This is a guest post by Salvador Briggman
I feel like Andrew Carnegie is one of those names in our culture that everyone knows and reveres. I imagine if you asked someone on the street what they knew about Andrew Carnegie, you’d get a lot of people saying he was a rich, powerful, and maybe a ruthless businessman. Some people might know that he was involved with the birth of America’s steel industry and a few more might guess he lived around the early 1900s. But, despite the fact that I, like so many Americans, have always recognized his name, he’s always seemed like a very abstract figure, in the same way that many famous actors, businessmen, and fashion icons are sensationalized by the media to the point that they become one dimensional demigods. You come to knew very specific things about them, mainly related to their distinguished achievements, and could never imagine sitting across the table from them in a cafe, or seeing them grocery shopping like the rest of us humans. Out of the desire to truly understand the man who went from rags to riches, I ordered this autobiography on my kindle and started reading.
“I did not understand steam machinery, but I tried to understand that much more complicated piece of mechanism—man.” – Andrew Carnegie
I have always loved reading biographies and autobiographies for the simple reason that not only do they present a beautiful portrait of a great man, but they also give an interesting look into a period of history. To me, history in itself is quite boring, but reading about history through the eyes of someone I admire is fascinating. For those looking to learn more about Lincoln, the civil war, politics during the late 19th/early 20th century, and the rise of America’s industrial empire (especially in communications and transportation), I would recommend reading Carnegie’s biography. More specifically, for those interested in business, this book gives extremely valuable advice on how to succeed while maintaining honesty and dignity. If I ever achieve my dream to become half the businessman that Carnegie was, I will surely attribute part of it to the lessons I learned while reading this book.
“Here was another friendship formed with people who had all the advantages of the higher education.” – Andrew Carnegie
If there is one predominate theme in this book that leads to Andrew Carnegie’s success, it is the combination of hard work with the implementation of many of the people-handling techniques that Dale Carnegie described in his 1936 bestseller, “How to Win Friends and Influence People.” It is through Carnegie’s business friendships that he was able to make his initial investments and able to build his enterprises. The ability to know a lot of people and identify what they are good at is extremely helpful when an opportunity comes along. As Carnegie says, it’s very difficult to succeed on your own.
By using the talents of other people (in a mutually beneficial arrangement), you can engage in business opportunities that you would not be able to otherwise (as in the above quote, Carnegie admits he knew very little about the technical process of steam machinery). As a hopeful future entrepreneur, I have always had the problem of feeling like I need to know how to do every job in a business in order to start it. Starting a company in an industry in which I have no technical experience would be very intimidating to me. Carnegie’s life seems to illustrate the lesson that one of the top abilities of a successful entrepreneur is identifying what they need to know about a business and what they don’t need to know. Richard Branson also seems to support this lesson, famously not knowing the different between net and gross sales and having no foundation in accounting what so ever (also stating that he didn’t know much about airlines before starting Virgin Atlantic, but that he surrounded himself with many people who did).
“There is no way of making a business successful that can vie with the policy of promoting those who render exceptional service.” – Andrew Carnegie
“There have been many incidents in my business life proving that labor troubles are not solely founded upon wages. I believe the best preventive of quarrels to be recognition of, and sincere interest in, the men, satisfying them that you really care for them and that you rejoice in their success.” – Andrew Carnegie
In addition to leveraging business friendships to promote partnerships, Carnegie was also very deliberate in his relationships with his employees. Many of the strikes that occurred were placated through sessions of listening to and understanding worker complaints. Carnegie was famous for personally knowing his employees and rewarding those who performed well. This book has hammered the fact into my brain that no matter how you look at it, business is people, be it customers, partners, or employees, and that the best way to succeed is to learn how to “handle” people (not in a sinister way, but in a practical way…how to motivate/persuade/understand and especially how to identify what is driving people).
It seems strange to me that all throughout school I have been made to believe that strong knowledge in the areas of math and science ensure success, that the “softer sciences” are not to be taken seriously, and that they will ultimately lead to a lower pay. This complete, pardon my french, bullshit. Whether it is your aim to earn a living as an employee or an owner, it’s mastery of the softer sciences that has the highest correlation with success (not saying hard sciences aren’t important! Just that soft sciences are underrated).
As I said, the other component of Carnegie’s success was hard work. What does that actually mean? I think it means complete dedication to your project. In business, it would mean ensuring that your product or service is excellent, that your customers are satisfied, that your employees are happy and productive, that you are dealing with your competition, and that you are continually expanding and exploiting opportunities. I think you will know that you are doing good work when you are PROUD of your work. In Carnegie’s words… (sorry for the long quote)
“This policy is the true secret of success. Uphill work it will be for a few years until your work is proven, but after that it is smooth sailing. Instead of objecting to inspectors they should be welcomed by all manufacturing establishments. A high standard of excellence is easily maintained, and men are educated in the effort to reach excellence. I have never known a concern to make a decided success that did not do good, honest work, and even in these days of the fiercest competition, when everything would seem to be matter of price, there lies still at the root of great business success the very much more important factor of quality. The effect of attention to quality, upon every man in the service, from the president of the concern down to the humblest laborer, cannot be overestimated. And bearing on the same question, clean, fine workshops and tools, well-kept yards and surroundings are of much greater importance than is usually supposed…We were as proud of our bridges as Carlyle was of the bridge his father built across the Annan.”
As most people know, Carnegie is famous for his saying that instead of keeping your eggs in different baskets (diversify), that one should put all their eggs in one basket and WATCH THAT BASKET.
“I believe the true road to preëminent success in any line is to make yourself master in that line. I have no faith in the policy of scattering one’s resources, and in my experience I have rarely if ever met a man who achieved preëminence in money-making—certainly never one in manufacturing—who was interested in many concerns. The men who have succeeded are men who have chosen one line and stuck to it.”
“My advice to young men would be not only to concentrate their whole time and attention on the one business in life in which they engage, but to put every dollar of their capital into it.”
And so, this is why I believe hard work in business is about complete focus, growth and development, and quality control.
There are two more things I’d like to point out. One has to do with salary and the other has to do with leverage/speculation. When I was little, I always thought that you got rich by being paid a lot. I thought of doctors, lawyers, and investment bankers. In the last three years, my view has been changed. I now believe that you acquire true wealth through business ownership and investing. These thoughts have been echoed by Felix Dennis, the author of “How to Get Rich” and Robert Kiyosaki, the author of “Rich Dad Poor Dad.” You don’t really know when you first hear ideas whether or not they are true, but after having read multiple books on business, including this autobiography, this idea has been confirmed. Let me illustrate it in a quote.
“I was determined to make a fortune and I saw no means of doing this honestly at any salary the railroad company could afford to give, and I would not do it by indirection. When I lay down at night I was going to get a verdict of approval from the highest of all tribunals, the judge within….Thenceforth I never worked for a salary. A man must necessarily occupy a narrow field who is at the beck and call of others. Even if he becomes president of a great corporation he is hardly his own master, unless he holds control of the stock. The ablest presidents are hampered by boards of directors and shareholders, who can know but little of the business. But I am glad to say that among my best friends to-day are those with whom I labored in the service of the Pennsylvania Railroad Company.”
My last long winded word on this book is about leverage and speculation. Warren Buffet is famous for saying about leverage that if you’re smart, you don’t need it and that if you’re dumb, you have no business using it. In the same way that Buffet views investing as a business decision and not a speculative task so notorious on wallstreet, Carnegie managed to succeed by staying away from potential investments that could ruin him. In short, it was his ability to manage risk.
“I am sure that any competent judge would be surprised to find how little I ever risked for myself or my partners. When I did big things, some large corporation like the Pennsylvania Railroad Company was behind me and the responsible party.”
“I have adhered to the rule never to purchase what I did not pay for, and never to sell what I did not own.”
“Offers were made to me by persons who were willing to furnish capital for investment and allow me to manage it—the supposition being that from the inside view which I was enabled to obtain I could invest for them successfully. Invitations were extended to me to join parties who intended quietly to buy up the control of certain properties. In fact the whole speculative field was laid out before me in its most seductive guise. All these allurements I declined.”
“His mind must be kept calm and free if he is to decide wisely the problems which are continually coming before him. Nothing tells in the long run like good judgment, and no sound judgment can remain with the man whose mind is disturbed by the mercurial changes of the Stock Exchange. It places him under an influence akin to intoxication. What is not, he sees, and what he sees, is not. He cannot judge of relative values or get the true perspective of things. The molehill seems to him a mountain and the mountain a molehill, and he jumps at conclusions which he should arrive at by reason. His mind is upon the stock quotations and not upon the points that require calm thought. Speculation is a parasite feeding upon values, creating none.”
There is much more wisdom and value to be found in this book, but, alas, I think I would end up re-quoting the book if I were to attempt to capture it all. These are the main points I have withdrawn from the book and I strongly urge all hopeful entrepreneurs to read it. I admit, I read about 1/2 of the book with complete focus and kind of skimmed the last 1/2 (it’s more about philanthropy). I’d like to finish with a quote that gives an idea of the type of man behind what has become one of the most known and revered names in US history, on the levels of Rockefeller and Gates.
“The heroes of the barbarian past wounded or killed their fellows; the heroes of our civilized day serve or save theirs. Such the difference between physical and moral courage, between barbarism and civilization. Those who belong to the first class are soon to pass away, for we are finally to regard men who slay each other as we now do cannibals who eat each other; but those in the latter class will not die as long as man exists upon the earth, for such heroism as they display is god-like.”
If you don’t want to buy this book, you can find it online here.
