Great Managers Rarely Have Great Beginnings | Reading Room
BY BLAINE MCCORMICK
You've dreamed for years about starting your own business. You're ready to say goodbye to that day job at the supermarket and enjoy the freedom, excitement and financial rewards of being your own boss. You've even decided to put a few things on paper and rough out a business plan. Today's the day you've decided to sit down and determine exactly what's necessary to take your first step. "Let's see," you say to yourself, "what stands in the way of me and my own business?"
The first thing that comes to mind is a bit intimidating, but you write it down anyway: You need to finish college. You left college after your freshman year because it just didn't interest you. Now you're regretting it. Also, everything you read suggests that simply a college degree won't be enough. You need an MBA, too. All in all, you've got maybe five or six years of school staring you in the face.
Next, you start thinking about the office space you'll need to buy ... or, OK, rent. You sketch out an office for yourself, a front room for receiving clients, and an office for your secretary. Then there's the new office furniture, computer and phone equipment, and a great sign for the front.
You turn the page and start listing some personal things that you'll need before all this can become a reality. The list includes a reliable car that won't get you laughed at when you pick up a client and a business wardrobe to replace the casual dress you wear in the supermarket. You even start thinking about joining that expensive downtown health club to help build your network.
You lay down your pad and pencil in near frustration. "This is impossible!" you think to yourself. "Any hope I had for going into business ended when I left college. I'm finished...." At this point, you're in dire need of Franklin's first management principle.
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Franklin's First Rule Of Management:
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We've all heard the legend that Franklin rose from obscurity to greatness, but few of us really understand just how obscure and downright miserable Franklin's early life was. Franklin's beginnings were so pathetic that he could have easily chosen to remain undistinguished. Faced with the same circumstances, many individuals would marshal a variety of excuses to explain their poor performance on the job or lack of success in life. Here's a brief list of Franklin's potential grievances.
Excuse 1: The youngest son. Franklin was the youngest son of the youngest son for five generations. In the economic order of the day, the eldest child was usually given control of the family's assets upon the death of the father. The youngest son of the youngest son had little or no assets with which to navigate life.
Further, Franklin notes that it was custom in his family for the eldest son to be trained as a smithor metalworker. Beyond this, it seems as though the remaining children were left without a plan. In fact, Franklin's own father was at such a loss regarding what to do with young Benjamin that he considered giving him as his tithe to his church. (Tithe is an old English word that is translated today as one-tenth.) It was common practice in the Puritan faith to give one-tenth of your income or worldly goods to the church. Josiah Franklin had 10 sons; therefore, he considered giving the youngest, Benjamin, as an offering to the church.
Benjamin Franklin had one thing going for him, however. He had been born in America. For the first time in human history, birth order would not determine an individual's destiny in Colonial America. America was established as a country where all able, motivated individuals could have the opportunity to become something better than what their birth order in a landed aristocracy would have allowed. America would become the first country where the nation's fortunes would not stay in the hands of a few families. Rather, new wealth could be created by almost anyone in almost any place. In his autobiography, Benjamin Franklin literally wrote the book about the self-made American success story.
Excuse 2: Beaten as an indentured servant. A second excuse Franklin could have mustered in self-defense was that he began his working life as little more than a slave. Specifically, he was known as an indentured servant. Franklin writes,
"In 1717 my Brother James return'd from England with a Press & Letters to set up his Business in Boston. I lik'd it much better than that of my Father, but still had a Hankering for the Sea. To prevent the apprehended Effect of such an Inclination, my Father was impatient to have me bound to my Brother. I stood out sometime, but at last was persuaded and signed the Indentures, when I was yet but 12 Years old. I was to serve as an Apprentice till I was 21 Years of Age...."
Franklin's father was afraid his youngest son would run off to sea, which was the Colonial equivalent of running off to join the circus. Therefore, he apparently pressured young Benjamin to become an apprentice to his brother in the printing trade. Once he signed the papers of indenture, Franklin was bound to his brother for almost a decade. The formal name for this relationship was apprentice and master, but in reality the relationship was more like slave and master. The master provided room and board for the apprentice in exchange for the services of the apprentice in running the master's trade. Franklin noted later in his autobiography that he and his brother had numerous and increasingly frequent disputes. Furthermore, the brother disciplined Franklin by beating him.
A few years into his apprenticeship, Franklin seized the opportunity presented by a contractual redesign of his articles of indenture to escape from his brother's oversight. Franklin later felt some remorse for escaping on what was a cross between a legal technicality and a private deal between him and his brother. Nevertheless, the seeds of revolution were planted during Franklin's years as an indentured servant. Fortunately for his fellow citizens, those beatings gave Franklin a lifelong sensitivity to arbitrary power and the use of force to resolve conflicts.
Excuse 3: No formal education. Franklin's education is the focus of the next chapter. So for now, suffice it to say that Franklin was denied many educational resources that we take for granted today. Franklin had only a rudimentary grammar-school education and nothing that comes close to a modern college experience. In fact, Franklin's father deliberately curtailed his education for fear that Franklin would want to continue on to college, an expense his father was either unable or unwilling to support. However, as you will see in the next chapter, Franklin did not let the lack of a formal education impede his forward momentum.
The Surprising Origin Of Other
If you've ever had a vision for your life and then thrown up your hands in frustration, this chapter's for you. Our fictional worker in the opening example has one thing going for him: He wants to improve his life. Franklin had the same desire, and he managed to rise from total obscurity to world acclaim by the end of his life. However, our fictional worker has placed an obstacle in his way that Franklin never did. Franklin finished better than his beginnings, and he demonstrated that you don't have to have a great beginning to have a great finish. Too many people try to construct impossible starting scenarios for entry into a personal business. In doing so, they defeat themselves before they ever get started. This chapter will show that some really great businesses have been started in garages (and worse) and by college dropouts (and worse). The difference is that they just decided to start where they were. Let's take a look at the beginnings of five legendary businesspeople (and one soon-to-be legend) that span the two centuries between Franklin's time and ours.
John D. Rockefeller of the Standard Oil Company: The founder of the greatest fortune ever earned on American soil came from surprisingly modest beginnings. John D. Rockefeller was born in rural western New York in 1839. His parents provided a solid home for the Rockefeller children, of which John was the eldest son. His father worked as a farmer and then engaged in a variety of business interests. Although the family made a comfortable living, they certainly were not considered wealthy.
Rockefeller demonstrated an aptitude for business at a young age. One of his earliest ventures was raising turkeys, then lending the money he accumulated and collecting interest on the accounts. Throughout these early dealings, John D. demonstrated remarkable frugality, hard work and keen foresight.
After graduating from high school in 1855, Rockefeller earnestly sought and gained employment as a bookkeeper and clerk in a Cleveland merchant house. The experience provided him with a strong business foundation. Also, from his earliest days in business, Rockefeller kept track of his financial dealingsrevenues, interest and church tithes-in a small book he called Ledger A. From these simple rural beginnings, Rockefeller went on to build the first great modern corporation, the Standard Oil Company.
Andrew Carnegie of the Carnegie Steel Co.: Unlike both Franklin and Rockefeller, Andrew Carnegie was not born in America. As such, he became one of the greatest immigrant success stories in American history. Carnegie was born in Dunfermline, Scotland, in 1835, the son of a handloom weaver. The introduction of power looms into Scotland forced the family to relocate, and they chose to go across the Atlantic to America. Ultimately the family settled in what is now Pittsburgh, Pennsylvania.
Young Andrew soon found work in a cotton factory, while his father continued to sell his product door to door. Later Carnegie took a job as an office clerk and began attending night classes to learn double-entry bookkeeping. His next job was as a messenger boy for a Pittsburgh telegraph office.
Carnegie used the telegraph job as the springboard to his future success. Mainly through self-discipline and self-education, he rose from messenger boy to telegraph operator and later was a telegraph operator for the Pennsylvania Railroad, the largest and most complex organization of the day. From this point, Carnegie made investments and began building interests in the emerging American steel industry. He went on to become its most dominant figure.
Walt Disney of the Walt Disney Co.: The man most responsible for much of our modern entertainment industry got off to a less than stellar start. Walter Elias Disney was born in Chicago in 1901, but his family quickly moved to a rural farming area. Walt Disney was the fourth son of Elias Disney, an always eager-to-move jack-of-all-trades, and Flora Call, a schoolteacher. His restless father later moved the family to Kansas City and tried earning a living delivering newspapers with his sons.
While in Kansas City, the young Walt learned important lessons in self-discipline from delivering newspapers, rain or shine. He began taking classes at the Kansas City Art Institute and School of Design. Disney eventually landed a job as a newspaper cartoonist, but World War I interrupted his career for a few years.
After returning from the war, Disney produced his first cartoons but was cheated out of them by a crafty film distributor from New York. Down but not out, Disney traveled west to Los Angeles and continued making short animated films in the newly christened film capital. In 1928, Disney and his associates produced a short cartoon with sound starring a cheerful fellow named Mickey Mouse, who had appeared in two earlier "silent" cartoons. The film, "Steamboat Willie," was a sensation, and Disney was on his way. His obscure beginnings and early failures gave few hints of the entertainment greatness of Disney's legacy. In particular, he would leave an indelible mark on full-length animated films, amusement parks and early television.
Mary Kay Ash of Mary Kay Cosmetics: Mary Kay's rags-to-riches story rivals Franklin's in its drama and social significance. Mary Kay's story begins when she got married right out of high school because she couldn't afford college. Her husband was drafted for World War II and left her at home with young children. The military pay wasn't enough to make ends meet, so Mary Kay took a job with Stanley Home Products selling household specialties at home parties. In this job she learned that she had a natural sense for selling.
She remained with Stanley for well over a decade but suffered through a divorce and was left to provide for three children. Ash then moved to Dallas and began work as national training director for World Gifts. After 20 years in corporate America, she concluded that it was a man's world designed for the enjoyment and advancement of men rather than women.
After Mary Kay remarried, she and her second husband decided to begin their own company, one they hoped would be more female-friendly. Unfortunately, he died a month before they could launch it. This divorced, widowed, undercapitalized and under-appreciated grandmother decided to go forward anyway. With the help of her 20-year-old son, Richard, and $5,000 in capital, she launched Mary Kay Cosmetics and began a revolution that changed the role of women in corporate America.
Andrew Grove of Intel: Time magazine's 1997 Man of the Year was born Andras Grof in Budapest, Hungary, in 1936, the son of a Jewish dairyman. When the German tanks rolled into Hungary, he and his family had to go into hiding and remain there for the duration of the war. The end of the war brought little relief to most of the country, and things took a turn for the worse in 1956 when the Soviet Army invaded and established Communist rule.
Following the Soviet invasion, Grove escaped from Hungary and departed for America on a rusty ship designed to transport American troops during the war. His arrival in America was anticlimactic, but he did receive a much-needed hearing aid from the International Rescue Committee, and hearing lost in a childhood illness was restored. Barely able to speak English, Grove obtained a job as a waiter and enrolled in classes at the City College of New York.
Despite his initial difficulties, Grove went on to graduate at the top of his chemical engineering class in 1960. He continued his education at the University of California, Berkeley, and received a Ph.D. in chemical engineering in 1963. Following graduation, he took a job at Fairchild Semiconductor in research and development while continuing to teach at UC Berkeley.
In 1968, Bob Noyce and Gordon Moore started a company called Intel, and Grove was one of their first two employees. Grove went on to become the firm's third CEO, following Intel's two founders in the role. In many ways, Grove's management shepherded Intel through what he later called the "Valley of the Shadow of Death," referring to the world's transition from mainframe computers to personal computers. Despite the turbulent environment, Intel ultimately emerged as one of the dominant firms of the Digital Age.
Michael Dell of Dell Computer: The soon-to-be-legendary Michael Dell started his now-famous computer company in a dorm room at the University of Texas, Austin. As an 18-year-old freshman, Dell began building and upgrading the capabilities of personal computers. When the business boomed, he stopped pretending to be a pre-med major and dropped out of school to continue building his company. Central to Dell's success has been his ability to skirt traditional middlemen in retail environments.
Dell grew up in Houston, the son of an orthodontist and a stockbroker. He showed business acumen early in his life. At 13, he made $2,000 trading stamps on consignment using a rented mailbox. Rather than trade through somebody else's auctions, Dell and a friend set up their own auction and made more money by cutting out the middlemana lesson that was foundational to the Dell Computer company less than a decade later.
As a teenager, Dell learned the benefits of targeting customer segments rather than use more shotgun-style approaches to marketing. He would get a list of marriage license applicants once a week from the Houston courthouse and send personalized letters produced on his Apple Ile inquiring about their interest in subscribing to the Houston Post. He experienced better success than his competitors with this targeted approach, and another seed was planted for the future.
Dell learned his first computer industry lessons by visiting computer retailers. He noticed that when a computer was sold, the retailer kept a sizable chunk of the selling price and sent the rest to the manufacturer. The young Dell surmised that the retailer wasn't adding any value to the sale, especially for sophisticated consumers, and the seed of another idea was planted.
When he started his own computer business, Dell sold the hardware using a direct model almost out of necessity. He serviced rather sophisticated customers he reached through ads in specialized trade magazines. Contact with almost all customers was by telephone. They likely would not have been overly impressed to visit his dormitory-based manufacturing facility.
Dell's direct marketing model and PC business revolutionized the computer industry. He currently ranks in the top 10 richest Americans, according to Forbes. He began with almost no capital and no real strategy other than technological opportunismnot bad for a college dropout. Then again, Benjamin Franklin never had the benefit of college, either.
Prisons Of Our Own Making
It's a commonly believed myth in America that you have to be born great to achieve greatness. Franklin's life and the life of other managers chronicled in this chapter shatter that myth. A myth is ultimately a lie, and a lie is a prison from which we can escape. Franklin's life clearly demonstrates his escape from four kinds of prisons: birth, circumstance, ignorance and error. Let's discuss them in detail and show exactly how Franklin liberated himself.
The prison of birth: Franklin was born a rather ordinary child to rather ordinary parents in a rather ordinary house near a rather ordinary city. There was no inherited wealth that his father, Josiah Franklin, could draw upon to ensure a good life for his children. Further, Franklin was an ocean removed from the most extraordinary places of his day, London and Paris.
Few of us reading this book came into the world with everything we needed to achieve the success we desire. Say hello to a guy who understands: Benjamin Franklin. Rather than stay in the prison of birth, Franklin decided to free himself, and the key he used was hard work. Primarily through hard work and creation of wealth, Franklin achieved a measure of success in his life that could not have been predicted by his humble beginnings. Hard work was the key that unlocked the prison of birth.
The prison of circumstance: We all do time in the prison of circumstance. From time to time, circumstances seem to get the best of us and we find ourselves in situationssometimes of our own makingwhich seem virtually impossible to get out of. Franklin found himself the prisoner of circumstance on several occasions: when he was indentured to his rather abusive older brother and when he fell into the company of loose women as a lusty youth. Fortunately, he was able to free himself with the key of mobility.
When Franklin found a situation too hard to bear, he simply got up and left. It may sound too obvious and somewhat irresponsible, but it produced some remarkable outcomes. When Franklin could no longer bear his brother's beatings, he ran away. When he could no longer resist the temptation of loose women, he ran away. Whenever possible, Franklin later did what he could to make the matter right. For example, he cared for his abusive brother's child when his brother died unexpectedly, and he took as his own son an illegitimate child he fathered during a brief love tryst. Mobility was the key that unlocked the prison of circumstance.
The prison of ignorance: Everybody begins life in the prison of ignorance. We don't know how to speak or walk or dress ourselves. As we grow older, we learn that we don't know how to read or solve algebraic equations or balance a checkbook. Franklin began life in this prison and often found himself locked back inside when he thought he had escaped. His path out of ignorance was through education.
When Franklin needed to expand his knowledge base, he bought or borrowed books. When he needed to learn more about the printing industry, he went to London for a few years to study the art in one of its most important cities. We too can use education to unlock the prison of ignorance. A common temptation is to pretend we aren't ignorant and try to fake our way through. Franklin's humility motivated him to quickly admit his shortcomings and seek to correct them.
Source: Ben Franklin's 12 Rules of Management : The Founding Father of American Business Solves Your Toughest Problems ©2000 by Blaine McCormick Entrepreneur Media Inc. All Rights Reserved. Used by permission.
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