The other day I mentioned Sears as an example of disastrous management. Pie-in-the-sky unrealistic philosophies aren’t the fast road to success.
However, there are things you can do, like the genius behind Sears when it was a combination of Wal-Mart and Amazon. The combination of catalog sales and stores was powerful and made the company a goliath. The man behind the success was Julius Rosenwald.
Rosenwald would eventually become fabulously wealthy and a major philanthropist who, working with Booker T. Washington, established 5,000 schools for African-American children in the South at a time when segregation ruled. The story is astounding and worth the listen at the NPR link above.
But we’re here to talk business, and to that end, here’s something that Rosenwald said in an old newsreel:
Most people are of the opinion that because a man has made a fortune, that his opinions on any subject are valuable. Don’t be fooled by believing that because a man is rich that he is necessarily smart. There is amble proof to the contrary. Most large fortunes are made by men of mediocre ability who tumbled into a lucky opportunity and couldn’t help but get rich.
Think about that for a moment. The idea isn’t to disparage those who become financially successful so much as it is to deflate a self-defeating image. When you assume that people with money are smart, you undercut yourself in the following ways:
- You put the person on a different plane of existence from yourself and make your aspirations seem ridiculously idealistic rather than something obtainable.
- You imbue the wealthy person with characteristics that you may have in greater abundance.
- By focusing on supposed brilliance, you may miss the efforts and characteristics that actually did play an important role in success.
Because of a family connection and problems early on with Sears, Rosenwald had the opportunity to become a partner in the firm. He called that a “lucky chance,” and he was right. But he was prepared, having learned to sell, to work hard, and to help build a business. In Sears, he saw the future — mail-order retail, which was a new concept at the time. The company had also purchased a large number of suits from his clothing business, so he had a vested (pardon the pun) interest in making sure that his customer remained afloat.
What he brought to Sears was a clear head for business and an ability to manage an undertaking. He also brought connections, like Harry Goldman, one of the founders of Goldman Sachs, whom he had met when they were both nobodies trying to make their way in the world and living at the same boarding house. Not too long after, Sears would become the second IPO in U.S. history. Supposedly, Henry Ford visited the Sears processing plant for fulfilling orders and picked up ideas for his assembly line.
In other words, Rosenwald didn’t have to be a genius. What he needed — and what any entrepreneur needs — is a set of practical skills that help someone manage and control a company. He knew the value of developing talent. He understood numbers and the need for tight operational control. Rosenwald had a commitment to the undertaking and realized that the company’s success depended on satisfied employees who would work diligently. Constantly improving operations meant increasing the chance of doing well and decreasing the possibility that a downturn will sink you.
Maybe you’ll get that one-in-a-million idea, or possibly someone will bring it to you. Or maybe not. But no matter what, if you hone your skills and understanding, you’ll have a good shot at running a good business. And then, if that big opportunity comes along and you recognize it, maybe you’ll have developed the abilities to take it far.