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without Tim Murphy than with him, for he spoiled a good deal of his work,
took up a great deal of his foreman's time which ought to have been
applied in other directions, broke and ruined a number of valuable tools
and otherwise manifested those symptoms which so often mark the entrance
into an organization of a man propelled by pull rather than push.

The trouble in Tim Murphy's corner continued to halt and disorganize the
work in the department so that there were still further delays and losses
up and down the line. All this was bad enough, but by the end of five
weeks of Murphy's attachment to the payroll he had demonstrated that he
was not only incapable, indolent, careless, and unreliable, but that he
was a disorganizer, a gossip, and a trouble maker.


Finally the superintendent, who in some mysterious way had managed to
escape the entanglement of underground wires running from Terrence
Mulvaney's saloon, issued a direct, positive order to Foreman Lathrop, and
Murphy's place in that factory knew him no more. Nor was Murphy
astonished or disappointed. He had been expecting this very thing to
happen, and was prepared for it. So when he walked out, two skilful, but
easily influenced companions, walked out with him. Thus Joe Lathrop had,
added to one of his frequent early morning headaches, the serious trouble
of trying to find three men to fill yawning vacancies. The company was
faced with a new series of losses even greater than those which had
followed the discharge of Robinson. Furthermore, there was trouble and
disorganization among the men still remaining in the department. Every man
there had liked and respected the competent young worker, Robinson. They
all knew that he had been discharged largely because Joe Lathrop was
jealous and somewhat afraid of him, and because Joe had had a bad headache
and grouch. They resented the injustice. Their respect for their foreman
dropped several degrees. Their interest in their work slackened. "What is
the use," they thought, "to do our best when superior workmanship might
get us thrown out of here instead of promoted?"

And so Joe Lathrop's series of "li'l' drinks" finally resulted in
decreasing the efficiency of his department to such an extent that the
superintendent was obliged to discharge him. Then the superintendent was
in for it. He had to find a new man. He had to take the time and the
trouble to break the new man in, and the company had to share the losses
resulting from disorganization until the new foreman was installed.

This is not a fanciful story, but was told to us by a man who knew the
superintendent, Joe Lathrop, Robinson, Terrence Mulvaney, and Tim Murphy.
Nor is it an unusual story. Just such headaches, discharges, troubles, and
losses are occurring every day in the industrial and commercial
institutions of this country.

This story illustrates not only the high cost of constant change in
personnel, but also the high cost of leaving the important matter of
hiring and firing to foremen. Where this is done, discharges without
cause, the selection of incompetents, grafting on the payroll, inside and
outside politics, the indolent retention on the payroll of those who are
unfit, and many other abuses too numerous to mention, are bound to follow.


There is only one legitimate reason for putting any man or woman on the
payroll, namely, that he or she is well fitted to perform the tasks
assigned, will perform them contentedly and happily and, therefore, be a
valuable asset to the concern. But with foremen, superintendents, and
other minor executives selecting employees, for any reason and every
reason except the legitimate reason, it is small wonder that employees
grow discontented and leave, are demoralized and incompetent so that they
are discharged. For these reasons it is an unusual organization which does
not turn over its entire working force every year. The average of the
concerns we have investigated shows much more frequent turnover than this.

Under these circumstances, it should be easy to understand why our
efficiency engineers and scientific management experts find the average
organization only 25 per cent efficient. And this is not the only trouble
we make for ourselves as the result of unscientific selection in the rank
and file. In many cases we use no better judgment in the selection of even
our highest and most responsible executives. If it is true, as has been so
often stated, that a good general creates a good army and leads it to
victory, and a poor general demoralizes and leads to defeat the finest and
bravest army, then it is more disastrous for you to select one misfit
executive than a thousand misfits for your rank and file.

In our next chapter we shall attempt to show some of the troubles which
overtake a man who selects the wrong kind of executives.



The President and General Manager of a large manufacturing and sales
company, who, for the purpose of the present narrative, shall be called
Jessup, was making a trip from Chicago to New York on the Twentieth
Century Limited. In the smoking room of his car he met a gentleman whose
appearance and manner attracted him greatly. Acquaintanceship was a matter
of course, mutual admiration followed swift upon its heels, and friendship
soon began to crystallize in the association. As the train sped on through
the night, the Big Executive became more and more delighted with his
new-found acquaintance. The man agreed with him in many of his sentiments;
belonged to the same political party; was a member of the same fraternal
order; wore the same Greek letter society pin as his oldest son; and, what
was, perhaps, more important, entertained what seemed to him intelligent,
clean-cut, forceful, progressive ideas in regard to business.

As their talk proceeded, President Jessup found that the gentleman was a
Mr. Lynch, advertising manager of a firm manufacturing jewelry, located in
Providence, Rhode Island. He had been in this position for five years and
during that time had planned, assisted in designing, and sold to a
national market several profitable jewelry specialties. Lynch's graphic
story of how these advertising campaigns had been planned, executed, and
carried through to success fascinated the President of the western
concern. To his mind, his own enterprise, the manufacture and sale of
steam and hot-water heating plants, had long been in the doldrums. He
himself had spent many sleepless nights trying to plan some way of
extending its business; of opening up new markets; of creating a wide new
patronage; of manufacturing something which would bring in more profits
than their regular line, and finding a successful sale for it. It now
seemed to him that he had found just the man to assist him in carrying out
these vaguely formed plans, which as yet were little more than dreams. He
told Lynch something of his ideas and ideals, and, as the two men parted
for the night, he said:

"I have just a glimmering of an idea, Mr. Lynch, that we might be able to
make an arrangement whereby you would be greatly profited in increased
opportunities and bigger income, and perhaps we also would reap an
advantage in increased business. Think it over."


Long after he had retired, President Jessup pondered over the situation,
and the more he pondered, the more he became convinced that he had found
just the man he wanted. True, he had not had in mind, during any of his
midnight vigils, the taking on of any new help - his payroll was already
heavy enough. He had a good advertising manager and a good sales manager,
men who were competent to take care of the business of the concern. In
response to their efforts, patronage was growing, not rapidly and
spectacularly, yet steadily and substantially. Now, however, he saw an
opportunity to produce something which would be different enough from the
product of any of his competitors to warrant him in undertaking a national
advertising campaign. Up to the present he had had only a local business.
A few hundred miles from his factory in all directions could be found all
the heating plants which he had manufactured and sold. His dream was to
produce some special form of apparatus which would sell wherever there
were homes, stores, offices, churches, theaters, and schools to be warmed.
Mr. Lynch was just the man to study their business carefully, decide upon
some such product, help to design it, and plan and execute the national
advertising campaign which would develop a local into a national business.
Jessup dropped to sleep with his mind made up.

Next morning, as the train sped along between the Catskills and the
Hudson, the two men, over the breakfast table, began negotiations. Jessup
was surprised, and somewhat disappointed to find what a large salary his
new friend was drawing in Providence. He was still more surprised and
disappointed to find that Lynch's future prospects in the jewelry business
were so bright that it would take a considerably larger salary to entice
him away. The Westerner's mind, however, was made up and the future
profits he saw arising from a national business were so attractive that he
finally threw aside caution and offered Lynch twelve thousand five hundred
dollars a year and moving expenses to the western city where his factory
was located. This offer was finally accepted, the two men shook hands, and
arrangements were made for Lynch to report for duty in the West within
thirty days.


Now, President Jessup had no intention of dismissing his advertising
manager and his sales manager. Each knew the business from beginning to
end; each was thoroughly familiar with the trade already built up and
personally acquainted with many dealers who handled the products, and
could be depended upon not only to hold the present trade, but to increase
it. Therefore it seemed good judgment to retain these two men on the local
trade while turning Lynch loose upon the campaign for the securing of a
national market. So it was decided to retain both of the old men and to
give the newcomer the title of sales promotion manager. There were some
heart-burnings on the part of those already in the office when the new man
came in and took charge. It was not pleasant for men who had been with the
business for years and served it faithfully and helped to build it up, to
have a man placed over them who knew nothing about it and whose salary was
more than their two salaries combined. However, Lynch's personality was so
pleasant and he was so tactful and agreeable that this little feeling of
inharmony seemed soon to disappear. Presently all were working together in
the happiest possible way toward the inauguration of the new policy of the

As time went on, however, Lynch began to show signs of restlessness and
uneasiness. Being a man of keen, alert mind and quick intelligence, he had
quickly grasped the fundamentals of the heating business. He was soon able
to talk with the firm's designers and engineers in their own language. But
the more he studied boilers and radiators, the less interest he took in
them. He had sense enough to know that the only thing that would win in
the plan he had in mind was a radical change in design which would
increase the amount of heat delivered in proportion to the amount of fuel
burned, or the amount of heat delivered in proportion to the cost of fuel
burned, or would reduce the amount of supervision required, or would do
away with some of the long-standing sources of trouble and annoyance in
heating apparatus. Long and hard he thought and conjectured, and studied
statistics, and followed reports of experiments, but for the life of him
he could not take any interest in any such line of research. He hated the
gases, ashes, soot, smoke, and dirt generally. Huge rough castings of
steel and iron seemed gross and ugly to him, and the completed product
seemed coarse and unfinished. The only improvements he could think of were
improvements in beauty of line, in refinement of the design, in added
ornamentation, and other enhancements of the physical appearance of the
product. In these he took some interest, but he had the good sense to know
that no change of this kind would accomplish what they wished in the
matter of going after a national market.


For a while President Jessup waited patiently; then, as the big salary
checks came to him to be signed month after month, he began to grow
restless. No result had yet been announced and in his conferences with
Lynch, he could not determine that any hopeful progress was being made.
Finally, in desperation, he called his engineers and designers together.
For three weeks he worked with them night and day, studying, analyzing,
making records, and computing results. They took cat-naps on benches in
the laboratory while waiting for fires to burn a standard number of hours;
ate out of lunch-boxes; and finally, unshaven and covered with soot and
ashes, they triumphantly produced a fire-box and boiler which would burn
the cheapest kind of coal screenings satisfactorily, with but little
supervision and a high degree of efficiency. This was the best thing they
had ever done in the laboratory. This was the attainment which he had so
long desired. This, properly advertised and handled, certainly ought to
revolutionize the steam and hot-water heating business. But it was not one
of Lynch's brain-children. However, Lynch would now have an opportunity to
prove his value and return to the concern large profits for the amount
they had spent and would spend upon him. At any rate, he knew how to plan
and conduct an advertising and selling campaign.

Lynch, intensely relieved by the solving of this problem, the utility of
which he very readily saw, threw himself, heart and soul, into the
construction of the advertising campaign. As this work progressed, Jessup
began to have some misgivings. While the advertisements, circulars,
catalogues, and other literature were beautiful; while the English in them
was elegant, and the form of expression refined, somehow or other, they
seemed to lack the necessary punch or kick which Jessup knew they ought to
have. The two big things about the new product were, first, economy of
fuel; second, ease of operation and small demand for supervision. These
points were not brought out clearly enough. They did not grip. They did
not get home as they should. There was a good deal of talk in all the
advertising about the beauty of the new apparatus; about the refinement of
its finish; about its workmanship, and many other things which, to
Jessup's mind, detracted from the main issue. The one thing he wanted to
hammer into the minds of the readers of his advertising was the fact that
here was a heating apparatus for which fuel could be purchased in the
usual quantities and at half the regular price. What he wanted to do was
to make them actually see the dollars and cents saved, not only in fuel,
but also in the cost of operation. He wanted suburbanites to see the fact
that they could attend to their furnaces each morning before going to
town, and that the fires would not need any further attention until the
following morning; but, somehow or other, the advertising did not seem to
picture this clearly enough. The statements were made, yes; there was
plenty of evidence produced to show this; but it was done in a way which,
somehow or other, did not produce an intense conviction.

Jessup had secured from his board of directors an appropriation of fifty
thousand dollars for a national advertising campaign. Upon the result of
his first attempt would depend his securing a further appropriation for
such a campaign as he had planned and as he wanted to execute. This being
the case, he did not feel that he was justified in permitting Lynch's
advertising to go out as it was. The result was that, just before the time
came when copy must be sent to the magazines, newspapers, and street-car
advertising companies, Jessup called his old advertising manager into
conference and for a week they struggled together, revising the copy,
rewriting the selling argument, and placing emphasis in clear, strong,
unforgetable figures where it would do the most good.


The result of all this was that Lynch, seeing the writing on the wall,
tendered his resignation - which was all too gladly accepted. In offering
his resignation, however, Lynch had stipulated that he was to receive four
thousand dollars out of the six thousand five hundred still due him on his
year's contract. President Jessup's error in selecting an employee had
cost him ten thousand dollars in salary. Besides this was the still larger
sum in expenses, in wasted effort, and in the disorganization of his
entire factory and selling force as the result of the introduction of a
man who did not belong there.

His mistake was due to two fundamental errors. In the first place, the
facts that a man is personally agreeable, that he belongs to the same
political party, that he belongs to the same lodge or fraternity, that his
ideas and opinion on matters outside of business agree with his
employer's, are merely incidental and by no means adequate reasons for
employing him. Nor is the fact that he has made a good record, even an
extraordinary record, in some other line of business a good reason for
employing him. Perhaps, on the other hand, the fact that his record is
made in a totally different business is a good reason for not employing
him. It certainly was so in this case.

In the second place, President Jessup did not take into consideration the
natural aptitudes of his man, natural aptitudes which he might very easily
have determined with a moment's casual observation. Lynch was exceedingly
fine in texture; his hair, his skin, his features, his hands, and his feet
were all fine and delicate. He, therefore, loved beauty, refinement, small
articles, fine lines, elegant designs. These things appealed to him
strongly, and because of this he was able to make them appeal to others.
Anything which was heavy, rough, coarse, crude, uncouth, or ugly repelled
him. He could not take an interest in it except in the most theoretical
way. For this reason he could not interest others in it. He had an unusual
knack for selling things to people which would appeal to their love of the
beautiful and their desire for adornment; in short, to their vanity; but
he had no qualifications for selling to people on a purely commercial
basis, and especially selling something which was so matter-of-fact and
commonplace in its character as the saving of coal and the freedom from
necessity of frequent attention.


In the winter of 1914-1915, the people of New York were shocked at the
downfall of a man who had held a very high social, church, and business
position. He had a wife and two or three beautiful children; he occupied a
very prominent place in church and Sunday-school; he was well connected
socially; he was a prominent member of one of the more popular secret
fraternal organizations; he had a good position at a large salary, and
enjoyed the complete confidence and respect of his employers and business
associates. Like a bolt out of a clear sky, therefore, came the revelation
that he had robbed his employers of more than a hundred thousand dollars.
This money he had lost in speculation.

It was the old, old story. He had begun speculating with his own reserve;
this was quickly wiped out. Then, in order to win back what he had lost,
he had begun to borrow, little by little from his employer. He would win
for a little while; then he would lose, and, as a result, would have to
borrow more in an attempt to make good his losses and repay what he had

This man's employers had to make good a loss of about one hundred and
twenty-two thousand dollars. In addition to this, they lost time, money,
service, energy, and physical well-being because of the upset in their
business and the bitter disappointment to them in the defalcation of their
trusted employee. They also spent money tracing him in his flight and
bringing him back to face trial and receive his penalty. More money was
spent trying to discover whether he had concealed any of the funds he had
stolen, so that they might be recovered. All of this might have been saved
and the man himself, perhaps, might have been protected from the fate
which overtook him, if, instead of judging him by his church record and
his pleasing personal appearance and manner, they had taken the trouble to
learn something about the external evidences of weaknesses which this man
possessed in such a marked degree.


If they had learned some very simple principles, they would have been able
to determine at a glance at his curly blond hair; by his secretively
veiled eyes; by his large, somewhat fleshy nose, not particularly high in
the bridge; by the weakness and looseness of his mouth, and the small and
retreating contour of his chin, and by other important indications, that
he was selfish by nature, grasping, extravagant, too hopeful, too
optimistic, too fond of money, too self-indulgent; that he lacked
conscientiousness; that he lacked caution; that he lacked foresight; that
he lacked any very keen sense of distinction between what was his and what
belonged to others; that he lacked firmness, decision, self-control,
will-power. Notwithstanding his lack of all these things, he had made a
success for himself, up to the time of his defalcation, by means of a
keen, penetrating intellect, excellent powers of expression, the ability
to make himself agreeable, ease in mingling with strangers, a natural
talent for piety and pious profession, and considerable financial and
commercial shrewdness.

A man of this type is nearly always a gambler if he has an opportunity;
but he ought to be placed in a position where there will be no temptation
to him to rob others to satisfy his gambling proclivities. He is one of
the last men in the world who ought to be placed in a position of
responsibility, trust, and confidence. For the protection of others and
for protection against himself, he ought to be under the most careful
supervision. His intellectual powers, his suavity, his ability to meet and
handle strangers, his commercial and financial shrewdness, ought all to be
given full scope by his employers, but any opportunity to handle money or
help himself to the funds of others should be carefully shut away from


Some years ago we had an opportunity to look into the affairs of a
mail-order house which had just failed for a large sum, so that its
creditors, in the final adjustment, received about eleven cents on a
dollar for their claims. The business had been established by a capitalist
of considerable wealth, who had made his money in an entirely different
line. For some years it was operated in a conservative way by a man who
had had years of experience in the mail-order business. The man was well
along in years and rather old-fashioned in his ideas. While his management
was safe and sane, it had not produced a very large return upon the
capital investment. For this reason, the owner determined to engage, as
advertising manager, a young man who had several years' successful
experience in advertising, but no first-hand knowledge of the mail-order
business. The young man did brilliant work. The business of the house
began to grow, dividends began to come in, and the owner was delighted.
But the new advertising manager and the old general manager did not get
along well together. The young man was progressive, optimistic, had ideas
of expansion and growth, while the old man was conservative, careful, and
somewhat out of date in his ideas as to business.

There could be no result of such a combination except the final
resignation of the old general manager. This was only too gladly accepted,
and the young man who had come in as advertising manager was placed in
full charge. Following his appointment there was a period of rapid
expansion. Many new lines were added; the concern rented two more floors
in the building where it was located, and eventually purchased ground and
built a fine new building. The payroll doubled, then trebled, then
quadrupled. All these things, of course, took more capital, and the owner
was compelled to add many thousands of dollars to his original investment,

Online LibraryArthur NewcombAnalyzing Character → online text (page 21 of 34)