually flow towards talent rather than title. It is injurious when these two don’t align
The health of every organization depends on every member – whatever his place – feeling that everything that happens to come to his notice relating the welfare of the business is his own job. Railroads have gone to the devil under the eyes of the departments that say: “Oh, that doesn’t come under our department. Department X, 100 miles away, has that in charge.”
We do not hire a man’s history, all that he needs is the desire to work
We do not, to repeat, care what a man has been. If he has gone to college he ought to be able to go ahead faster, but he has to start at the bottom and prove his ability. Every man’s future rests solely with himself. There is far too much loose talk about men being unable to obtain recognition. With us every man is fairly certain to get the exact recognition he deserves
The will to be skilled is not general and even if it were, the courage to follow through with the training is not.
Men tend to not like changes that they themselves do not suggest
Against popular opinion, people tend to be fine with change if there is no prospect for loss. People never seem to mind change if it involves a promotion…
I did a thorough investigation into every job at the plant to determine which could be done by the disabled. These bedridden or disabled men were often able to do just as well as the men in the shop and, in fact, their production was about 20%, I believe, above the usual shop production
Suggestions for improvement can come from anywhere
No man is independent as long as he has to depend on another man to help him. It is a reciprocal relation – the boss is the partner of his worker, the worker is partner of his boss. And such being the case, it is useless for one group or the other to assume that it is the one indispensable unit
There is nothing to running a business by custom – to saying: “I pay the going rate of wages.” The same man would not so easily say: “I have nothing better or cheaper to sell than any one has.” No manufacturer in his right mind would contend that buying only the cheapest materials is the way to make certain of manufacturing the best article. Then why do we hear so much talk about the “liquidation of labor” and the benefits that will flow to the country from cutting wages – which means only the cutting of buying power and the curtailing of the home market? What good is industry if it be so unskillfully managed as not to return a living to everyone concerned? No question is more important than that of wages – most of the people in the country live on wages. The scale of their living – the rate of their wages – determines the prosperity of the country
If they see the fruits of hard work in their pay envelope – proof that harder work means higher pay – then also they begin to learn that they are a part of the business, and that its success depends on them and their success depends on it. The business limits the wages, but does anything limit the business The business limits itself by following bad precedents
There will never be a system invented which will do away with the necessity of work. Nature has seen to that. Idle hands and minds were never intended for any one of us. Work is our sanity, our self–respect, our salvation. So far from being a curse, work is the greatest blessing. Each social justice flows only out of honest work. The man who contributes much should take away much. Therefore no element of charity is present in the paying of wages. The kind of workman who gives the business the best that is in him is the best kind of workman a business can have. And he cannot be expected to do this indefinitely without proper recognition of his contribution The man who comes to the day’s job feeling that no matter how much he may give, it will not yield him enough of a return to keep him beyond want, is not in shape to do his day’s work. He is anxious and worried, and it all reacts to the detriment of his work. But if a man feels that his day’s work is not only supplying his basic need, but is also giving him a margin of comfort and enabling him to give his boys and girls their opportunity and his wife some pleasure in life, then his job looks good to him and he is free to give it of his best. This is a good thing for him and a good thing for the business. The man who does not get a certain satisfaction out of his day’s work is losing the best part of his pay. When we are all in this business together, we all ought to have some share in the profits – by way of a good wage, or salary, or added compensation. And that is beginning now quite generally to be recognized.
Such are the fundamental truth of wages. They are partnership distributions
When can a wage be considered adequate? How much of a living is reasonably expected from work? Have you ever considered what a wage ought to do? To say that it should pay the cost of living is to say almost nothing. The cost of living depends largely upon the efficiency of production and transportation; and the efficiency of these is the sum of the efficiencies of the management and the workers. Good work, well managed, ought to result in high wages and low living costs. If we attempt to regulate wages on living costs, we get nowhere. The cost of living is a result and we cannot expect to keep a result constant if we keep altering the factors which produce the result. When we try to regulate wages according to the cost of living, we are imitating a dog chasing his tail. And, anyhow, who is competent to say just what kind of living we shall base the costs on? Let us broaden our view and see what a wage is to the workmen – and what it ought to be.
Employees must have stability, a path to the dream, financial and non–financial recognition as well as a calm, secure, safe environment. Without these core attributes, they will never settle down and be able to focus fully on their job. There will be scarcity in the air and they will hoard their time, abilities, focus and more. There are certain things that can only be accomplished when people are all-in.
Pay enough so a parent can potentially stay at home with their kids if they want. This can have knock on effects of better-raised children who become better contributors which can lead to a better society
If we can distribute high wages, then that money is going to be spent and it will serve to make storekeepers and distributors and manufacturers and workers in other lines more prosperous and their prosperity will be reflected in our sales. Country-wide high wages spell country-wide prosperity, provided, however, the higher wages are paid for higher production. Paying high wages and lowering production is starting down the incline toward dull business
The objection to a plan which pays out yearly profit sharing is that a man did not get his share until long after his work was done and then it came to him almost in the way of a present. It is always unfortunate to have wages tinged with charity
Must respect the goal-gradient effect. Monthly incentive payments rather than yearly so that people are continuously motivated. People will have clear physiological changes when a goal is near and in sight. Marathoners can even begin to sprint at the sight of a finish line!
We wanted to pay these high wages so that the business would be on a lasting foundation. We were not distributing anything – we were building for the future. A low wage business is always insecure
If you expect a man to give his time and energy, fix his wages so that he will have no financial worries. It pays. Our profits after paying good wages and a bonus – which bonus used to run around ten millions a year before we changed the system – show that paying good wages is the most profitable way of doing business.
These kind of policies, though easily classified as “expensive,” don’t cost, but pay.
The people, once paid enough and incented in the right way, make supervision unnecessary
Once the employees become self-policing, you unleash an incredible amount of energy, time, industriousness, ingenuity, creativity that before was spent “managing” people, “politicking” and making sure others were doing their job. Now, you can hardly stop them from working because their self-interest is tied to the success of the company.
Where does the money to make the wheels go round come from? From the consumer, of course. And success in manufacturing is based solely upon an ability to serve that consumer to his liking. He may be served by quality or he may be served by price. He is best served by the highest quality at the lowest price, and any man who can give to the consumer the highest quality at the lowest price is bound to be a leader in business, whatever the kind of article he makes. There is no getting away from this
On Poverty & Privilege
Poverty springs from a number of sources, the more important of which are controllable. So does special privilege. I think it is entirely feasible to abolish both poverty and special privilege – and there can be no question but that their abolition is desirable. Both are unnatural, but it is work, not law, to which we must look for results.
Any plan which starts with the assumption that men are or ought to be equal is unnatural and therefore unworkable. There can be no feasible or desirable process of leveling down. Such a course only promotes poverty by making it universal instead of exceptional
The cure of poverty is not in personal economy but in better production. The “thrift” and “economy” ideas have been overworked. The word “economy” represents a fear. The great and tragic fact of waste is impressed on a mind by some circumstance, usually of a most materialistic kind. There comes a violent reaction against extravagance – the mind catches hold of the idea of “economy.” But it only flies from a greater to a lesser evil; it does not make the full journey from error to truth. Economy is the rule of half-alive minds. There can be no doubt that it is better than waste neither can be any doubt that is not as good as use. People who pride themselves on their economy take it as a virtue. But what is more pitiable than a poor, pinched mind spending the rich days and years clutching a few bits of metal? What can be fine about paring the necessities of life to the very quick? We all know “economical people” who seem to be niggardly even about the amount of air they breathe and the amount of appreciation they will allow themselves to give to anything. They shrivel – body and soul. Economy is waste: it is waste of the juices of life, the sap of living. For there are two kinds of waste – that of the prodigal who throws his substance away in riotous living, and that of the sluggard who allows his substance to rot from non-use. The rigid economizer is in danger of being classed with the sluggard. Extravagance is usually a reaction from suppression of expenditure. Economy is likely to be a reaction from extravagance.
Most men who are laboriously saving a few dollars would do better to invest those few dollars – first in themselves and then in some useful work. Eventually they would have more to save. Young men ought to invest rather than save. They ought to invest in themselves to increase creative value; after they have taken themselves to the peak of usefulness, then will be time enough to think of laying aside, as a fixed policy, a certain substantial share of income. You are not “saving” when you prevent yourself from becoming more productive. You are really taking away from your ultimate capital; you are reducing the value of one of nature’s investments. The principle of use is the true guide. Use is positive, active, life-giving. Use is alive. Use adds to the sum of good.
The difficulty seems to be in getting to look beyond to the causes. More people can be moved to help a poor family than can be moved to give their minds toward the removal of poverty altogether.
I have no patience with professional charity, or with any sort of commercialized humanitarianism. The moment human helpfulness is systematized organized, commercialized and professionalized, the heart of it is extinguished, and it becomes a cold and clammy thing. Professional charity is not only cold but it hurts more than it helps. It degrades the recipients and drugs their self–respect. Worse than this encouragement of childish wistfulness, instead of training for self–reliance and self–sufficiency, was the creation of a feeling of resentment which nearly always overtakes the objects of charity. People often complain of the “ingratitude” of those whom they help. Nothing is more natural. In the first place, precious little of our so-called charity is ever real charity, offered out of a heart full of interest and sympathy. In the second place, no person ever relishes being in a position where he is forced to take favors.
Industry organized for service removes the need for philanthropy. Philanthropy, no matter how noble its motive, does not make for self-reliance. We must have self-reliance. A community is the better for being discontented, for being dissatisfied with what it has. I do not mean the petty, daily, nagging, gnawing sort of discontent, but a broad, courageous sort of discontent which believes that everything which is done can and ought to be eventually done better. Industry organized for service – and the workingman as well as the leader must serve – can pay wages sufficiently large to permit every family to be both self-reliant and self-supporting. A philanthropy that spends its time and money in helping the world to do more for itself is far better than the sort which merely gives and thus encourages idleness. Philanthropy, like everything else, ought to be productive, and I believe that it can be.
In clearing out the need for charity we must keep in mind not only the economic facts of existence, but also that lack of knowledge of these facts encourages fear. Banish fear and we can have self-reliance. Charity is not present where self-reliance dwells. Fear is the offspring of a reliance placed on something outside – on a foreman’s goodwill, perhaps, on a shop’s prosperity, on a market’s steadiness. That is just another way of saying that fear is the portion of the man who acknowledges his career to be in the keeping of earthly circumstances. Fear is the result of the body assuming ascendancy over the soul. The habit of failure is purely mental and is the mother of fear. This habit gets itself fixed on men because they lack vision. They start out to do something that reaches from A to Z. At A they fail, at B they stumble, and at C they meet with what seems to be an insuperable difficulty. They then cry “beaten” and throw the whole task down. They have not even given themselves a chance really to fail; they have not given their vision a chance to be proved or disproved. They have simply let themselves be beaten by the natural difficulties that attend every kind of effort.
There is no security outside of himself. There is no wealth outside of himself. The elimination of fear is the bringing in of security and supply. Let every American become steeled against coddling. Americans ought to resent coddling. It is a drug. Stand up and stand out; let weaklings take charity
On Thomas Edison
No man exceeds Thomas A. Edison in broad vision and understanding. One time I managed to catch him alone for a moment and told him what I was working on. He was immediately interested. He is interested in every search for new knowledge. And then I asked him if he thought that there was a future in the internal combustion engine. He answered something in this fashion: “Yes, there is a big future for any light-weight engine that can develop a high horsepower and be self-contained. No one kind of motive power is ever going to do all the work of the country. We do not know what electricity can do, but I take for granted that it cannot do everything. Keep on with your engine. If you can get what you are after, I can see a great future.” That is characteristic of Edison. He was the central figure in the electrical industry, which was then young and enthusiastic. The rank and file of the electrical men could see nothing ahead but electricity, but their leader could see with crystal clearness that no one power could do all the work of the country. I suppose that is why he was the leader.
Edison believes all things are possible. At the same time he keeps his feet on the ground. He goes forward step by step. He regards “impossible” as a description for that which we have not at the moment the knowledge to achieve. He knows that as we amass knowledge we build the power to overcome the impossible.
Edison is easily the world’s greatest scientist. I am not sure that he is not also the world’s worst business man. He knows almost nothing of business.
On John Burroughs
Poverty springs from a number of sources, the more important of which are controllable. So does special privilege. I think it is entirely feasible to abolish both poverty and special privilege – and there can be no question but that their abolition is desirable. Both are unnatural, but it is work, not law, to which we must look for results.
This was part of John Burroughs’ sanity – he was not afraid to change his views. He was a lover of Nature, not her dupe. In the course of time he came to value and approve modern devices, and though this by itself is an interesting fact, it is not so interesting as the fact that he made this change after he was seventy years old. John Burroughs was never too old to change. He kept growing to the last. The man who is too set to change is already dead. The funeral a mere detail.
If he talked more of one person than another, it was Emerson. Not only did he know Emerson by heart as an author, but he knew him by heart as a spirit. He taught me to know Emerson. He had so saturated himself with Emerson that at one time he thought as he did and even fell into his mode of expression. But afterward he found his own way – which for him was better.
Has moved beyond the ignorance paradox and gained deep fluency but gained mastery once he developed his own style
On Thinking & Education
An able man is a man who can do things, and his ability to do things is dependent on what he has in him. What he has in him depends on what he started with and what he has done to increase and discipline it. An educated man is not one whose memory is trained to carry a few dates in history – he is one who can accomplish things. A man who cannot think is not an educated man, however many college degrees he may have acquired. Thinking is the hardest work any one can do – which is probably the reason why we have so few thinkers. There are two extremes to be avoided: one is the attitude of contempt toward education, the other is the tragic snobbery of assuming that marching through an educational system is a sure cure for ignorance and mediocrity.
The best education can do for a man is to put him in possession of his powers, give him control of the tools with which destiny has endowed him, and teach him how to think. The college renders its best service as an intellectual gymnasium, in which mental muscle is developed and the student strengthened to do what he can. To say, however, that mental gymnastics can be had only in college is not true, as every educator knows. A man’s real education begins after he has left school. True education is gained through the discipline of life
The only reason why every man does not know everything that the human mind has ever learned is that no one has ever yet found it worthwhile to know that much. Men satisfy their minds more by finding out things for themselves than by heaping together the things which somebody else has found out. You can go out and gather knowledge all your life, and with all your gathering you will not catch up even with your own times. You may fill your head with all the “facts” of all the ages, and your head may be just an overloaded fact–box when you get through. The point is this: great piles of knowledge in the head are not the same as mental activity. A man may be very learned and very useless. And then again, a man may be unlearned and very useful
The object of education is not to fill a man’s mind with facts; it is to teach him how to use his mind in thinking. And it often happens that a man can think better if he is not hampered by the knowledge of the past
One good way to hinder progress is to fill a man’s head with all the learning of the past; it makes him feel that because his head is full, there is nothing more to learn Merely gathering knowledge may become the most useless work a man can do. What can you do to help and heal the world? That is the educational test. If a man can hold up his own end, he counts for one. If he can help ten or a hundred or a thousand other men hold up their ends, he counts for more. When a man is master of his own sphere, whatever it may be, he has also won his degree – he has entered the realm of wisdom
What we accumulate by way of useless surplus does us no honor
There are two fools in this world. One is the millionaire who thinks that by hoarding money he can somehow accumulate real power, and the other is the penniless reformer who thinks that if only he can take the money from one class and give it to another, all the world’s ills will be cured. They are both on the wrong track. They might as well try to corner all the checkers or all the dominoes of the world under the delusion that they are thereby cornering great quantities of skill. Some of the most successful money-makers of our times have never added one pennyworth to the wealth of men. Does a card player add to the wealth of the world?
I am not a reformer. I think there is entirely too much attempt at reforming in the world and that we pay too much attention to reformers. We have two kinds of reformers. Both are nuisances. The man who calls himself a reformer wants to smash things. He is the sort of man who would tear up a whole shirt because the collar button did not fit the buttonhole. It would never occur to him to enlarge the buttonhole. This sort of reformer never under any circumstances knows what he is doing. Experience and reform do not go together. A reformer cannot keep his zeal at white heat in the presence of fact. He must discard all facts.
Our only advantage was lack of precedent
We are often too wrapped up in the things we are doing – we are not enough concerned with the reasons why we do them. Our whole competitive system, our whole creative expression all the play of our faculties seem to be centered around material production and its by–products of success and wealth
It is not true that opportunity has been lost in organization. If the young man will liberate himself from these ideas and regard the system as it is, he will find that what he thought was a barrier is really an aid
Our help does not come from Washington but from ourselves
Business and government are necessary as servants, like water and grain; as masters they overturn the natural order
There can be no greater absurdity and no greater disservice to humanity in general than to insist all men are equal. Most certainly all men are not equal and any democratic conception which strives to make men equal is only an effort to block progress. Men cannot be of equal service. The men of larger ability are less numerous than men of smaller ability; it is possible for a mass of the smaller men to pull the larger ones down – but in so doing they pull themselves down. It is the larger men who give the leadership to the community and enable the smaller men to live with less effort.
Lack of knowledge is what is going on and lack of knowledge of what the job really is and the best way of doing it are the reasons why farming is thought not to pay. Nothing could pay the way farming is conducted. The farmer follows luck and his forefathers. He does not know how economically to produce, and he does not know how to market. A manufacturer who knew how neither to produce nor to market would not long stay in business. That the farmer can stay on shows how wonderfully profitable farming can be. The way to attain low priced and high volume production means plenty for everyone – is quite simple. The trouble is that the general tendency is to complicate very simple affairs. Take for instance, an “improvement.” When we talk about improvements we have in mind some change in a product. An “improved” product is one that has been changed. That is. It my idea. I do not believe in starting to make until I have discovered the best possible thing. This, of course, does not mean that a product should never be changed, but I think that it will be found more economical in the end not even to try to produce an article until you have fully satisfied yourself that utility, design, and material are the best. If your researches do not give you that confidence, then keep right on searching until you find confidence. The place to start manufacturing is with the article. The factory, the organization, the selling and the financial plans will shape themselves to the article. You will have a cutting edge on your business chisel and in the end you will save time. Rushing into manufacturing without being certain of the product is the unrecognized cause of many business failures. People seem to think that the big thing is the factory or the store or the financial backing or the management. The big thing is the product, and any hurry in getting into fabrication before designs are completed is just so much wasted time. I spent twelve years before I had a Model T – which is what is known today as the Ford car – that suited me. We did not attempt to go into real production until we had a real product. That product has not been essentially changed. We are constantly experimenting with new ideas. If you travel the roads in the neighborhood of Dearborn you can find all sorts of models of Ford cars. They are experimental cars – they are not new models. I do not believe in letting any good idea get by me, but I will not quickly decide whether an idea is good or bad. If an idea seems good or seems even to have possibilities, I believe in doing whatever is necessary to test out the idea from every angle. But testing out the idea is something very different from making a change in the car. Where most manufacturers find themselves quicker to make a change in the product than in the method of manufacturing – we follow exactly the opposite course. Our big changes have been in methods of manufacturing. They never stand still. I believe there is hardly a single operation in the making of our car that is the same as when we made our first car of the present model. That is why we make them so cheaply. The few changes that have been made in the car have been in the direction of convenience in use or where we found that a change in design might give added strength. The materials in the car change as we learn more and more about materials. Also we do not want to be held up in production or have the expense of production increased by any possible shortage in a particular material, so we have for most parts worked out substitute materials. Vanadium steel, for instance, is our principal steel. With it we can get the greatest strength with the least weight, but it would not be good business to let our whole future depend upon being able to get vanadium steel. We have worked out a substitute. All our steels are special, but for every one of them we have at least one, and sometimes several, fully proved and tested substitutes. And so on through all of our materials and likewise with our parts. In the beginning we made very few of our parts and none of our motors. Now we make all our motors and most of our parts because we find it cheaper to do so. But also we aim to make some of every part so that we cannot be caught in any market emergency or be crippled by some outside manufacturer being unable to fill his orders.
It could almost be written down as a formula that when a man begins to think that he has at last found his method he had better begin a most searching examination of himself to see whether some part of his brain has not gone to sleep. There is a subtle danger in a man thinking that he is “fixed” for life. It indicates that the next jolt of the wheel of progress is going to fling him off. There is also the great fear of being thought a fool. So many men are afraid of being considered fools. I grant that public opinion is a powerful police influence for those who need it. Perhaps it is true that the majority of men need the restraint of public opinion. Public opinion may keep a man better than he would otherwise be – if not better morally, at least better as far as his social desirability is concerned. But it is not a bad thing to be a fool for righteousness’ sake. The best of it is that such fools usually live long enough to prove that they were not fools – or the work they have begun lives long enough to prove they were not foolish.
The temptation to stop and hang on to what one has is quite natural. I can entirely sympathize with the desire to quite a life of activity and retire to a life of ease. I have never felt the urge myself but I can comprehend what it is – although I think that a man who retires ought entirely to get out of business. There is a disposition to retire and retain control. It was, however, no part of my plan to do anything of that sort. I regarded our progress merely as an invitation to do more – as an indication that we had reached a place where we might begin to perform a real service. I had been planning every day through these years toward a universal car. The public had given its reactions to the various models. The cars in service, the racing, and the road tests gave excellent guides as to the changes that ought to be made, and even by 1905 I lacked the material to give strength without weight. I came across that material almost by accident
Nothing is more foolish than for any class to assume that progress is an attack upon it. Progress is only a call made upon it to lend its experience for the general advancement. It is only those who are unwise who will attempt to obstruct progress and thereby become its victims. All of us are here together, all of us must go forward together; it is perfectly sill for any man or class to take umbrage at the stirring of progress. If financiers feel that progress is only the restlessness of the weak–minded persons, if they regard all suggestions of betterment as a personal slap, then they are taking the part which proves more than anything else could their unfitness to continue in their leadership
I have no quarrel with the general attitude of scoffing at new ideas. It is better to be skeptical of all new ideas and to insist upon being shown rather than to rush around in a continuous brainstorm after every new idea. Skepticism, if by that we mean cautiousness, is the balance wheel of civilization. Most of the present acute troubles of the world arise out of taking on new ideas without first carefully investigating to discover if they are good ideas. An idea is not necessarily good because it is old, or necessarily bad because it is new, but if an old idea works, then the weight of the evidence is all in its favor. Ideas are of themselves extraordinarily valuable, but an idea is just an idea. Almost anyone can think up an idea. The thing that counts is developing it into a practical product.
“Out of very hundred new ideas ninety-nine or more will probably be inferior to the traditional responses which they propose to replace. So the conservative who resists change is as valuable as the radical who proposes it—perhaps as much more valuable as roots are more vital than grafts. It is good that new ideas be heard, but it is also good that new ideas be compelled to go through the mill of objection, opposition, and contumely; this is the trial heat which innovations must survive before being allowed to enter the human race. Out of this tension comes a creative tensile strength, a stimulated development, a secret and basic unity and movement of the whole.’’ – Will Durant
Freedom is the right to work a decent length of time and to get a decent living for doing so; to be able to arrange the little personal details of one’s own life. It is the aggregate of these and many other items of freedom which makes up the great idealistic Freedom. The minor forms of Freedom lubricate the everyday life of all of us.
The very young critic is much imbalanced
Nature has vetoed the whole Soviet Republic for it sought to deny nature. It denied above all else the right to fruits of labor.
Our help does not come from others but from ourselves
No two things in nature are exactly alike
Law of diminishing returns begins to operate at the point where strength becomes weight. Weight may be desirable in a steam roller but nowhere else. Strength has nothing to do with weight. The mentality of the man who does things in the world is agile, light, and strong. The most beautiful things in the world are those from which all excess weight has been eliminated. Strength is never just weight – either in men or in things. Whenever anyone suggests to me that I might increase weight or add a part, I took into decreasing weight and eliminating a part! The car that I have designed was lighter than any car that had yet been made. It would have been lighter if I had known how to make it so – later I got the materials to make the lighter car.
I only want to know whether the greatest good is rendered to the greatest number
Any successful system must check human nature; not depend on it
What is desirable and right is never impossible
You can never develop Mexico until you develop the Mexican
A country becomes great when, by the wise development of its resources and the skill of its people, property is widely and fairly distributed
It is the right act sincerely done that counts
Those who shout loudest about democracy I think, as a rule, want it least
What I got out of it
One of my favorite biographies and business books of all time. Extremely clear thinker, does what works rather than what others think is right, never accepted anything as true and questioned everything, sought simplicity in all that he did, was never “done”. He of course had some great flaws such which we should be weary of but we can absorb and incorporate his teachings while recognizing his faults.
Leonardo was the original Renaissance Man, excelling in everything from botany to athletics to engineering and, of course, art. Isaacson took on this project because Leonardo is the epitome of making connections across disciplines which is the basis for creativity, innovation and genius
What set Leonardo apart was not “genius” but extreme observation and curiosity – he ad a passion which was both playful and obsessive.
He was the master of combining art and science. Separating the two is a man-made construct and a false duality
The infinite works of nature are woven together in a unity with marvelous patterns
Leonardo was more human than most people realize and we can learn from his intense curiosity and imagination. His formal education was minimal and most of his abilities were honed by practice rather than being God-given like many people assume. He knew how to marry observation with imagination which made him history’s consummate innovator
Year after year his to-do lists were filled with things he wanted to learn and do as well as people he wanted to meet with. Leonardo’s journal entries are the most impressive compendium of curiosity in history. It shows his curiosity as well as his weirdness. He was gay, flamboyant and his acceptance in Florence at this time was what made Florence great. They allowed people to think and be different. Florence became the greatest cultural and innovative center and creative center in the history of the world as it allowed for mass mixing of different people, skills, cultures, etc. It was unique period of history in that they praised and rewarded those who could master many different fields
Isaacson’s main learning is that deep observation and curiosity of our world leads to a deeper and more meaningful life.
Leonardo questioned everything and was never satisfied with accepted wisdom
Leonardo was fortunate to be born out of wedlock or else he most likely would have ended up as a notary like his father and grandfather. Another benefit was that he was not formally educated, relying instead on observation and experience
By handling the richest people’s money, the Medici’s, without titles or royalty behind their name, became one of the most powerful families in history. Lorenzo and some other prominent figures in the family set up the patron payment system which bred creativity which has rarely been seen before or since
Observing, analyzing, and trying to find better ways to do things became Leonardo‘s method of learning – this preempted the scientific method by several hundred years
Leonardo apprenticed for Verrocchio and learned from him mainly the beauty of geometry. There is harmony in proportions and that is natures brush stroke
One of the many skills that set Leonardo’s art apart with his ability to use light, shade and color to make a two dimensional canvas into a painting which looks three-dimensional. ‘Chiaroscuro’ and ‘sfumato’ were two techniques Leonardo developed to make his art more lifelike and 3D
Reality and scientific observation should inform but not constrain your art
At 24, Leonardo was still living with his mentor and hadn’t produced anything amazing yet and was known for a less than ideal work ethic because he often left projects unfinished. He seemed to enjoy the imagination and conception of an idea more than the execution. However, there was more to it than that, as he was a perfectionist and knew he would learn and observe things in the future which he might want to incorporate or add on in the future. This was seen in several paintings where his autopsies and observation of the human body got him to change his already finished paintings so that they would be more accurate
Leonardo used a technique called ‘pentimento’ which means he used light brushstrokes over and over which created a light, layered and expressive feeling in his paintings and it also allowed him to revise and rework over a period of years and sometimes decades
Leonardo autopsied many bodies in order to observe how the skeleton, muscle and organs were laid out. He believed an artist should draw a figure from the inside out, starting with the skeleton and finishing with the skin and clothes and these observations helped him create some of the most lifelike and moving drawings of all time
Analogy is one of the best ways to appreciate and understand nature. Because of his close observation, Leonardo noticed connections between how the human body (micro) and the earth (macro) worked similarly and how they were connected. The interconnection of nature and the unity of its patterns is a constant theme in his work. He was able to observe similarities between how blood pumped through veins and capillaries, how water made its way through branches in plants, how water flowed from rivers and tributaries. His cross-field, multidisciplinary observations and connections were unlike anything the world had ever seen
Salai was a pupil and lover of Leonardo who he often painted. They fought a lot as Salai tended to steal things and slack off and eventually there seems to have been an estrangement between the two
Obsession seems to be a component of genius. In one entry, Leonardo took thousands of measurements of different subjects and made comparisons and generalizations about the dimensions of a human body. His ultimate goal was the universal measure of man and how he fit into the cosmos
Shadows are the most important part in helping give a three dimensional feel to the painting and that is why Leonardo spent the most time observing thinking and practicing shading. Leonardo observed that there are no definite lines or boundaries in nature so he began blending his paintings (sfumato) which went against the traditional, linear approach common at that time
Leonardo dreamed more of being a great engineer than a painter and though he eventually got a chance to engineer water works and war efforts for Cesare Borgia, he was of course a better painter than engineer
Michelangelo had a great disdain for Leonardo. They were very different – where Leonardo was athletic and well dressed, Michelangelo was disliked, dirty and had a disfigured nose after a fight with a fellow artist. They had a bit of a feud and rivalry which elevated all artists and made the best among them superstars
The greatest anatomical work Leonardo did was on the heart. He recognized patterns due to his multidisciplinary style that others wouldn’t recognize for several hundred more years. His love of fluid dynamics, eddies, branching of veins and more all helped him understand the heart better than anyone else up to that point. Leonardo transferred this to his now famous curls of hair seen in many of his paintings
A mark of a great mind is the willingness to change and drop preconceived notions. Leonardo’s gift was to seek and find patterns, establish frameworks and apply them to various fields. But equally important, he wouldn’t let these patterns blind him
He used drawings, models, sketches and thought experiments to help him think, establish ideas and questions and to find gaps in his knowledge or thinking
Leonardo had an uncanny ability to capture movement
No moment unto itself is self containing. The past is rolled up into the moment and this influences the future
Declaring a work finished stunted it’s evolution and Leonardo did not like that which is why he worked on several projects for years on end and sometimes decades. Don’t get rigid, always be willing to change, learn, grow and improve
What I got out of it
More than anything, I am inspired to simply be more observant and curious about things around me. Why things look the way they do, how they might have come to be, etc. Simple questioning, thinking, observation and synthesis can take you far…
Human relations are often paradoxical and not logical and this book explains why many assumptions about people, relationships and “managing” we make are in fact false. “Paradoxes are seeming absurdities and people logically try to rationalize them but here we are going to try to suppress that in order to better understand real life situations.”
How we think shapes what we see and paradox and absurdity are part of nearly every interaction
It is important to dispel these logical yet false assumptions because when they inevitably fail, managers get frustrated and aren’t well prepared to handle these situations
Managers do things right, leaders do the right things
Absurdity and paradox will be with us as long as humans are around as they arise due to human nature and its flaws
People must know you are a genuine person and not just a “manager.” Vulnerability is sometimes the best way to act
It can be a relief to many to realize you cannot perfectly learn how to deal with others. There is no perfect way. Any technique loses its power once others realize it is a technique. The best people in any field or endeavor leave technique behind and are simply genuine and authentic
Understanding how something works doesn’t mean you can make it work
Praise may not be as effective of a motivator as people think. It may be a status play that managers need to be sensitive to. Better for a manager to be involved and care about the employees’ work. Praise from a third party is often the most effective
The best resource to resolve a problem is sometimes the group who is experiencing or brings up the problem. Deeper fluency with their own problem and can of course see through their own eyes better than others can
The people with the problems often have the best insights into how to fix the problem and if you involve them there will be much greater buy in and adherence
It is amazing how resilient the individual is yet how fragile the organization made up of these individuals can be
Participative approaches are often more effective in getting people involved and generating ideas but this isn’t often employed. Managers may not truly trust their people and the employees may not have the confidence at first to express their opinions
The best way to improve work and output may not be through management but simply by improving relations
Organizations that need the most help often can benefit the least. The mentally healthiest people can often change the most and gain from it. Often the people who need to change least are forced to in order to accommodate others – may not be fair but it sure is effective
People and companies suffer most often because of fraying or lack of relations
Often, the better things are the worse people feel. Revolutions begin not at the trough but only when things slightly improve. The theory of rising expectations. They are discontented because of higher level concerns. This is actually progress though it may not seem like it at first. The highest performing organizations have the highest order grumbles – self actualization. People will never be totally content. The best campuses and countries often have the most restless populace. The most effective reformers are often thrown out by the very people they have been helping – rising expectations take over
Although creativity seems encouraged it really isn’t because truly creative ideas would require tremendous change. Breakthrough changes always breaks the rules. What people seem to really want is manageable creativity. Long term, respected institutions cannot be as creative as newer ones can and that is why true breakthroughs tend to come from individuals, smaller groups or others who are “outside”. Scale is the enemy of creativity
Leadership is less the property of an individual and should be distributed among its members
Often easier to make big changes rather than small ones as the benefits are so much more drastic. In a group that’s working well without titles or other forms of physical status it would be hard to tell apart the leader from the other members
Often people learn better from others’ mistakes than successes as we can better empathize with them
Failure could be one’s best teacher but it really isn’t as people don’t take the time or make the effort to truly analyze them. It is hard to look yourself in the mirror after a failure
Everything works yet nothing works. Almost all management techniques work somewhat but lasting change is almost impossible to implement. Lasting changes only occur when sound practices are implemented on a continual and sustainable basis
Planning is a poor way to asses the future but it can be helpful for assessing the present. The process and not the product is the important part to help with anticipative behavior
The most impactful leaders do not dominate a group but serve it. Humility comes naturally to the best leaders
The best leaders seem to have the confidence to trust their intuition- the accumulation of experience and learnings that they can draw and act upon. These visceral reactions are often ignored but should be paid attention to while looking for objective information
Efforts to fix people usually don’t work and can be counterproductive. The best managers try to fix the situation or environment rather than the person. Circumstances are powerful influences on behavior
The best managers create an ecosystem where their passion is the organizing and motivating force. This makes the tough pursuit worthwhile and draws others into the mission
Love is fundamental to good leadership as leadership is all about caring
Community is one of the most powerful yet fragile parts of an organization. It takes a lot of time and trust to build and can be ruined quite quickly. An insidious part of the erosion of communities is that it is often made in the name of progress and scale
Amateur comes from the Greek word amator which means “love.” An amateur does what he does out of love. A manager needs to work from a place of love
What I got out of it
Often opportunity lies in paradox, misunderstandings or things which seem counterintuitive. This book is filled with those situations and keeping them in mind when dealing with people will be helpful. The rule of reciprocity is always in play. Treat others as you want to be treated. Embody those things which you yourself are looking for. Genuinely having respect will be invisibly and silently communicated to others. Verbal communication is only a small fraction of all communication. The silent, meta message tends to be more powerful than the message itself
An in depth analysis of The Great Atlantic & Pacific – one of the largest and most dominant retail chains of all time which changed how Americans shopped, ate and expected from their retail experience
George and John Hartford were the men who made the Great Atlantic and Pacific Tea Company, later the Great A&P, into the behemoth it became but it was George Gilman who originally founded it. They became so powerful that they were charged with breaking the Sherman Antitrust Act as they had gained such scale and were able to lower the prices of their goods to the point that other, smaller and often independent owners couldn’t complete.
George was very conservative about how to run the business whereas John was more aggressive and open to new ideas. John traveled often, met with the stores and their competitors in order to bring in and act on new ideas.
A&P was the first to successfully and adamantly aim to lower prices as much as possible and to make the profits by volume rather than trying to get the most profit per item.
They were the first to reach $1 billion in sales in the 1920s and in the 1930s they were the first to shift from grocery stores to supermarkets.
They were often the country’s and sometimes the world’s largest importer of many goods and their sales were twice that of the second leading retailer
The size, scale and influence of the A&P was novel and they helped revolutionize food safety, supply chain management techniques and more. They drove many smaller scale grocers and retailers out of business but this also freed up vast amounts of labor to help the economy grow in other areas
George Gilman’s early retail stores were found to be very cheap but quality was low. As they grew, Gilman wanted to portray the image of a great, reliable and quality store to suppliers and customers in order to attract large merchants, espcecially tea, he spread rumors and fabricated shipping statements to appear they were larger than they really were
Gilman, one never to miss a chance to market his company, sought to profit off the new coast to coast railroad. He thus began The Great Atlantic and Pacific Tea Company – it was more of a front however than a legitimate business venture as he was trying to fend off competitors and lure in customers and suppliers. This “front” was destined to become the world’s largest retailer
They went after the growing tea market and startled their competitors by starting their own private label brand name tea – TheaNectar. Shortly after the government passed patent protection laws and their tea was protected, becoming a household brand.
Gilman was a genius marketer. He created beautiful pictures people wanted and this transformed into coupons and later into trading stamps, becoming a marketing staple for the entire industry. This drove customers into the store and to spend more than they otherwise would
After the Great Chicago Fire, Gilman and Hartford sent a lot of food and support to the victims and also bought key land and set up their first store outside New York. When they opened, they had unmeetable demand. The success was so great that they decided to expand aggressively and 4 years later had 16 stores in many cities. They became the first retailer with that kind of broad, national presence and became widely known. Gilman was the marketer and innovator and George Hartford was the managerial genius – yin/yang power combo
The Great A&P became a temple for coffee and tea and were exceedingly lavish in order to appeal to new customer’s increasing focus on status
The Great A&P was very successful but they have one big issue and that they were really reliant on coffee and tea and once prices on these commodities fell, their sales and profit did accordingly. George Hartford reacted in a sensible way and sought to broaden his product line. They started out with other commodities such as sugar but then moved to baking powder which was expensive at the time but made of cheap materials. They took the innovative step and created their first private label baking powder with the A&P brand. This soon became a national, powerhouse brand. The idea of a brand was new at the time and allowed consumers to know they’re getting a consistent and quality product, although for a higher price and allowed retailers to segment the market and eventually reach economies of scale never before reached.
Cardboard boxes, a mistake invention, and the tin can were inventions which allowed retail brands to proliferate. The A&P’s shift from tea company to grocer was underway but two things were constant: lavish use of marketing and premiums
They tapped into the power of women through their coupons. At the time, women had little authority over the family budget except for food and through the collection and use of coupons, they were able to buy items which otherwise their husbands would have resisted
After Gilman died, ownership was split between Gilman’s family and George Hartford. Hartford made his sons George and John officers. John was the most outgoing of the bunch, often traveling and visiting the stores and meeting suppliers, Edward was disinterested and George Jr was the conservative numbers man
Good story working smarter not harder – In 1907 there was a run on the banks and the bank which held the store’s money was rumored to be going out of business. John waited in line overnight but then decided to go to the front of the line, asked the man at the front how much he had with the bank, gave him more money than he was waiting for and took his spot in line. He got all the store’s money out of the bank and the man at the front was happy too
Edward, George senior’s third son, never formally worked for the company but was secretary for some time. He was however very accomplished in his own right, inventing the shock absorber and jacks which became ubiquitous on nearly every car in the world
John exposed himself to new ideas in the industry and helped his more conservative father and brother move forward. The Hartfords were not innovators but what they were great at taking great ideas and understanding how to make them profitable – grocery stores, economy stores, supermarkets, lower price to raise volume…
The competitive advantage for wholesalers was credit, not price
They took advantage of the situation after WWII to buy coffee roasters, canneries and other manufacturing facilities and started to become vertically integrated. They received such scale that they were one of the few to have the size to negotiate cheaper rates with the railroads and their suppliers (which later got them in trouble with Congress for potentially violating the Sherman Anti-Trust Act)
As they grew, they were forced to decentralize and they pushed sales, purchasing and as many other responsibilities down the food chain as possible because those people had firsthand knowledge of the situation. This lead to better decisions and more buy-in from these people since they were getting the chance to grow, take responsibility and make their own decisions
Because of their scale, they were able to get slightly lower prices for nearly all their goods and they eventually gained greater efficiency, influence and customer data than any other firm before them.
The genius of A&P is that they sought to reduce the price and margin on every good in order to increase volume. They did this by reducing costs in never before thought of ways
By the late 1920s, A&P had more stores than the rest of the top 5 largest chains combined
In the mid 1930’s, The Robinson-Patman Act sought to change legislation and break apart large scale retail chains because it hurt so many independent shop owners
The Hartford’s brilliant insight was that too high profits were a warning sign and bad for the long run prospects of the company. They thought that this was a bad indicator because this meant they were charging more than they had to and this would lead to decreased volume as shoppers would go to their stores less, leading to the same fixed cost being spread over fewer customers, forcing them to raise prices again and on in a vicious cycle
One could argue that few organizations have done more to raise the quality of life for the average consumer than A&P. Their obsession with lowering prices and innovating everything from supply chain to pre packaged carrots opened up new products and frontiers for mid America
Once John Hartford died they had a succession plan in place but Mr. Ballinger died as well soon after. So, Ralph Burger who was seen throughout the company more of as an assistant to John then as a leader, got thrown into the leadership position
As shopping centers became more common throughout the US, A&P became too conservative without John and were unwilling to sign long-term leases or own real estate and soon got locked out of the most premier locations. Their conservatism brought disaster as their competitors were adding high margin desirable product lines, had big stores in good locations with fast growing populations while A&P was relying on the legacy of their past. Today’s ship cannot sail with yesterday’s wind
The A&P went public and their secrecy and lack of detailed information made investors and Wall Street nervous. Their decline was incredible as they were unable to innovate and keep up with new trends and customer demands
They were eventually bought by a German company called Tenglemann, not knowing how dire their situation eventually was. After two Chapter 11 bankruptcies, The Great A&P, who was once the largest and most dominant retail chain in the US and maybe the world, officially shut their doors in 2015
What I got out of it
They laid the framework, game plan and precedent for many of today’s largest firms such as Walmart and Amazon. Their two leaders, George and John Hartford, played off each other’s skills of conservatism and innovation/risk taking to create a behemoth. However, once they were no longer in charge, conservatism and inability to adapt took hold and A&P’s dominance was quickly eroded by faster moving, more innovative companies such as Walmart. Through their focus on lower prices and higher volumes, they were able to get more and more nutritious food to the average American, changed the country’s shopping habits and helped innovate the nationwide store, brand, supply chain and everything else that goes with that
Sam Walton recounts his background and Walmart’s path to retail dominance
Sam’s Rules for Building a Business
Commit to your business. Believe in it more than anybody else. I think I overcame every single one of my personal shortcomings by the sheer passion I brought to my work. I don’t know if you’re born with this kind of passion or if you learn it. But I do know you need it. If you love your work, you’ll be out there every day trying to do it the best you possibly can and pretty soon everybody around will catch the passion from you – like a fever
Share your profits with all your associates, and treat them as partners. In turn, they will treat you as a partner and together you will perform beyond your wildest expectations. Behave as a servant leader in a partnership. Encourage your associates to hold a stake in the company. Offer discounted stock, and grant them stock for their retirement. It’s the single best thing we ever did
Motivate your partners. Money and ownership alone aren’t enough. Constantly, day by day, think of new and more interesting ways to motivate and challenge your partners. Set high goals, encourage competition, and then keep score. Make bets with outrageous payoffs. If things get stale, cross-pollinate; have managers switch jobs with one another to stay challenged. Keep everybody guessing as to what your next trick is going to be. Don’t become too predictable
Communicate everything you possibly can to your partners. The more they know, the more they’ll understand. The more they understand, the more they’ll care. Once they care, there’s no stopping them. If you don’t trust our associates to know what’s going on, they’ll know you don’t really consider them partners. Information is power, and the gain you get from empowering your associates more than offsets the risk of informing your competitors
Appreciate everything your associates do for the business A paycheck and a stock option will buy one kind of loyalty. But all of us like to be told how much somebody appreciates what we do for them. We like to hear it often and especially when we have done something we’re really proud of. Nothing else can quite substitute for a few well-chosen, well-timed, sincere words of praise. They’re absolutely free – and worth a fortune
Celebrate your success. Find some humor in your failures. Don’t take yourself too seriously. Loosen up, and everybody around you will loosen up. Have fun. Show enthusiasm – always. When all else fails, put on a costume and sing a silly song. Then make everybody else sing with you. Don’t do a hula on Wall Street. It’s been done. Think up your own stunt. All of this is more important, and more fun, than you think, and it really fools the competition. “Why should we take those cornballs at Walmart seriously?”
Listen to everyone in your company. And figure out ways to get them talking. The folks on the front lines – the ones who actually talk to the customer – are the only ones who really know what’s going on out there. You’d better find out what they know. This really is what total quality is all about. To push responsibility down in your organization, and to force good ideas to bubble up within it, you must listen to what your associates are trying to tell you.
Exceed your customers’ expectations. If you do, they’ll come back over and over. Give them what they want – and a little more. Let them know you appreciate them. Make good on all your mistakes, and don’t make excuses – apologize. Stand behind everything you do. The two most important words I ever wrote were on the first Walmart sign: “satisfaction guaranteed.” They’re still up there, and they have made all the difference
Control your expenses better than your competition. This is where you can always find the competitive advantage. For 25 years running – long before Walmart was known as the nation’s largest retailer – we ranked number one in our industry for the lowest ratio of expenses to sales. You can make a lot of different mistakes and still recover if you run an efficient operation. Or you can be brilliant and still go out of business if you’re too inefficient
Swim upstream. Go the other way. Ignore the conventional wisdom. If everybody else is doing it one way, there’s a good chance you can find your niche by going exactly the opposite direction. But be prepared for a lot of folks to wave you down and tell you you’re headed the wrong way. I guess in all my years, what I heard more often than anything was: a town of less than 50,000 population cannot support a discount store for very long
I can tell you this, though: after a lifetime of swimming upstream, I am convinced that one of the real secrets to Walmart’s phenomenal success has been that very tendency. Many of our best opportunities were created out of necessity. The things that we were forced to learn and do, because we started out underfinanced and undercapitalized in these remote, small communities, contributed mightily to the way we’ve grown as a company. Had we been capitalized, or had we been the offshoot of a large corporation the way I wanted to be, we might not ever have tried the Harrisons or the Rogers or the Springdales and all those other little towns we went into in the early days. It turned out that the first big lesson we learned was that there was much, much more business out there in small-town America than anybody, including me, had ever dreamed of
That method was to saturate a market area by spreading out, then filling in. In the early growth years of discounting, a lot of national companies with distribution systems already in place – Kmart for example – were growing by sticking stores all over the country. Obviously, we couldn’t support anything like that. But while the big guys were leapfrogging from large city to large city, they became so spread out and so involved in real estate and zoning laws and city politics that they left huge pockets of business out there for us. Our growth strategy was born out of necessity, but at least we recognized it as a strategy pretty early on. We figured we had to build our stores so that our distribution centers, or warehouses, could take care of them, but also so those stores could be controlled. We wanted them within reach of our district managers, and of ourselves here in Bentonville so we could get out there and look after them. Each store had to be within a day’s drive of a distribution center. So we could go as far as we could from a warehouse and put in a store. Then we would fill in the map of that territory, state by state, county seat by county seat, until we had saturated that market area
We never planned on actually going into the cities. What we did instead was build our stores in a ring around a city – pretty far out – and wait for the growth to come to us. That strategy worked practically everywhere
There’s no question whatsoever that we could not have done what we did back then if I hadn’t had my airplanes. I bought that first plane for business, to travel between the stores and keep in touch with what was going on. But once we started really rolling out stores, the airplane turned into a great tool for scouting real estate. We were probably 10 years ahead of most other retailers in scouting locations from the air, and we got a lot of great ones that way. From up in the air we could check out traffic flows, see which way cities and towns were growing, and evaluate the location of the competition – if there was any. Then we would develop our real estate strategy for that market. I loved doing all this myself
A key transition point was moving from variety store to discount store
2 cornerstones of Walmart’s philosophy – we sell for less and satisfaction guaranteed The idea was simple: when customers thought of Walmart, they should think of low prices and satisfaction guaranteed. They could be pretty sure they wouldn’t find it cheaper anywhere else, and if they didn’t like it, they could bring it back. No matter what you pay for it, if we get a great deal, pass it on to the customer. And of course that’s what we did
Building this consistent customer trust is vital, think it also applies to Costco and Amazon in certain ways
As much as we love to talk about all the elements that have gone into Walmart’s success – merchandising, distribution, technology, market saturation, real estate strategy – the truth is that none of that is the real secret to our unbelievable prosperity. What has carried this company so far so fast is the relationship that we, the managers, have been able to enjoy with our associates.
We didn’t pay our associates much in the beginning. It wasn’t that I intentionally was heartless. I wanted everybody to do well for themselves. It’s just that in my very early days in the business, I was so doggoned competitive, and so determined to do well, that I was blinded to the most basic truth, really the principle that later became the foundation of Walmart’s success. You see, no matter how you slice it in the retail business payroll is one of the most important parts of overhead, and overhead is one of the most crucial things you have to fight to maintain your profit margin. That was true then and it’s still true today. Back then, though I was so obsessed with turning in a profit of 6% or higher that I ignored some of the basic needs of our people and I feel bad about it. The larger truth that I failed to see turned out to be another of those paradoxes – like the discounters’ principle of the less you charge the more you’ll earn. And here it is: the more you share profits with your associates – whether it’s in salaries or incentives or bonuses or stock discounts – the more profit will accrue to the company. Why? Because the way management treats the associates is exactly how the associates will then treat the customers. And if the associates treat the customers well, the customers will return again and again, and that is where the real profit in this business lies, not in trying to drag strangers into your stores for one-time purchases based on splashy sales or expensive advertising. Satisfied, loyal, repeat customers are at the heart of Walmart’s spectacular profit margins, and those customers are loyal to us because our associates treat them better than salespeople in other stores do. So, in the whole Walmart scheme of things, the most important contact ever made is between the associate in the store and the customer
The idea for sharing profits and benefits had come up even before we went public, not from me, but from Helen. The decision we reached around that time, to commit ourselves to giving the associates more equitable treatment in the company, was without a doubt the single smartest move we ever made at Walmart.
One of the most successful bonuses has been our shrink incentive plan, which demonstrates the partnership principle as well as any I know beyond just straight profit sharing. As you may know, shrinkage, or unaccounted-for inventory loss – theft, in other words – is one of the biggest enemies of profitability in the retail business. So in 1980, we decided the best way to control the problem was to share with the associates any profitability gained by reducing it. If a store holds shrinkage below the company’s goal, every associate in that store gets a bonus that could be as much as $200. This is sort of competitive information, but I can tell you that our shrinkage percentage is about half the industry average. Not only that, it helps our associates feel better about each other, and themselves. Most people don’t enjoy stealing, even the ones who will do it if given the opportunity. So under a plan like this, where you’re directly rewarded for honesty there’s a real incentive to keep from ignoring any customers who might want to walk off with something, or worse, to allow any of your fellow associates to fall into that trap. Everybody working in that store becomes a partner in trying to stop shrinkage, and when they succeed, they – along with the company in which they already hold stock – share in the reward.
Use human nature to work for you – in this case he was able to align incentives to get people all-in and to become self-policing
Keeping so many people motivated to do the best job possible involves a lot of the different programs and approaches we’ve developed at Walmart over the years, but none of them would work at all without one simple thing that puts it all together: appreciation. All of us like praise. So what we try to practice in our company is to look for things to praise. Look for things that are going right. We want to let our folks know when they are doing something outstanding, and let them know they are important to us. You can’t praise something that’s not done well. You can’t be insincere. You have to follow up on things that aren’t done well. There is no substitute for being honest with someone and letting them know they didn’t do a good job. All of us profit from being corrected – if we’re corrected in a positive way. But there’s no better way to keep someone doing things the right way than by letting him or her know how much you appreciate their performance. If you do that one simple thing, human nature will take it from there
What the pupil must learn, if he learns anything, is that the world will do most of the work for you, provided you cooperate with it by identifying how it really works and identifying with those realities. – Joseph Tussman
“When I started working at Walmart in West Texas, we could anticipate a store visit by the chairman with the same sense you get when you’re going to meet a great athlete, or a movie star, or a head of state. But once he comes in the store, that feeling of awe is overcome by a sort of kinship. He is a master of erasing that ‘larger-than-life’ feeling that people have for him. How many heads of state always start the conversation by wanting to know what you think? What’s on your mind?
It is great to be great, but it is even better to be human. – Will Rodgers
Walt Disney also had this capacity to put people at ease – if he wanted to…
And, as I’ve said, we’ve certainly borrowed every good idea we’ve come across. Helen and I picked up several ideas on a trip we took to Korea and Japan in 1975. A lot of the things they do over there are very easy to apply to doing business over here. Culturally, things seem so different – like sitting on the floor eating eels and snails – but people are people, and what motivates one group generally will motivate another
A strong corporate culture with its own unique personality, on top of the profit-sharing partnership we’ve created, gives us a pretty sharp competitive edge. But a culture like ours can create some problems of its own too. The main one that comes to mind is a resistance to change. When folks buy into a way of doing things, and really believe it’s the best way, they develop a tendency to think that’s exactly the way things should always be done. So I’ve made it my own personal mission to ensure that constant change is a vital part of the Walmart culture itself. I’ve forced change – sometimes for changes sake a lone – at every turn in our company’s development. In fact, I think one of the greatest strengths of Walmart’s ingrained culture is its ability to drop everything and turn on a dime…Part of this constant change helps keep people and competitors a little off balance
Small merchants need to avoid coming at us head-on and do their own thing better than we do ours. It doesn’t make sense to try to underprice Walmart on something like toothpaste. That’s not what the customer is looking to a small store for anyway. Most independents are best off, I think, doing what I prided myself on doing for so many years as a storekeeper: getting out on the floor and meeting every one of the customers. Let them know how much you appreciate them, and ring that cash register yourself. That little personal touch is so important for an independent merchant because no matter how hard Walmart tries to duplicate it – and we try awfully hard – we can’t really do it
Like Paul Graham advises, attack incumbents orthogonally. Start small, start cheap, start obscure, start with actions that might not scale, in areas which are looked down upon. You’ll build such a loyal customer base that before your competitors know it, you’re on their heels
I loved it. So many times we overcomplicate this business. You can take computer reports, velocity reports, any kind of reports you want to and go lay out your counters by computer. But if you simply think like a customer, you will do a better job of merchandise presentation and selection than any other way. It’s not always easy. To think like a customer, you have to think about details. Whoever said ‘retail is detail’ is absolutely 100% right. On the other hand it’s simple. If the customers are the bosses, all you have to do is please them.
Distribution and transportation have been so successful at Walmart because senior management views this part of the company as a competitive advantage, not as some afterthought or necessary evil. And they support it with capital investment. A lot of companies don’t want to spend any money on distribution unless they have to. Ours spends because we continually demonstrate that it lowers our costs. This is a very important strategic point in understanding Walmart – Joe Hardin
I would go so far as to say, in fact, that the efficiencies and economies of scale we realize from our distribution system give us one of our greatest competitive advantages
For a long time Sam would show up regularly in the drivers’ break room at 4AM with a bunch of donuts and just sit there for a couple of hours talking to them. He grilled them. What are you seeing at the stores? Have you been to that store lately? How do the people act there? Is it getting better? It makes sense. The drivers see more stores every week than anybody else in this company. And I think what Sam likes about them is that they’re not like a lot of managers. They don’t care who you are. They’ll tell you what they really think.
Being big poses some real dangers. It has ruined many a fine company – including some giant retailers – who started out strong and got bloated or out of touch or were slow to react to the needs of their customers. Here’s the point: the bigger Walmart gets, the more essential it is that we think small. Because that’s exactly how we have become a huge corporation- by not acting like one. Above all, we are small-town merchants, and I can’t tell you how important it is for us to remember – when we puff up our chests and brag about all those huge sales and profits – that they were all made one day at a time, one store at a time, mostly by the hard work, good attitude and teamwork of all those hourly associates and their store managers, as well as by all those folks in the distribution centers.
So we know what we have to do: keep lowering our price, keep improving our service, and keep making things better for the folks who shop in our stores. That is not something we can simply do in some general way. It isn’t something we can command from the executive offices because we want it to happen. We have to do it store by store, department by department, customer by customer, associate by associate
Push responsibility down to those touching the medium – That makes it management’s job to listen to those merchandisers out in the stores. We have these buyers here in Bentonville – 218 of them – and we have to remind them all the time that their real job is to support the merchants in the stores. Otherwise, you have a headquarters-driven system that’s out of touch with the customers of each particular store, and you end up with a bunch of unsold workboots overalls and hunting rifles at the Panama City Beach store, where folks are begging for water guns and fishing rods and pails and shovels; and at the Panama City store in town you’ve got a bunch of unsold beach gear stacked up gathering dust. So when we sit down at our Saturday morning meetings to talk about our business, we like to spend time focusing on a single store, and how that store is doing against a single competitor in that particular market. We talk about what that store is doing right, and we look at what it’s doing wrong
We believe that we have to talk about and examine this company in minute detail. I don’t know any other large retail company – Kmart, Sears, Penney’s – that discusses their sales at the end of the week in any smaller breakdown than by region. We talk about individual stores. Which means that if we’re talking about the store in Dothan Alabama or Harrisburg, Illinois, everybody here is expected to know something about that store – how to measure its performance, whether a 20% increase is good or bad, what the payroll is running, who the competitors are, and how we’re doing. We keep the company’s orientation small by zeroing in on the smallest operating unit we have. No other company does that. – David Glass
If you had to boil down the Walmart system to one single idea it would probably be communication, because it is one of the real keys to our success. We do it in so many ways, from the Saturday morning meeting to the very simple phone call, to our satellite system. The necessity for good communication in a big company like this is so vital it can’t be overstated.
Sam does not consider himself reflective or one to dwell on the past
His passion to compete is what sets him apart
His father was totally honest and the best negotiator he had ever seen – him and the counterparty always parted as friends
Had several hard jobs as a kid during the Great Depression. Like Disney and many others, was a paper boy which taught him the value of a dollar and this became part of the Walmart culture
Supremely competitive with a great bias for action but his best talent was as a motivator.
“Exercising your ego in public is definitely not the way to build an effective organization. One person seeking glory doesn’t accomplish much; at Walmart, everything we’ve done has been the result of people pulling together to meet one common goal – teamwork – something I also picked up at an early age”
Thinking you have the right to win often turns into a self-fulfilling prophecy
Sam was one of the masters of “going positive and going first”
I learned early on that one of the secrets to campus leadership was the simplest thing of all: speak to people coming down the sidewalk before they speak to you. I did that in college. I did it when I carried my papers. I would always look ahead and speak to the person coming toward me. If I knew them, I would call them by name, but even if I didn’t I would still speak to them. Before long, I probably knew more students than anybody in the university, and they recognized me and considered me their friend
“I guess Mr. Walton just had a personality that drew people in. He would yell at you from a block away, you know. He would just yell at everybody he saw, and that’s the reason so many liked him and did business in the store. It was like he brought in business by his being so friendly
Somehow over the years, folks have gotten the impression that Walmart was something I dreamed up out of the blue as a middle-aged man, and it was just this great idea that turned into an overnight success. It’s true that I was forty four when we opened our first Walmart in 1962, but the store was totally an outgrowth of everything we’d been doing since Newport – another case of me being unable to leave well enough alone, another experiment. And like most other overnight successes, it was about twenty years in the making. Of course I needed somebody to run my new store, and I didn’t have much money, so I did something I would do for the rest of my run in the retail business without any shame or embarrassment whatsoever: nose around other people’s stores searching for good talent. One way he lured the best people in, especially early on, was to give away a percentage of the profits
Early goal was to be the best, most profitable variety store in Arkansas within 5 years. That happened
Early lesson: you can learn from anybody, especially competitors
Was always iterating and experimenting – this may be Sam’s most important contribution. “Every crazy thing we tried hadn’t turned out as well as the ice cream machine, of course, but we hadn’t made any mistakes that we couldn’t correct quickly, none so big that they threatened the business
What Walmart realized more clearly than anyone else and what they built around and exploited is that you can lower the mark-up and margin so that the volume makes up for less profit per item
Always sought out competition – “Bentonville was the smallest of the towns we considered, and it already had three variety stores, when one would have been enough. Still, I love competition, and it just struck me as the right place to provide I could do it all over again
Was a keen observer
“As soon as Sam moved the store from Newport to Bentonville, he had a nice big sale, and we put barrels full of stuff all around the floor. Those elderly ladies would come in and bend way down over into those barrels. I’ll never forget this. Sam takes a look, frowns, and says: ‘One thing we gotta do, Charlie. We gotta be real strong in lingerie.’ Times had been hard, and some of those underthings were pretty ragged.” – Charlie Baum
“I remember him saying over and over again: go in and check our competition. Check everyone who is our competition. And don’t look for the bad. Look for the good. If you get one good idea, that’s one more than you went into the store with, and we must try to incorporate it into our company. We’re really not concerned with what they’re doing wrong, we’re concerned with what they’re doing right, and everyone is doing something right.” – Charlie Cate
I guess we had very little capacity for embarrassment back in those days. We paid absolutely no attention whatsoever to the way things were supposed to be done, you know, the way the rules of retail said it had to be done
“Two things about Sam Walton distinguish him from almost everyone else I know. First, he gets up every day bound and determined to improve something. Second, he is less afraid of being wrong than anyone I’ve ever known. And once he sees he’s wrong, he just shakes it off and heads in another direction”
After a tornado tore down a key store – “We just rebuilt it and got back at it.” No feeling sorry for oneself. Just facing what reality hands you and making the most of it
Distribution was an absolute key to Walmart’s success
I guess I’ve stolen – I actually prefer the word “borrowed” – as many ideas from Sol Price as from anybody else in the business. For example, it’s true that Bob Bogle came up with the name Walmart in the airplane that day, but the reason I went for it right away wasn’t that the sign was cheaper. I really liked Sol’s Fed-Mart name so I latched right on to Walmart.
Many of these larger stores were bright stars for a moment, and then they faded. I started thinking about what really brought them down, and why we kept going. It all boils down to not taking care of their customers, not minding their stores, not having folks in their stores with good attitudes, and that was because they never really even tried to take care of their own people. If you want the people in the stores to take care of the customers, you have to make sure you’re taking care of the people in the stores. That’s the most important single ingredient of Walmart’s success
Academy Men vs. NCOs (non-commissioned officers) – the early fellows didn’t want me hiring any college men. They had the idea that college graduates wouldn’t get down and scrub floors and wash windows. The classic training in those days was to put a two-wheeler – you know, a cart that you carry merchandise on – into a guy’s hands within the first thirty minutes he came to work and get him pushing freight out of the back room. They all came out of these variety stores with the same background and the same kind of philosophy and education. And we looked for the action-oriented, do-it-now, go type of folks
I can name you a lot of retailers who were originally merchandise driven, but somehow lost it over the years. In retail, you are either operations driven – where your main thrust is toward reducing expenses and improving efficiency – or you are merchandise driven. The ones that are truly merchandise driven can always work on improving operations. But the ones that are operations driven tend to level off and begin to deteriorate. So Sam’s item promotion mania is a great game and we all have a lot of fun with it, but it is also at the heart of what creates our extraordinary high sales per square foot, which enable us to dominate our competition
Sam was never one to scoff at change if it was correct. He began as a dime store man so at first he wanted to make a certain percentage of profit on everything. But he came around to the idea that a real hot item would really bring customers in the store so we finally started running things like toothpaste for 16 cents a tube. Then we’d have to worry about getting enough of it in stock
Thrived on change and no decision was ever sacred
One thing I never did – which I’m really proud of – was to push any of my kids too hard. I knew I was a fairly overactive fellow and I didn’t expect them to try to be just like me. Also, I let them know they were welcome to come into our business, but that they would have to work as hard as I did – they would have to commit to being merchants.
One reason he fell in love with his wife Helen is that she was always her own woman, forming her own opinions and making her own decisions
I have always had the soul of an operator, somebody who wants to make things work well, then better, then the best they possibly can
Some folks no doubt figured we were a little fly-by-night – you know, in the discount business today but out selling cars or swampland tomorrow. I think that misunderstanding worked to our advantage for a long time, and enabled Walmart to fly under everybody’s radar until we were too far along to catch
Anybody who has ever known anything about me knows I was never in anything for the short haul
I always had great curiosity and would openly ask competitors how they operated and thought about their business. I always questioned everything
I think it must be human nature that when somebody homegrown gets on to something, the folks around them sometimes are the last to recognize it
I guess what’s annoying to executives – to anybody who tries to spend their time managing a company as big as this – is these money managers who’re always churning their investors’ accounts. You know, the stock will go from $40 to $42 and they’ll rush in there and say, “Hey, let’s sell this thing because it’s just too high. It’s an overvalued stock.” Well, to my mind, that doesn’t make much sense. As long as we’re managing our company well, as long as we take care of our people and our customers, keep our eye on those fundamentals, we are going to be successful. Of course, it takes an observing, discerning person to judge those fundamentals for himself. If I were a stockholder of Walmart, or considering becoming one, I’d go into ten Walmart stores and ask the folks working there, “How do you feel? How’s the company treating you?” Their answers would tell me much of what I need to know
The point is, all those analysts may have had perfectly logical theories about why a 20% increase would be a disaster for us. But they failed to see that in a big economic downturn, when everybody is suffering, Walmart’s fundamental strengths would keep us going strong. And we would look great compared to everybody else
What’s really worried me over the years is not our stock price, but that we might someday fail to take care of our customers, or that our managers might fail to motivate and take care of our associates. I was also worried that we might lose the team concept, or fail to keep the family concept viable and realistic and meaningful to our folks as we grow. Those challenges are more real than somebody’s theory that we’re headed down the wrong path
If you asked me am I an organized person, I would have to say flat out no, not at all. Being organized would really slow me down. In fact, it would probably render me helpless I try to keep track of what I’m supposed to do, and where I’m supposed to be, but it’s true I don’t keep much of a schedule. Except for reading my numbers on Saturday morning and going to our regular meetings, I don’t have much of a routine for anything else. I always carry my little tape recorder on trips, to record ideas that come up in my conversations with the associates. I usually have my yellow legal pad with me, with a list of ten or fifteen things we need to be working on as a company. My list drives the executives around here crazy, but it’s probably one of my more important contributions
“When Sam feels a certain way, he is relentless. He will just wear you out. He will bring up an idea, we’ll all discuss it and then decide maybe that it’s not something we should be doing right now – or ever. Fine. Case closed. But as long as he is convinced that it is the right thing, it just keeps coming up – week after week – until finally everybody capitulates and says, well, it’s easier to do it than to keep fighting this fight. I guess it could be called management by wearing down.” – David Glass
One way I’ve managed to keep up with everything on my plate is by coming in to the office really early almost every day. 4:30am wouldn’t be all that unusual a time for me to get started down at the office. The early morning time is tremendously valuable: it’s uninterrupted time when I think and plan and sort things out
“I think one of Sam’s greatest strengths is that he is totally unpredictable. He is always his own person, totally independent in his thinking. As a result, he is not a rubber-stamp manager. He never rubber-stamps anything for anyone”
As famous as Sam is for being a great motivator – and he deserves even more credit than he’s gotten for that – he is equally good at checking on the people he has motivated. You might call his style: management by looking over your shoulder
I’m always asked if there ever came a point, once we got rolling, when I knew what lay ahead. I don’t think that I did. All I knew was that we were rolling and that we were successful. We enjoyed it, and it looked like something we could continue. We had found a concept, certainly, that the customers liked. Even back then, I always said at the first sign of it getting out of control, the first time our numbers don’t come through as they should, we will pull in and put our arms around what we’ve built. Up to this point, of course, we haven’t had to do it
We keep our prices as low as possible by keeping our costs as low as possible
Incumbents of a new model almost always drive out or are acquired by the old guard. What happened was that they (KMart, etc.) didn’t really commit to discounting
I have played to my strengths and relied on others to make up for my weaknesses
Sam and top executives always had and encouraged a ‘bias for action’
Most of us were too busy in the stores to even think about where it was all leading
Have to give people responsibility, trust them and then check on and help them
Sharing information and responsibility is key to any partnership.
Scarcity of any kind leads to “hoarding” where people will not feel secure in their environment and will not be all-in
Submerge your own ambitions and help whoever you can in the company
Everybody likes praise and we look for every chance to heap it on them
The secret to successful retailing is to give your customers what they want
Customers (eventually) vote with their feet
Decision process – On something like the Kuhn’s decision, I try to play a “what-if” game with the numbers – but it’s generally my gut that makes the final decision. If it feels right, I tend to go for it, and if it doesn’t, I back off
Once I decide I’m wrong, I’m ready to move onto something else
I’ve always been a delegator – trying to hire the best people for our stores
Sam’s ‘Beat Yesterday” Ledger book – Sam kept a ledger book to monitor and compare their performance to earlier versions of themselves during the early years of Walmart
Is there a way to transfer this ‘Beat Yesterday’ ledger book to compare current self to younger self? Journal, decision book, mistakes made, what you’ve learned, how you would’ve handled a situation differently?…
We’ve been able to help our associates to a greater degree than most companies because of what you’d have to call enlightened self-interest; we were selfish enough to see in the beginning the value to the company of letting them share the profits
You may have trouble believing it, but every time we’ve tested the old saying, it has paid off for us in spades: the more you give, the more you get.
Win/Lose – the Japanese are right on this point: you can’t create a team spirit when the situation is so one-sided, when management gets so much and workers get so little of the pie
Great ideas come from everywhere if you just listen and look for them. You never know who’s going to have a great idea
One of the most powerful forces in human nature is the resistance to change. To succeed in this world, you have to change all the time
A lot of folks ask if a Walmart-type story still occur in this day and age? My answer is of course it could happen again. Somewhere out there right now there’s someone – probably hundreds of thousands of someones – with good enough ideas to go all the way. It will be done again, over and over, providing that someone wants it badly enough to do what it takes to get there. It’s all a matter of attitude and the capacity to constantly study and question the management of the business
What I got out of it
One of my favorite business books of all time. Absolute focus on the customer, willingness to change, profit sharing with associates, gestures of appreciation, enlightened self-interest, willing to be different, going positive and going first. Will reread immediately
Katz describes the rise and fall of Sears and the men who helped revolutionize it when it was on the brink of disaster
Ed Telling had to work through college to pay for tuition but he did it and ended up marrying the love of his life, Nancy
Ed worked his way up through the Sears organization and quickly became Dead set against the decentralization process where HQ made decisions from afar without knowing the true situation. They knew the map but not the terrain
There is no correlation between time spent on something and it’s productiveness. My most productive meetings are spent roaming the halls
You can’t structure around a problem
Ed got rid of the head of the Midwest and sought to bring someone from outside the company, outside the system, who had fresh eyes and could serve as an agent for change
Moran became de facto head of merchandising and could draw on his deep knowledge of eastern culture to effectively deal with Telling. Telling rarely gave a direct order but hinted and suggested at what he wanted
In the mid 1970s, Sears lost its way due to the sin of arrogance. They were not effectively serving customers and were wholly focused on hitting their quarterly numbers
For some time, the interest rates charged to Sears were 11%, making every sale a loss and forcing them to borrow up to $400m per day
Telling was a very forceful, vocal and harsh boss. He often shifted people around through seeming promotions but in fact was just moving them aside. By the time he realized his harsh and “management by mystery” tactics weren’t working, it was too late. He had alienated too many people and was all alone
Changed certain metrics to get the changes they wanted as it allowed people to “kill sacred cows” and act in previously unacceptable ways due to tradition. By focusing on hours rather than number of salesman, They were able to get rid of underperforming but politically savvy salesmen
Much dispute between the “Sears is one big store” mentality and the “each one is its local community’s store.” Centralization and consistency vs pleasing local tastes
The Sears leadership put a huge focus on efficiency and technology. Their scale meant that every penny or minute saved would lead to millions of dollars and thousands of hours when extrapolated company-wide
Funny recounting of how every level of management put the blame on “them” but one manager eventually found out there is no “they.” They are us. There was no ownership
Telling began thinking of how Sears could begin operating more like a bank as they were already one of the largest financial institutions in the US due to loans and insurance. Focus groups indicated that hundreds of thousands of people may open brokerage accounts if it was associated with a trustworthy brand like Sears. Sears soon acquired Coldwell Banker. The vision was for Sears to become the “chassis for the American consumer’s material life” – becoming central to every purchase and transaction they were making, from hardware to mortgage to securities to credit cards
Don’t “study things to death.” Be action oriented. They decided to spend millions experimenting with new stores and display concepts. They sought to make the most modern one shopping store in the world. No more haggling with dozens of different stores.
Edward Brennan eventually became CEO and where Telling was quick and offered no explanations for how he acted, Brennan was slow, deliberate and methodical.
Purcell believed that every great empire builder tried to tear down what they’ve built before they died or were forced out
The main source of demoralization within Sears was the pace. People cannot endure for long the tenor of revolutionary tasks. People eventually lose the ardor they feel for a cause once the charismatic leader steps away
The company Bill Bass inherited from Brennan was just exhausted. “We’ve just been working them too hard. The people will be able to talk freely with me and know they have the freedom to talk. It’s not really about how hard you work people which is making them exhausted, but the lack of recognition.” Bass had morale whereas Brennan did not, he had a destiny
“Don’t worry,” Brennan said, “no one person can ruin Sears. We’ve all tried, and we’ve all failed.”
What I got out of it
Good summary of Sears’ history, rise, fall and revolution. Older book so doesn’t have the most up to date info but good background
Today you must be your own CEO and take responsibility for your own growth
Success tends to come to those who know themselves – strengths, weaknesses, how you work with others, your values and where you can make the greatest contribution
You must be working from your strengths in order to make your greatest contribution
People are often wrong in what they think their strengths and weaknesses are. Must discover strengths through feedback analysis. Write down what you think will happen in a given situation and revisit 9-12 months later and compare the two. It will clearly show you your strengths and weaknesses and then put yourself in situations where you can focus on and improve your strengths. Recognize where the gaps in your knowledge are and where your intellectual arrogance is causing disabling ignorance and overcome it.
Being bright is not a substitute for knowledge
Ideas do not move mountains. Plans and actions do
Manners are the lubricating oil of organizations
Civility costs nothing and buys everything – Mary Montagu
Important to know whether you and others are readers or listeners
Vital to know how you learn. There is no one right way to learn but must know if you’re a writer, by taking copious notes, by doing, by hearing yourself talk, do I work well with people or am I a loner, are you a leader or do you learn best as a subordinate, do you perform well under stress, with little or much stress, do you like structure from a big organization. Whatever it is, don’t try to change yourself but work on improving your strengths
It is often not very helpful and too often hurtful to try to plan too far ahead
The secret of managing up is knowing how those above you work, learn, what their strengths and weaknesses are, etc.
The secret to effectiveness is understanding the people you work with and depend on, both above and below you, and adapting yourself to their individual styles
False duality of whether you should manage up or manage down. Must do both!
What I got out of it
Some good advice on how to get to know how one thinks, learns, operates and why that is important