Elias St. Elmo Lewis.

Getting the most out of business; observations of the application of the scientific method to business practice online

. (page 1 of 31)
Online LibraryElias St. Elmo LewisGetting the most out of business; observations of the application of the scientific method to business practice → online text (page 1 of 31)
Font size
QR-code for this ebook

m' m


f (

this is the property

Western Advertising

Return to

Ramsey Oppenheim Publications

564 Market Street
San Francisco, Calif.







Gi.'t U.C. Library




\a^^ .\^'

RamBELj nr':^pheim Cajdc

3 a rr r r' c- - : C ; 3 CZ Q
Telephone fcLi-rter 1172



Getting the Most
OUT OF Business

Observations of the Application of

the Scientific Method to

Business Practice


Vice-President and General Manager, Art Metal Construction Company ; formerly

Advertising- Manager, Burrotighs Adding Machine Companv ; ex-President,

Association National Advertising Managers ; ex-Vice-President, National

Association of Corporation Schools; Member, Atnerican Philosophical

Associatiofi ; The Efficiency Society, Incoiporated ; National

Economic Society ; Author of '■''The Credit Man and His

IVori," ''Creative Salesmanship," ''Financial

Advertising," etc., etc.





Copyright, 1915, by
The Ronald Press Company

Copyright, 1915, by

E. St. Elmo Lewis and

The Ronald Press Company

Wllllulii «. Hewitt PreHa, Urouklyli, Prlute
J. P. T«|.ley Co., New Voik, Ulmlera


To My Friend,

Harrington Emerson,

Engineer, Educator, Philosopher,

Whose Encouragement

Led Me to Make

This Book



I confess I had little thought of writing a book when
the articles* from which this book has grown, first took

My business life has been cast in a twentieth century
mold. As an editor, advertising man, a sales manager and
business executive, I have always been most interested in
the relation of business to the masses. As a manager of
men, whether through direct daily contact, or on the plat-
form, or through the printed word, or in voluntary associa-
tions, I have found certain fundamental principles which,
when skilfully applied, invariably brought the desired result.

These principles are not easily formulated, nor are they
easy of application in the face of wrong practice so old as
to have become petrified in a sacred tradition.

But I have seen staid and pompous bankers brought to
see them — I have seen them reach the White House as
political shibboleths of a party personified — I have seen a
great manufacturer blazon them as a new discovery — I have
seen other manufacturers meet in solemn conclave to discuss
them seriously and wisely — principles and methods which
ten years ago would have been dismissed as piffle.

This state of mind, this philosophy, this "way of looking
at things," which has been called efficiency, for the want of
a better name, is the old, old, but ever new, cold passion of
the scientist for truth, as compared with the careless, pur-
poseless strenuosity of the rule of thumb.

This "way of looking at things" has come to be of great
importance — for even as I write there are two ways-of-
looking-at-things fighting the bloodiest war of all history.

• Appeared in The Caxton during 1913.



The one is thinking as Heinrich von Treitschke, the
German war prophet, taught his people to think, that
Germany is waging a holy war for Germany's right to "a
place in the sun," based on the fundamental that "the state
can do no wrong." Against this is the-way-of-looking-at-
things of the other school which says, ethics bind states as
well as individuals ; that things as they are should be left to
work themselves out in peace.

Without adopting either side as our philosophy, it is
these two "ways of looking at things" which are at war.

So in business, the two schools — one saying, "Learn by
doing and trust in God" ; the other saying, "Learn what is
best, then do it, and God will be on your side."

The issue, as the lawyers would say, is joined there.

The following pages reflect one line of argument for
the oflfence.

I am profoundly conscious of its limitations, both as a
literary performance and a contribution to its chosen sub-
ject. I am rather persuaded to let it go, because I want the
average business man to know something of the things I
have written. I think I know the prejudices and narrow
viewpoint which have so often served to make such men
commercially successful at the expense of social, political,
and economic usefulness, and I know their class contempt
for the man who has never played the game as they have
played it.

I believe, therefore, that the very limitations of crafts-
manship in this book may tend to make for it a more tolerant
audience. This, then, my dear literary critic and wise
reviewer of books, is a plea in confession and avoidance. I
confess this is not a book of any importance to you — but T
avoid the consequences of such defect, by the fact that it
may be read with some profit by mere business men like


The book has not been written so much to reform man-
agement as to suggest a method by which to manage reform.

It does not matter whether the business man Hkes effi-
ciency as a philosophy, nor how little consolation he may
find for his lack of efficiency in the frequent failures of the
efficiency engineer, there is no doubt that the entrance of
the scientific spirit of the engineer into all the administrative
and executive functions of business, has changed the rules
of the business game. Business will never again be the same
comfortable, happy-go-lucky, go-as-you-please occupation it
once was.

This is a new day, and a new philosophy is necessary to
read its riddle.

In a letter written while this book was in preparation,
my friend, Mr. Harrington Emerson, reflects this new spirit
so well that I quote it here, not so much because of its .in-
spiring and suggestive usefulness, but that I may have a
text for all that I have to say in the following pages.

Here is the text :

"Perhaps it is only because of the interest in the work,
but each year the problem seems clearer and more simple.
There is never need of letting loose of former good instru-
ments, like time and motion studies for materials, men, and
machines, but I take a stranglehold further back.

"Recently I have been studying organization. It is
astonishing how little has been written on the subject. We
all know how defective up to date, individual training has
been in spite of generally accepted fundamentals. Therefore
imagine how defective the practical schemes of organization
when the fundamentals of organization are so superficially

"My definition, a tentative one, of organization is — for
a definite purpose, the proper person ready to use with skill,
power, responsibility, and intensity, the proper instruments.


The proper person is the most important of the three. To
what extent, anywhere, at any time, in any department of
human activity is the proper person for a position scien-
tifically, perfectly, and infallibly selected in advance? Such
selections do take place in athletics and for orchestras, but
where else ? That such selections are made in athletics and
in orchestras proves that the thought is not Utopian. Why
should the practice not be universal ?

"We do not play humble puppy as to materials or as to

"When I buy and test belting or steel wire or babbit on
specifications, I am not taking any chances. When the U. S.
Government supervises the manufacture of marine boiler
plate and of anchor chains, it is not taking any chances.
When I specify a Burroughs Adding Machine, I am not
taking any chances. Also, when I specify in advance the
qualities required for a particular position and then find the
person with the qualities, I am not taking any chances.

"Is it possible to predetermine the essential qualities for
positions ? Yes. We can make an elementary beginning by
specifying health, intelligence, honesty, and industry.

"Is it possible by analysis and test to select applicants
with the essential aptitudes? Yes. Health, intelligence,
honesty, and industry are not beyond predetermination.

"If this is possible, organization becomes a definite sci-
ence, as much so as bridge or boiler design and construction.
Give us the right man in the right place as a foundation and
we can joyfully fortify him with ideals, with common sense,
with competent counsel, with discipline, with the fair deal,
with efficiency reward ; we can go ahead with plans, with
schedules, with despatching; we can standardize conditions,
operations and instructions; we can check everything with
reliable, immediate, and adequate records and with any other
principles, methods, or devices that experience warrants.


There is, for instance, the principle, the truth, that as to
personality and materials and equipment, the intrinsic value
increases faster than cost. This is not so of monopolies like
diamonds or Manhattan real estate or pictures of old mas-
ters, or Caruso's voice, but it is true of artificial rubies, of
farm lands, of photographs and moving pictures, and of
phonograph records. Almost without limit the right ma-
terial is cheaper than the wrong material, high speed steel
is actually, comparatively worth over $i,ooo a pound if car-
bon steel is worth 14c. A sewing machine is actually worth
for continuous work $30,000, if needles and thimbles are
worth IOC., and the man who puts successfully "Big Ben"
or the Cash Register or the Burroughs Adding Machine on
market might be cheap at $100,000 a year.

'Tn your own city you have a remarkable man who has
been the pioneer in dropping the price of first-class small
automobiles from $8,000 to $500, who has made millions
for his investors and who now proposes to add $10,000,000
a year extra to the wage fund. As a governmental purchase
such a genius might be cheap at $100,000,000.

"And now one more point. Human beings are influ-
enced by a combination of vital, motive, and mental quali-
ties, powers, ideals. The old Egyptians made the combina-
tion out of soldier, king, and priest. In our modern way we
may define them as soldier, gentleman, and scholar — not so
good as the Egyptian grasp. Every position requires all
of the trinity in special and particular proportions. If you
cannot find them in one individual you must take as many
as may be necessary.

"Just as orange, violet, and green lights when combined
result in pure white, so does the proper combination of the
ideals of the soldier, of the king, and of the priest result in
perfect balance. The soldier grasps the immediate, the king
uses for human enjoyment and satisfaction what has been


achieved, and the priest constantly sets higher ideals for
to-morrow, for next year, for the next generation, for the
next age, for the next eon.

"Without the priest we would still be grubbing maggots,
but only the active vital maggots survived ultimately to
evolve into priests.

"The right man in the right place is no easy job; it is
the biggest problem there is and requires all of everything
that is great for even an approximate success. Eugenics
would not solve it, for mere eugenics does not necessarily
put the race horse on the race track and the cart horse in
the dray.

"By actual test we find that three-quarters of all workers
including executives are badly placed, while only thirty per
cent of applicants are unemployable. The bigger practical
problem is to utilize peat, wood, coal, including blast furnace
gases, rather than to try to use hydrogen exclusively for
fuel. I do not believe there is a useless residuum of over
five per cent, so eugenics and sterilization of the unfit are
not the all-important problems."

I acknowledge my very great obligation to Harrington
Emerson for friendly counsel and encouragement ; to F. W.
Reed, of my staff, for proofreading, criticism, and sugges-
tions ; and to a host of executives, workingmen, and corre-
spondents, who have been the source of whatever is good,
helpful, and suggestive in the following pages. As for the
rest, I commend it to the tender mercies of the professional

E. St, Elmo Lewis

Jamestown, N. Y.
December 3, 19 14


Chapter Part I — Making the Right Start Page

I Thought as a Business Asset 23

Crooked Thinking

The Value of Thought

As a Man Thinketh

The Moral Risk

The Thinker as a Seer

The Changing World Problem

Vocational Adjustment as a Solution

Learning to Think Right

The Vocational Study of Mankind

Standards of Thought Value

Experience as a Guide to Thought

Age as Affecting Thought

II Efficiency and Its AppHcations 32

Efficiency Adjustment

The Efficient Life

Practicality and Dogmatism

A Classification of Mental Types

I— The Rule-of-Thumb Man

2 — The Practical or Systematic Man

3 — The Scientific or Efficient Man
Progress Is Change
Common Sense and Science
Education for Efficiency

III Efficiency and Its Problems 43

"Where Are We At?"

Thought as a World Force

Present Day Problems

Too Much Lawyer-Law

Religious Problems

Tariff Problems

Labor Problems

Problems in Politics

The New Order in the Business World



Chapter Page

IV Efficiency and Its Standards 48

Standards of Business Efficiency

The Basic Principles of Efficiency

A National Business Bureau

The Lucky Theory

The Success Principle

The Gospel of Efficiency

The Cult of the Incompetent

Efficiency Obstacles

Efficiency Standards

The Lack of Efficiency Requirements

The Use of Efficiency Standards

Standardized Efficiency

The Man and the Vision

What Will We Do With It?

Part II — What's the Use?

V Some Business Policies 63

The Book of Rules

The "Let Alone" Policy
The Viewpoint of the Public
The Policy of Publicity
The Study of Mankind
Emotion as an Efficiency Factor

VI Psychology and Common Sense 75

Applied Psychology

Psychology at Work


The Work of Science

Efficient Common Sense

The Selfridge Experiment

VII Efficiency and Common Sense 84

The Missing Link

A Failure of Distribution

Trade-Mark Mistakes

Scientific Common Sense

A Personal Efficiency Test

Vocational Study

The Selection of the Fittest


Chapter Page

The Try and Fail Method of Employment
Efficiency Charts

Part III — The Rules of the Game

VIII Doers and Thinkers 99

An American Error

A Creed of Humility

The Place of the Thinker

The Problem of Business Training

What Is Truth?

The Point of View

Men Who Do Not Make Good

IX The Rule of Thumb io6

The New Industrial Day

The Shadow of the Old Day

"My Business Is Different"

The Essence of Individuality

The Geometrical Increase of Expense

Loss Prevention

The Burden of System

The Conditions of Operative Inefficiency

The Conditions of Operating Efficiency

The Danger of Over-Specialization

X The Rules of Efficiency 113

The Rules of Industrial Efficiency
Some Rules of Accounting Efficiency
Instructing the New Clerk
Establishing Standards
The Twelve Principles of Efficiency
The Scientific Application of Principles
Work for the Thinker and the Doer
Franklin's Personal Efficiency Plan
Working by Schedule
Index to Data Files
Preservation of Ideas
Standardization by Experts
The Letter Killeth

XI The Work of Efficiency 133

What Efficiency Can Do
Efficiency in Selling


Chapter Page

Inefficiency in Advertising
Inefficiency in Management
Inefficiency in the Office
Efficiency in the Individual
Organization Efficiency

Part IV — On the Road to Damascus

XII The New Gospel of Commercial Efficiency 145

The Dawning of the New Era

The New Creed

The Apostle of the New Era

Wanamaker Publicity

The Spirit of Wanamaker Publicity

Philosophy of Wanamaker Publicity

Wanamaker's Scientific Open-Mindedness

The Old Order

The Journey to Damascus

XIII The Gift of Perception 158

Some Who Saw
Sight Limitations
The Power to See
The Hidden Possibilities
Looking Ahead

XIV Seen on the Way 165

An Efficient Type

The Work and the Workers

Education in Efficiency

The Broader Business Education

The Responsibility of the Business Man

Education for Real Life

Theory and Practice

"Made in Germany"

German and American Educational Methods

American Man-Culture

The Corporation School

The Wanamaker School

Improvement Clubs and Special Schools

XV Those Who Lead 178

Why They Are Leaders

The Originality of Adaptation





Taking Down the Blinds

Education That Strengthens

The Basis of Successful Work

Getting the Viewpoint

The Open Mind

"Stop, Look, and Listen"

Part V — Loyalty to the Vision of Things Well Done

XVI The Religion of Loyalty 189

A Message from the Orient

The Spirit of the New Japan

Japanese Loyalty Plus Efficiency

Adaptation as an Efficiency Factor

The World Spirit


The Principles of Bushido

I — Rectitude or Justice

2 — Courage— The Spirit of Daring and Bearing

3 — Benevolence — The Sympathy with Distress

4 — Politeness — The Distinguishing Virtue of the Japanese

5 — Veracity and Sincerity

6 — Honor — The Most Sacred of the Virtues of Bushido

7— The Duty of Loyalty

8 — Education and Training

9 — Self-Control
10 — Suicide and Redress
The Mystery of Mankind

XVII Loyalty to Plan and Purpose 203

The Ultimate Objective

The Motor Power of Success

The True Policy

What Constitutes Loyalty

Imagination as a Success Factor

The Why of Failure

Rules for Success in Retailing

What Jones Thought Over

XVIII Loyalty to Ideals 215

The Point of View
The House Policy
The Spirit of the Rules
What Is a House PoHcy?


Chapter Page

The Wanamaker Store Policy

First— As to the Public

Second — As to the Working People
The Cardinal Points of the Business
The Wanamaker Idea
The Man Motive
Looking Upward
Loyalty to Self
Loyalty to the Vision

Part VI — A Paper of Brass Tacks

XIX The N. C. R. School .' 231

The School Record

The Basal Principle

Origin of the N. C. R. School

The Idea

The Problem

Required Instructions

Some of the Results

Instructors and Methods

XX Standard Practice Instructions 240

Formulas and Precepts
Lodge's Rules of Management
Napoleon as a Civil Administrator
An Administrative Manualization
Manualizing the Salesman's Work
The Salesman

Making the Precept Practice
Standardizing Sales Methods
The "Possible Purchaser"

XXI The Sales Manual 250

Genesis of a Sales Manual

The N. C. R. Manual

Arrangement of the N. C. R. Manual

The Sales Quota

The lOO-Pointers Reward

Managing the Sales Force

The Doctrine of Definite Instructions

The Patterson Way

XXII Extension of the School Plan 260

Net Results of the N. C. R. School





The Curtis School

National Cloak and Suit School

The Larkin School

Applied Psychology of the Victor Talking Machine Company

Globe-Wernicke Doctrine

Investigations That Mislead

Facing the Facts

The Spread of Efficiency

Part VII — Who Says So?

XXIII The One-Man Fallacy

The Walsh Tragedy

Autocratic Rule

The Why of Walsh's Failure

The Marshall Field Way

A Man Who Couldn't Grow

How Others Can Help


The Concrete Case Delusion

The Man Outside

Don't Jump in the Dark

XXIV Rational Business Methods

Think, Then Act

The Purchase of Brains

Interchange of Experience

Mixed Accounts

The Counsel of Perfection

Give the Expert a Chance

The Qualifications of the Expert

The Work of the Expert

Measuring the Expert

Where an Expert Was Needed

Supplanting a Bad System

A Standard Practice Book

Establishing a Schedule

The Side Drift

Beware of Misinformation

XXV Scientific Principles Applied to Business
A Story of Cravats

Science and Business





Chapter Page

The Royal Laboratory

Corporation Research Laboratories

"The Mayor's Eye"

Market Statistics vs. Market Guesses

Follow the Rules

The Men Who Block the Way

Recognition of the Expert

Part VIII — Thinker, Doer & Company

XXVI The Executive Organization 311

The Man Who Got Things Done

Beginning Reform at the Top

Managerial Mistakes

A House Divided

The Planning Department

The Taylor and Emerson Systems of Scientific Management

Efficiency Principles Fixed — Methods Vary

The American Line Idea of Business Organization

The Work and the Man

The Planned Organization

Fatal Economy

Elements of Good Management

XXVII The Line and Staff System 327

Line and Staff Organization

The Staff Idea

Will Cure Two Evils

The Objective Attitude

The House J. P. Morgan Built

Staff versus Committee

Mark Twain on Expert Knowledge

Staff and Committee Co-operation

Application of the Staff Idea

Using the Man Power

Salesman and Selling Methods

The Staff Idea Applied to Salesmanship

Planning a Cereal Campaign

The Staff and the Selling Organization

An Advertising Failure

Scientific Management in the Navy

Scientific Retailing


Chapter Part IX — One Foot Inside the Door Page

XXVIII Individuality 351

The Human Element

Self and Self Sacrifice

The Liberty of Self

The Higher Selfishness

A Standard of Right

Individuality as an Efficiency Principle

The Trinity of Self

What Makes the Master

The Domination of the Master

XXIX The Efficient Individuality 360

Squaring the Round Peg

Wherein the Value of Individuality

The Measure of Self

The Two Tests

The Ambition of Self

The Faith of Works

Efficiency and the Individual

Efficiency Differences

The Individuality of a Business

The Menace of the Egotist

What the "Rank Outsider" Did

What Is Freedom?

Efficiency Well-Directed Energy

"Insist on Yourself; Do Not Imitate"

The Limit of Equality

XXX According to the Rules 373

The Prevalence of Law

The Method of Saint Gaudens

The Individuality and Science

By the Rule

The Supremacy of Law

The Rules of the Road

The Testimony of the Masters

Laws of Efficiency Control

The Test of Efficiency

The Efficient Individualism

Part X — That Letter to Hooker

XXXT The Basis of Discipline 387

The True Discipline


Chapter Page

The Work of Discipline
The Discipline of Lincoln and Lee
The Hooker Letter
Wherein Hooker Was Right
The Basis of Discipline
The Basis of True Authority
The Filene Standard
Criticism vs. Detraction
"Master of Himself"
Master of Others

XXXII Discipline for Growth. 398

The Purpose of Discipline

The Discipline of Indirection

A Book of Management

Noblesse Oblige

Discipline by Indirection in Operation

Discipline by Deflection

The Better Way

The Effective Discipline

Discipline by Counteraction


XXXIII The Essentials of DiscipHne 408

Discipline That Kills

Obstacles to Discipline

The "Shoulder Touch" of Discipline

The Power of Obedience

The Weakness of Deceit

Discipline and Sympathy

The Eye of Discipline

The Discipline of Facts

The Principles of Discipline

Part XI — The End of the Rainbow

XXXIV The Basis of Wages 417

Making Men

The Hope of Reward

The University of Hard Knocks

Wages and Justice

Efficiency and the Golden Rule

Education and Business

The Open Mind


Chapter Page

The Southern Pacific System
The Game and Its Rules
The Economy of High Wages
Who Pays Labor's Bills?
Prices Rise with Wages
The Broader Creed
The Gold in the Pot
The Ends of Efficiency
Efficiency and the Worker

XXXV The Wage Plan 432

The Wage Problem

Wage Systems

First — A Fixed Salary

Second — Salary and a Bonus

Third — Profit Sharing
The Old Way
The Proposed Solution
The Ford Investigation
A Permanent Force
How the System Works

Provident Plan of the American Telephone and Telegraph
Compensation by Commissions
The Study of Records
Experience as a Wage Guide
Piece-Work and Fair Play
The Bonus for Brains
The Suggestion System
Requirements of the Suggestion System

Part XII — Ich Dien

XXXVI Educated Democracy. 455

The Filene Co-operative Association

What the Filene Co-operative Association Has Done

The F. C. A. Arbitration Board

What the F. C. A. Stands For

Democracy Steadfast

XXXVII The Law of Service 461

What of the Thinkers and Doers?
Education as a Remedial Agent
The Moral Law of Service
Good-Will a Product of Service


Chapter Page

The Value of Good-Will
The Purpose of Co-operation
The Ideal of Service
Democracy Is Not Equality
The Golden Rule of Efficiency

Online LibraryElias St. Elmo LewisGetting the most out of business; observations of the application of the scientific method to business practice → online text (page 1 of 31)