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INCREASING HUMAN EFFICIENCY IN BUSINESS

A CONTRIBUTION TO THE PSYCHOLOGY OF BUSINESS

BY

WALTER DILL SCOTT



AUTHOR OF "THE THEORY OF ADVERTISING,'' "THE PSYCHOLOGY OF ADVERTISING,'' "THE PSYCHOLOGY OF PUBLIC SPEAKING,'' "INFLUENCING MEN IN BUSINESS''



CONTENTS

CHAPTER PAGE I. THE POSSIBILITY OF INCREASING HUMAN EFFICIENCY......1 II. IMITATION AS A MEANS OF INCREASING HUMAN EFFICIENCY......................................26 III. COMPETITION AS A MEANS OF INCREASING HUMAN EFFICIENCY......................................48 IV. LOYALTY AS A MEANS OF INCREASING HUMAN EFFICIENCY......................................75 V. CONCENTRATION AS A MEANS OF INCREASING HUMAN EFFICIENCY...............................104 VI. WAGES AS A MEANS OF INCREASING HUMAN EFFICIENCY.....................................132 VII. PLEASURE AS A MEANS OF INCREASING HUMAN EFFICIENCY.....................................165 VIII. THE LOVE OF THE GAME AND EFFICIENCY...........186 IX. RELAXATION AS A MEANS OF INCREASING HUMAN EFFICIENCY.....................................204 X. THE RATE OF IMPROVEMENT IN EFFICIENCY............223 XI. PRACTICE PLUS THEORY............................254 XII. MAKING EXPERIENCE AN ASSET: JUDGMENT FORMATION......................................276 XIII. CAPITALIZING EXPERIENCE: HABIT FORMATION......303



INCREASING HUMAN EFFICIENCY IN BUSINESS

CHAPTER I

THE POSSIBILITY OF INCREASING HUMAN EFFICIENCY

THE modern business man is the true heir of the old magicians. Every thing he touches seems to increase ten or a hundredfold in value and usefulness. All the old methods, old tools, old instruments have yielded to his transforming spell or else been discarded for new and more effective substitutes. In a thousand industries the profits of to-day are wrung from the wastes or unconsidered trifles of yesterday.

The only factor which has withstood this wizard touch is man himself. Development of the instruments of production and distribution has been so great it can hardly be measured: the things themselves have been so changed that few features of their primitive models have been retained.

Our railroad trains, steamships, and printing presses preserve a likeness more apparent than actual. Our telephones, electric lights, gas engines, and steam turbines, our lofty office buildings and huge factories crowded with wonderful automatic machinery are creations of the generation of business men and scientists still in control of them.

By comparison the increase in human efficiency during this same period (except where the worker is the slave of the machine, compelled to keep pace with it or lose his place) has been insignificant.

Reasons for this disproportion are not lacking. The study of the physical antedates the study of the mental always. In the history of the individual as well as of nations, knowledge of the psychical has dragged far behind mastery of tangible objects. We come in contact with our physical environment and adjust ourselves to it long before we begin to study the *acts by which we have been able to control objects around us.

It was inevitable, therefore, that attention should have been concentrated upon the material and mechanical side of production and distribution. Results there were so tangible, so easily figured. For example, if the speed of a drill or the strokes of a punch press were multiplied, the increase would be easily recognized. The whole country, too, was absorbed in invention, in the development of tools to accomplish what had always required hand labor. The effort was not so much to increase the efficiency of the individual worker— though many wise and far-sighted employers essayed studies and experiments with varying success—as to displace the human factor altogether.

As the functions and limitations of machinery have become clearer in recent years, business men have generally recognized the importance of the human factor in making and marketing products. Selecting and handling men is of much more significance to-day than ever before in the history of the world —the more so as organizations have increased in size and scope and the individual employee is farther removed from the head and assigned greater responsibilities.

It is not a difficult task to build and equip a factory, to choose and stock a store. The problems of power and its transmission come nearer solution every day. Physics and chemistry have revealed the secrets of raw materials. For any given service, the manufacturer can determine the cheapest and most suitable metal, wood, or fabric which will satisfy his requirements, and the most economical method of treating it.

Of the elements involved in production or distribution, the human factor is to-day the most serious problem confronting the business man. The individual remains to be studied, trained, and developed—to be brought up to the standard of maximum results already reached by materials and processes.

Few employers can gather a force of effi- cient workers and keep them at their best. Not only is it difficult to select the right men but it is even harder to secure top efficiency after they are hired. Touching this, there will be no dispute. Experts in shop management go even farther. F. W. Taylor, who has made the closest and most scientific study, perhaps, of actual and potential efficiency among workers, declares that:—

"A first-class man can, in most cases, do from two to four times as much as is done on the average.''

"This enormous difference,'' Mr. Taylor goes on to say, "exists in all the trades and branches of labor investigated, from pick- and-shovel men all the way up the scale to machinists and other skilled workmen. The multiplied output was not the product of a spurt or a period of overexertion; it was simply what a good man could keep up for a long term of years without injury to his health, become happier, and thrive under.''

Ask the head of any important business what is the first qualification of a foreman or manager, and he will tell you "ability to handle men.''

Men who know how to get maximum results out of machines are common; the power to get the maximum of work out of subordinates or out of yourself is a much rarer possession.

Yet this power is not necessarily a sixth sense or a fixed attribute of personality. It is based on knowledge of the workings of the other man's mind, either intuitive or acquired. It is the purpose of this and succeeding chapters to consider some of the aspects of human nature that can be turned to advantage in the cultivation of individual efficiency and the elimination of lost motion and wasted effort.

In a thousand instances, in factory and market place, unrecognized use has been made of the principles of psychology by business men to influence other men and to attain their ends.

For the science of psychology is in respect to certain data merely common sense, the wisdom of experience, analyzed, formulated, and codified. It has taken its place, alongside physics and chemistry, as the ally and employee of trade and industry.

The time has come when a man's knowledge of his business, if the larger success is to be won, must embrace an understanding of the laws which govern the thinking and acting of the men who make and sell his products as well as those others who buy and consume them.

The achievements of the human mind and the human body seem to many to be out of the range of possible improvement through application of any science which deals with these human activities. Muscular strength and mental efficiency seem to be fixed quantities not subject to increase or improvement.

The contention here supported, however, is that human efficiency is a variable quantity which increases and decreases according to law. By the application of known physical laws the telephone and the telegraph have supplanted the messenger boy. By the laws of psychology applied to business equally astounding improvements are being and will be secured.

Employers sometimes find that their men are not working well, that they loaf and kill time on every possible occasion. The men are not trying and are indifferent to results. Under such circumstances a new foreman, the dismissal of the poorer workmen, modification of the wage scale or method of payment, or some other device may correct the evil and induce the men to exert themselves.

Again, the men are working industriously and may feel that an increase in output would be injurious to health or even impossible. They think they are doing their best; while the employer himself may feel that he is achieving but little, although he assumes that he is doing as much as it is wise to attempt. For instance, Mr. Taylor, in his studies, found that both employers and men had only a vague conception of what constituted a full day's work for a first-class man. The good workmen knew they could do more than the average; but refused to believe when, after close observation and careful timing of the ele- ments of each operation, they were shown that they could accomplish twice or three times as much as their customary tasks.

Actual instances prove that great increase of work and results can be secured by outside stimulus and by conscious effort.

If there is one place where the limit of exertion can be counted upon, it is in an inter- collegiate athletic contest. While taking part in football games, I frequently observed that my team would be able to push the opposing team halfway across the field. Then the tables would be turned and my team would give ground. At one moment one team would seem to possess much superior physical strength to the other; the next moment the equilibrium would be changed apparently without cause. Often, however, the weaker team would rally in response to the captain's coaching. On the field a player frequently finds himself unable to exert himself. His greatest effort is necessary to force himself to work. In such a mental condition a vigorous and enthusiastic appeal from the coach may supply the needed stimulus and stir him to sudden display of all his strength.

I recently conducted a series of experiments on college athletes to determine whether coaching could actually increase a man's strength when he was already trying his "best,'' and whether he could continue to work after he was "completely exhausted.'' I put each man at work on machines which allowed him to exert himself to his utmost and measured his accomplishment. While he was thus employed, the coach began urging him to increase his exertion. Ordinarily the increase was marked—sometimes as much as fifty per cent.

Again, when the man had exhausted himself without coaching, the extra demand would be made on him; usually he was able to continue, even though without the coaching he had been unable to do any more. There was, of course, a point of exhaustion at which the coaching ceased to be effective.

The tests proved conclusively that when a man is doing what he believes to be his best, he is still able to do better; when he is completely exhausted, he is, under proper stimulus, able to continue.

Before a horse is started in a race it is vigorously exercised, "warmed up.'' To the uninitiated this process seems so strenuous as to defeat its purpose by wearing out the strength of the horse. Every horseman knows, however, that the animal cannot attain top speed till after it has undergone this severe discipline.

In training for a contest an athlete usually takes long runs. Soon after the start he feels weary and exhausted, but, by disregarding this feeling and continuing to run, a sudden change comes over him commonly known as "getting his second wind.''

Thus the runner feels wave upon wave of exhaustion followed by waves of invigoration. Had he stopped when he first began to tire, he never would have known of his wonderful reserve fund of strength which can be drawn upon only by passing through the feeling of exhaustion. He seems to be able to tap deeper and deeper reservoirs of strength.

Many men have never discovered their reserve stores of strength because they have formed the fixed habit of quitting at the first access of weariness.

Thus they never become conscious of the wonderful resources which might be used if they were willing to disregard the trifling wave of weariness.

Our best energies are not on the surface and are not available without great exertion. We have to warm up and get our second wind before we are capable of our best physical or mental accomplishments. All our muscular and psychical processes are dependent upon the activity of the nervous system. This activity seems to be at its best only after repeated and vigorous stimulation and after it has reached down to profound and widely distributed centers.

Most of us never know of our possible achievements because we have never warmed up and got our second wind in our business or professional affairs.

When an individual succeeds in tapping his reserve energies, others marvel at the tremendous tasks he accomplishes. They judge in terms of superficial energy, and for such the results would, of course, be impossible, even though many of the admiring spectators could actually equal or excel the deed.

Consider for a moment the work achieved by Mr. Edward Payson Weston who recently walked the entire distance from New York to San Francisco without halt or rest in one hundred and four days. Throughout the entire journey Mr. Weston covered about fifty miles daily, once attaining the remarkable distance of eighty-seven miles in twenty-four hours. Though Mr. Weston is seventy years of age, at the close of the walk he seemed to be relatively free from exhaustion and undaunted in spirit.

The work accomplished by such men as Gladstone and Roosevelt is incomprehensible to most of us who have never undertaken more than puny tasks. These men retain their strength and in no way seem to be undermining their health by the accomplishment of their Herculean labors. Body and mind seem to respond to the demands made upon them. Their periods of sleep and their vacations seem to be no more than the hours and days of rest required by those of us who accomplish infinitely less.

No need, however, to go beyond the field of business or industry to find men whose super-energy has carried them to epochial discoveries or feats of organization. The invention of the incandescent lamp by Edison is said to have been accomplished, for instance, only after forty-eight hours' continuous concentration on the final problem of finding the right carbon filament and determining the proper degree of vacuum in the inclosing bulb. Months of experiment and research had gone before; eighteen hours a day in the laboratory had been no uncommon thing for the inventor and his assistants, but in the last strenuous grapple with success his own physical and mental powers were alone equal to the strain. Not once during the two days and nights did he rest or sleep or take his attention from the successive tests which led up to the assembling of the lamp which lights the world's work and play.

The steel blade that is used seems to last as long as the one which is allowed to lie idle. The wearing out in the one case does not seem to be more destructive than the rusting out in the other.

We have a choice between wearing out and rusting out. Most of us unwittingly have chosen the rusting process.

This, indeed, may be said to be Edison's regular method of work, as it is the method of many other men who have accomplished great things in science and industry. Both mind and body have been trained and accustomed to exertions which seem quite impossible to ordinary individuals.

Many persons find that increased intellectual activity results in less fatigue and greater achievements. As a student I did my best work and enjoyed it most the year I carried the greatest number of courses and assumed the most outside duties. In my capacity as adviser to college students I find many who are able to accomplish thirty per cent more work than is expected of college students but fail to do equally well the regular amount. There are others who can carry the regular amount but not more without injury to their health.

College grades afford a means of recording intellectual efficiency directed toward particular problems. With no apparent change in bodily conditions the same student frequently increases his efficiency a hundred per cent. The increase seldom has an injurious effect on health, but is merely evidence of the fact that he has suddenly wakened up and is applying energies which before were undiscovered. A slow walk for a single mile leaves many persons "dragged out'' and exhausted, but a brisk walk of the same or a greater distance results in invigoration and recuperation. Likewise the droning over an intellectual task results in exhaustion, while vigorous treatment whets the appetite for additional problems.

This swift, decisive attack on problems was the method of Edward H. Harriman, who crowded into ten years the railroad achievements of an extraordinary lifetime. Decisions involving expenditure of many millions of dollars were arrived at so quickly as to seem off-hand, even reckless. In reality, they were the products of brief periods of intense application in which he reviewed all the conditions and elements involved, and forged his conclusion, as it were, at white heat. Back of each decision was exact and thorough knowledge of the physical and traffic conditions of each of his railroads. In the case of the Union Pacific, at least, he gained this mastery by patient, intensive study of each grade and curve and freight-producing town on its 1800 miles of track.

The inhabitant of the torrid zone upon moving to a northern climate is severely affected by the chill of the atmosphere. The discomfort may last for days or months, but he becomes acclimated and is able to withstand the cold without serious discomfort. Likewise the inhabitant of a cool climate feels exhausted by the heat of the torrid zone. In some cases he is unable to accustom himself to the change, but in many instances the acclimatization follows rapidly and leaves the individual well fortified against the dangers of excessive heat.

Persons who have accustomed themselves to stimulants of any sort are completely depleted if they are unable to get the special form to which they have been accustomed. This holds true for tobacco, morphine, coffee, and many other forms of stimulants actually indulged in by many persons. If they are able to resist the temptation and deny themselves the stimulant, the period of exhaustion soon disappears and the subject may even lose all craving for that which formerly seemed essential to his very existence.

The quantity which we eat is partly a matter of habit. There is doubtless a minimum of nourishment which is absolutely necessary for health and strength. On the other hand there is doubtless a maximum limit which cannot be passed without serious injury. Our bodies seem to demand the amount of food to which we have accustomed them. If we should increase the amount ten or twenty per cent, we might, for a while, feel some discomfort from it, but soon our system would begin to demand the greater quantity and we could not again return to the lighter diet without a period of discomfort. Likewise the amount of food which most of us consume could be reduced materially with no permanent injury or reduction of energy or danger to health. Following the reduction would be a period of discomfort and probable reduction of weight. This period would last for but a relatively short time, after which we would again strike a physiological equilibrium such that an increase of food would not be craved nor be of any benefit.

Any great increase in the amount of physical or mental work results in a feeling of weariness which is usually sufficient to cause us to return to our habitual amount of expenditure of energy. Our system is, however, wonderful in its capacity to adjust itself to changed demands which come upon it, whether these demands be in the nature of changes in temperature, in stimulants, in nourishment, or in the expenditure of physical or mental energy.

There is, of course, a limit to possible human achievements. There are resources which may not be exhausted without serious injury to health. Those who accomplish most, however, compare favorably with others in length of days and retention of health.

While overwork has its place among the things which reduce energy and shorten life, it is my opinion that overwork is not so dangerous or so common as is ordinarily supposed.

In not a few industries, the dominant house or firm has for its head a man past seventy who still keeps a firm and vigorous grip on the business: men like Richard T. Crane of Chicago, E. C. Simmons of St. Louis, and James J. Hill, whose careers are records of intense industry and absorbed devotion to the work in hand.

Many persons confuse overwork with what is really underwork accompanied with worry or unhygienic practices.

A recent writer on sociology calls attention to the fact that nervous prostrations and general breakdowns are most common among those members of society who achieve the least and who may be regarded as parasites. Exercise both of brain and of muscle is necessary for growth and for health.

Those nations which expend the most energy are probably the ones among whom longevity is greatest and the mortality rate the lowest. In the city of Chicago there are many conditions adverse to health of body and mind, yet the city is famous for its relatively low mortality as a parallel fact. It is also affirmed that the average Chicago man works longer hours and actually accomplishes more than the average man elsewhere. This excess in the expenditure of energy—in so far as it is wisely spent—may be one of the reasons for the excellent health record of the city.

In every walk of life we see that the race is not to the swift nor the battle to the strong. We all know men clearly of secondary ability who nevertheless occupy high positions in business and state. We are acquainted also with men of excellent native endowment who still have never risen above the ranks of mediocrity.

Human efficiency is not measured in terms of muscular energy nor of intellectual grasp. It is dependent upon many factors other than native strength of mind and body.

The attitude which one takes toward life in general and toward his calling in particular is of more importance than native ability. The man with concentration, or the power of continued enthusiastic application, will surpass a brilliant competitor if this latter is careless and indifferent towards his work. Many who have accomplished great things in business, in the professions, and in science have been men of moderate ability. For testimony of this fact take this striking quotation from Charles Darwin.

"I have no great quickness of apprehension or wit, which is so remarkable in some clever men,'' he writes. "I am a poor critic. . . . My power to follow a long and purely abstract train of thought is very limited; and therefore I never could have succeeded with metaphysics or mathematics. My memory is extensive, yet hazy; it suffices to make me cautious by vaguely telling me that I have observed or read something opposed to the conclusion which I am drawing, or on the other hand in favor of it. So poor in one sense is my memory, that I have never been able to remember for more than a few days a single date or a line of poetry. I have a fair share of invention, and of common sense or judgment, such as every fairly successful lawyer or doctor must have, but not, I believe, in any higher degree.''

This is presumably an honest statement of fact, and in addition it should be remembered that Darwin was always physically weak, that for forty years he was practically an invalid and able to work for only about three hours a day. In these few hours he was able to accomplish more, however, than other men of apparently superior ability who were able to work long hours daily for many years. Darwin made the most of his ability and increased his efficiency to its maximum.

For a parallel in business, Cyrus H. McCormick might be named. The inventor of the reaper and builder of the first American business which covered the world was not a man of extraordinary intellect, wit, or judgment. He had, however, the will and power to focus his attention on a single question until the answer was evolved. Again and again, his biographers tell us, he pursued problems which eluded him far into the night and he was frequently found asleep at his desk the morning following. When roused, instead of seeking rest, he addressed his task again and usually overcame his obstacle before leaving it.

All these considerations point to one conclusion. It is quite certain, then, that most of us are whiling away our days and occupying positions far below our possibilities. A corollary to this statement is Mr. Taylor's conclusion that "few of our best-organized industries have attained the maximum output of first-class men.''

Not to give too wide application to his discovery that the average day's work is only half or less than half what a first-class man can do, it is more than probable that the average man could, with no injury to his health, increase his efficiency fifty per cent.

We are making use of only part of our existing mental and physical powers and are not taxing them beyond their strength. Increased accomplishments, and heightened efficiency would cultivate and develop them, would waken the latent powers and tap hidden stores of energy within us, would widen the fields in which we labor and would open up to us new and wider horizons of honorable and profitable activity.

In succeeding chapters will be described specific methods, many of which are employed by individual firms, but which could be utilized by other business men, to insure their own efficiency and that of their employees. The experiences of many successful houses will be linked to the laws of psychology to point the way that will bring about greater results from men.



CHAPTER II

IMITATION

AS A MEANS OF INCREASING HUMAN EFFICIENCY

TWENTY years ago the head of an industry now in the million-a-month class sat listening to his "star'' salesman. The latter, in the first enthusiasm of discovery and creation, was telling how he had developed the company's haphazard selling talk and had taken order after order with a standard approach, demonstration, and summary of closing arguments. To prove the effectiveness of "the one best way,'' he challenged his employer to act as a customer, staged the little drama he had arranged, secured admissions of savings his machine would make, ultimately cornered the other, and sold him.

"That's great,'' the owner declared the in- stant he had surrendered to the salesman's logic. "If we can get all our agents to learn and use this new method of yours, we'll double our business in three years.''

Then followed discussion of the means by which the knowledge could be spread.

"I've got it,'' the manager announced at last. "I'll telegraph five or six men to come in''—he named the agents within a night's ride of the factory—"and you can show them how you sold fifteen machines last week.

"We could take down your talk in shorthand and send it to them, but that wouldn't do the business. I want them to watch you sell, to study how you make your points, how you introduce yourself, how you get your man's attention, how you bring out his objections and meet them, how you lead up to the signing minute, and show him where to sign. *What you say is about half the trick: *how you say it is the convincing part—the thing the slowest man in the force by watching you can learn more quickly than the smartest could work out at home.''

The result of that conference was one of the earliest organized training schools for salesmen in the country. It was an unconscious, but none the less certain, utilization of the instinct of *imitation for increasing the efficiency in employees. Since then, business has borrowed many well-recognized principles from psychology and pedagogy and adapted them to the same end.

Many important houses have grafted the school upon their organizations and *teach not only raw and untrained employees, but provide instruction calculated to make workmen and clerks masters of their jobs and also to fit them for advancement to higher and more productive planes. Teaching is by example rather than by precept, just as it was in the old apprentice system.

The newer method uses even more than the older a perfect example of the process and the product for the learner's imitation and makes them the basis of the instruction.

No man was made to live alone. For an individual, existence entirely independent of other members of the race is the conception of a dreamer; apart from others one would fail to become *human. Modern psychology has abandoned the individualistic and adopted the social point of view. We no longer think of *imitation as a characteristic only of animals, children, and weak-minded folk.

We have come to see that imitation is the greatest factor in the education of the young and a continuous process with all of us. The part of wisdom, then, is to utilize this power from which we cannot escape, by setting up a perfect copy for imitation.

The child brought up by a Chinaman imitates the sounds he hears, hence speaks Chinese; brought up in an American home, English is his speech—ungrammatical or correct according to the usage of his companions. If one boy in a group walks on stilts or plays marbles, the others follow his example. If a social leader rides in an automobile, wears a Panama hat, or plays golf, all the members of this circle are restless till they have the same experience. The same phenomenon is seen in the professions and in business. If one bank decides to erect a building for its own use, other banks in the city begin to consult architects. If one manufacturer or distributor in a given field adopts a new policy in manufacturing or in extending his trade zone, his rivals immediately consider plans of a similar sort. Partly, of course, this act is defensive. In the main, however, imitation and emulation are at the bottom of the move.

For the sake of clearness, in studying acts of imitation we separate them into two classes—*voluntary imitation (also called conscious imitation) and *instinctive imitation (also known as *suggestive imitation).

A peculiar signature may strike my fancy so that consciously and deliberately I may try to imitate it. This is a clear case of voluntary imitation. Threading crowded city streets, I see a man crossing at a particular point and voluntarily follow in his path. In learning a new skating figure I watch an expert attentively and try to repeat his perform- ance. In writing letters or advertisements or magazine articles, I analyze the work of other men and consciously imitate what seems best. Or I observe a fellow-laborer working faster than I, and forthwith try to catch and hold his pace.

The contagion of yawning, on the other hand, is instinctive imitation. Also when in a crowd during the homeward evening rush, we instinctively quicken our pace though there may be no reason for hurry.

For precisely similar reasons, a "loafer'' or a careless or inefficient workman will lower the efficiency or slow up the production of the men about him, no matter how earnest or industrious their natural habits. Night work by clerks, also, is taken by some office managers to indicate a slump in industry during the day. To correct this the individuals who are drags on the organization are discovered, and either are revitalized or discharged.

I have seen more than one machine shop where production could have been materially raised by the simple expedient of weeding out the workmen who were satisfied with a mere living wage earned by piecework, thereby setting a dilatory example to the rest; and replacing them with fresh men ambitious to earn all they could, who would have been imitated by the others.

In these instances it is assumed that the imitation is not voluntary, but that we unconsciously imitate whatever actions happen to catch our attention. For the negative action, the "slowing down'' process, we have the greater affinity simply because labor or exertion is naturally distasteful. One such influence or example, therefore, may sway us more than a dozen positive impulses towards industry.

Imitation thus broadly considered is seen to be of the utmost importance in every walk of life. The greatest and most original genius is in the main a creature of imitation. By imitation he reaches the level of knowledge and skill attained by others; and upon this foundation builds his structure of original and creative thought, experiment, and achieve- ment. Furthermore he does not imitate at random; but concentrates his activity on those things and persons in the line of his pursuits.

Among my associates are both industrious and shiftless individuals. I instinctively imitate the actions of all those with whom I come in contact; but if I am sufficiently ambitious, I will consciously imitate the acts of the industrious. This patterning after energetic models will render me more active and efficient than would have been possible for me without such examples.

Imitation, accordingly, is an imperative factor both in self-development and in the control of groups of individuals. Knowing that I instinctively imitate all sorts of acts, I must take care that only the right sort shall catch my attention.

And since imitation is a most effective aid in development, I must provide myself with the best models. To reduce my tendency to idleness or procrastination I must avoid the companionship of the shiftless. To acquire ease and accuracy in the use of French, I must consort with masters of that tongue.

In handling others, the same rule holds.

To profit from the instinctive imitation of my men, I must control their environment in shop or office and make sure that examples of energy and efficiency are numerous enough to catch their attention and establish, as it were, an atmosphere of industry in the place.

There are instances in which it would be to the mutual interest of employer and employee to increase the speed of work, but conditions may limit or forbid the use of pacemakers. In construction work and in some of the industries where there are minute subdivision of operations and continuity of processes this method of increasing efficiency is very commonly applied. In many factories, however, such an effort to "speed up'' production might stir resentment, even among the pieceworkers, and have an effect exactly opposite to that desired. The alternative, of course, is for the employer to secure unconscious pacemakers by providing incentives for the naturally ambitious men in the way of a premium or bonus system or other reward for unusual efficiency.

To take advantage of their conscious or voluntary imitation, workpeople must be provided with examples which appeal to them as admirable and inspire the wish to emulate them. A common application of this principle is seen in the choice of department heads, foremen, and other bosses. Invariably these win promotion by industry, skill, and efficiency greater than that displayed by their fellows, or by all-round mastery of their trades which enable them to show their less efficient mates how any and all operations should be conducted.

This focusing of attention upon individuals worthy of imitation has been carried much farther by various companies. Through their "house organs''—weekly or monthly papers published primarily for circulation within the organization—they make record of every incident reflecting unusual skill, initiative, or personal power in an individual member of the organization.

A big order closed, a difficult contract secured, a complex or delicate operation performed in less than the usual time, a new personal record in production, the invention of an unproved method or machine—whatever the achievement, it is described and glorified, its author praised and held up for emulation. This, indeed, is one of the methods by which the larger sales organizations have obtained remarkable results.

Graphically told, the story of an important sale with the salesman's picture alongside makes double use of the instinct of imitation. It suggests forcibly that every man in the field can duplicate the achievement and tells how he can do it.

Frequently, examples of initiative and efficiency are borrowed from outside organizations. "Carrying a message to Garcia'' has long been a business synonym for immediate and effective execution of orders. One big company, employing thousands of mechanics and developing all its executives and skilled experts from boys and men within the or- ganization, has printed in its house organ studies of all the great American and English inventors from Stephenson and Fulton to Edison and Westinghouse. These histories emphasize the facts that these men were self- taught and bench-trained, and that their achievements can be imitated by every intelligent mechanic in the organization.

In teaching and learning by imitation certain modifying facts are to be kept constantly in mind. We tend to imitate everything which catches our attention, but certain things appeal more powerfully than others.

The acts of those whom I admire are particularly contagious, but I remain indifferent to the acts of those who are uninteresting. Acts showing a skill to which I aspire are immediately imitated, while acts representing stages of development from which I have escaped are less likely to be imitated. We imitate the acts of hearty, jovial individuals more than the acts of others. This point cannot be pressed too far since a surly and selfish individual often seems to corrupt a whole group. Also it is not always the acts which I admire that are imitated. If I am frequently with a lame person, I am in danger of acquiring a limp; one who stutters is clearly injurious to my freedom of speech; round-shouldered friends may at first cause me to straighten up, but soon I am in danger of a droop.

That imitation is merely something to be avoided by teachers, employers, and foremen is an idea soon banished when the importance and complexity of the process is comprehended. In teaching we find precept inferior to example wherever the latter is possible. Particularly in teaching all sorts of acts of skill the imitation of perfect models is the first resort. In business, however, insufficient consideration has been given to the possibilities of imitation in increasing human efficiency.

In the preparation of this article representative business men who had been especially successful in dealing with employees were asked the following questions:—

In increasing the efficiency of your employees do you utilize imitation by

(1) placing efficient workmen where they may be imitated by the less efficient?

(2) having the men visit highly efficient establishments?

(3) bringing to the attention of your men the lives of successful men and the work of successful houses?

(4) bringing frequently to the attention of the men model methods of work?

(5) Have you observed any pronounced instance of increase or decrease in the work of a department due to imitation?

The men interviewed took a decided interest in the subject, and their answers contained much of general value. Some admitted that they had never made any conscious effort to utilize imitation as implied in the first four questions. Many others had made particular use of one or more of the methods. A few of the firms interviewed had employed all four methods with entire satisfaction.

The following is a fair representative of the answers. It is the response of a very successful general manager of a railroad:—

"I beg to give you below the answer to the questions which you have asked:—

"1. The superintendent and foremen in our shops are the most efficient we can find. They are imitated, and thus influence the less efficient.

"2. We have the heads of our departments visit other shops to see how they are progressing in the same line. If they notice anything that is better than what we have as to the output of work, we imitate it by following their methods.

"3. We have not made a practice of bringing to the attention of our employees the lives of successful men or the work of successful houses.

"4. We keep standard models of the different kinds of work in plain view of the men. If there is any doubt in their minds, they can study these models.

"5. We have observed a pronounced in- crease in the work of our shops, due to imitation, since in lining up our organization we put the most competent men we have at the head. Their influence over the men in their charge increases the work, as there is no question that a good leader is imitated by the men, and the company is benefited by this imitation.''

Judged by the results of the investigation the most common use of imitation is in the training or "breaking in'' of new employees. The accepted plan is to pick out the most expert and intelligent workman available and put the new man in his charge.

By observing the veteran and imitating his actions, working gradually from the simpler operations to the more complex, the beginner is able to master technic and methods in the shortest possible time. The psychological moment for such instruction, of course, is the first day or the first week. New men learn much more readily than those who have become habituated to certain methods or tasks; not having had time or opportunity to experi- ment and learn wrong methods, they have nothing to unlearn in acquiring the right. They fall into line at once and adopt the stride and the manner of work approved by the house.

This is the specific process by which the most advanced industrial organizations develop machine hands and initiate skilled mechanics into house methods and requirements. It has been largely used by public service corporations—street-car motormen and conductors, for instance, learning their duties almost entirely by observation of experienced men either in formal schools or on cars in actual operation. Many large commercial houses give new employees regular courses in company methods before intrusting work to them; the instructor is some highly efficient specialist, who shows the beginner *how to get output and quality with the least expenditure of time and energy. The same method has been adapted by leading manufacturers of machines, who call their mechanics or assemblers together at intervals and have the most expert among them show how they conduct operations in which they have attained special skill.

In the training of salesmen imitation has received its widest application in teaching new men the elements of salesmanship; in showing them how to make the individual sale; in giving old men the best and newest methods—all by imitation.

Not only is the recruit to the selling ranks in formal schools given repeated examples of the most effective ways to approach customers, to demonstrate the house goods and secure the order; but the more progressive companies, after this preliminary instruction, assign him to a training ground where he accompanies one of the company's best salesmen and merely observes how actual sales are made. Then the new man is sent out alone; usually he fails to secure as large an order as the house wants. Again the star salesman takes him in hand, analyzes the student's approach and demonstration, points out their weaknesses and, going back with the new man, makes the right kind of approach and secures a satisfactory order. For the beginner this is the most vivid lesson in salesmanship; he cannot but model his next selling effort on the lines proved so effective.

The use of imitation, however, is carried further. In the monthly or semiannual district conventions of salesmen which most big organizations call, the newest and most effective selling methods are staged for the instruction both of new men and veterans. The district leader in sales, for example, or the man who has closed an order by a new or unusual argument is pitted against a salesman equally able, and the whole force sees how the successful man secured his results.

Educational trips to other factories were employed by several firms to stimulate mental alertness and the instinct of imitation in their men. These trips usually supplemented some sort of suggestion system for encouraging employees to submit to the management ideas for improving methods, machines, or products.

Cash payments were made for each suggestion adopted, quarterly prizes of ten to fifty dollars were awarded for the most valuable suggestions; and finally a dozen or a score of the men submitting the best ideas were sent on a week's tour of observation to other industrial centers and notable plants. In some instances the expense incurred was considerable, but the companies considered the money well spent. Not only were the men making helpful suggestions the very ones who would observe most wisely and profit most extensively from such educational trips, but they would bring back to their everyday tasks a new perspective, see them from a new angle, and frequently offer new suggestions which would more than save or earn the vacation cost.

Business managers, it was made plain, are coming more and more to depend upon imitation as one of the great forces in securing a maximum of efficiency without risking the rupture or rebellion which might follow if the same efficiency were sought by force or by any method of conscious compulsion. Tactfully suggested, the examples for imitation will lead men where no amount of argument or reasonable compensation will drive them. I am therefore led to suggest the following uses of imitation for increasing the efficiency of the working force.

In breaking in new recruits they should be set to imitate expert workmen in all the details possible.

Gang foremen and superintendents should always be capable of "showing how'' for the sake of the men under them.

The better workmen should, where possible, be located so that they will be observed by the other employees.

Inefficient help should be avoided since the example of the less efficient should become the model for the larger group.

Educational trips or tours of inspection should be regularly encouraged for both workmen and superintendents.

The deeds of successful houses should be brought to the attention of employees.

Where conditions admit, pacemakers should be retained in various groups to key up the other men.

Favorable conditions should be provided for conscious and instinctive imitation for all the members of the plant.

Persons who are sociable and much liked are imitated more than others, and if efficient, are particularly valuable; but if inefficient, are especially detrimental to others.

At the formal and informal meetings of the men of a house or a department, demonstrations of how to do certain definite things are very interesting and helpful to all concerned. Demonstrations should be more common.



CHAPTER III

COMPETITION

AS A MEANS OF INCREASING HUMAN EFFICIENCY

THIRTY years ago American steel makers were astonishing the world with new production records. What English ironmasters, intrenched in their supremacy for centuries, had regarded as a standard week's output for Bessemer converters, their young rivals in mills about the Great Lakes were doubling, trebling, and even further increasing. Hardly a month passed without a new high mark and a shift in possession of the leadership.

To this remarkable increase in efficiency William R. Jones—"Captain Bill'' Jones as he was familiarly known—contributed more than any other operating man. He was a genius among executives as well as an inventor of resource and initiative—a natural leader and handler of men. When he was asked by the British Iron and Steel Institute in 1881, to explain the reasons for the amazing development in the United States, he attributed it to organization spirit of the workmen and the rivalry among the various mills.

"So long as the record made by a mill stands first,'' he wrote, "its workmen are content to labor at a moderate rate. But let it be known that some other establishment has beaten that record and there is no content until the rival's record is eclipsed.''

It was on this idea of competition for efficiency—of production as a game and achievement as a goal—that the wonderful growth of the steel industry was based.

On the intensive development of this idea by Andrew Carnegie, within his expanding organization, hinged the tremendous progress and profits of the Carnegie Company. "The little boss'' matched furnace against furnace, mill against mill, superintendent against superintendent. He scanned his weekly and monthly reports not merely for records of output, but for comparative consumption of ore, fuel, and other supplies, for time and labor costs in proportion to product.

If a superintendent, foreman, or gang failed to respond to this urging, failed to get into the race for the famous broom which crowned the stack of the champion Carnegie mill or furnace, the parallel showing of the other mills became a club to drive the laggards into line. So intense was the competition, so sharp the verbal goads applied that Jones, after resigning in indignation, parodied in sarcastic notes in this manner the Carnegie fashion of bringing executives to task: "Puppy dog number three, you have been beaten by puppy dog number two on fuel. Puppy dog number two, you are higher on labor than puppy dog number one.''

How effective was this system of pitting man against man, plant against plant, was shown by the dominant position of the Carnegie Company in the trade when the Steel Corporation was launched and by the stag- gering value put upon its business. Indirect testimony of the same fact was given another time by Jones when he refused thousands of dollars in yearly royalties for the use of his inventions by outside companies, this though the men who sought them were personal friends and his contract with the Carnegie Company allowed such licenses. His excuse was eloquent of the power residing in the Carnegie contest for efficiency and results: leadership for his charge, the Edgar Thompson works, in output and costs, meant more to him than money and a chance to help his friends.

The Carnegie system was one of the most comprehensive applications in business of man's instinct of competition to the work of increasing individual and organization efficiency.

In the handling of executives it was carried to such extremes as few great managers would approve to-day. Undeniably, however, the contest idea was an important influence in the building up of a vast business in relatively brief time, while the influence on the pace of the whole industry gave the United States its present supremacy in steel and iron. It survives in the parallel comparisons of records with which the Steel Corporation measures the efficiency of its units of production and keeps its mill superintendents to the mark. It is utilized, in some degree and in varying departments, by hundreds of successful houses.

Let us analyze the facts, the habits of thought, the emotions behind competition and determine where and how it may be applied to the task of increasing our own and our employees' efficiency.

The experienced horseman knows that a horse is unable to attain his greatest speed apart from a pacemaker. The horse needs the stimulus of an equal to get under way quickly, to strike his fastest gait and to keep it up. In this particular an athlete in sprinting is like the horse. He is unable by sheer force of will to run a hundred yards in ten seconds. To achieve it he needs a competitor who will push him to his utmost effort.

The struggle for existence, one of the main factors in the evolution of man, has raged most fiercely among equals; without it, development scarcely would have been possible.

So fundamental has been this struggle that the necessity for it has become firmly established within us. We require it to stimulate us to attain our highest ends.

As is made evident by a consideration of imitation we are eminently social creatures. We imitate the acts of those about us. Imitation is, however, only the first stage of our social relationship. We first imitate and then compete. I purchase an automobile in imitation of the acts of my friends, but I compete with them by securing a more powerful or swifter car. By erecting a new building because some other banker has done so, the second individual does more than imitate. He competes with the first by planning to erect a more magnificent structure and on a more commanding site. Or a great retail store, announcing a "February sale'' of "white goods'' or furniture, invariably tries to surpass the bargains offered by rival establishments.

We do indeed imitate and compete with all our associates, but those whom we recognize as our peers are the ones who stimulate us more to the instinctive acts of imitation and competition.

Our actual equals stimulate us less than those whom we recognize as the peers of our ideal selves—of ourselves as we strive and intend to become. The man on the ladder just above me stirs me irresistibly.

The effect of one individual upon others, then, is not confined to imitation. There is a constant tendency to vary from and to excel the model. My devotion to golf is mainly due to he example of some of my friends. My ambition is to outplay these same friends. Imitation and competition, apparently antagonistic, are in reality the two expressions for our social relationships. We first imitate and then attempt to differentiate ourselves from our companions.

The manufacturer or merchant imitates his competitor, but tries also to surpass him. Indeed it is a truism that competition is the life of trade. In the shop and in the office, on the road and behind the counter, in all buying and selling, competition is essential to the greatest success. Competition, the desire to excel, is universal and instinctive. It gives a zest to our work that would otherwise be lacking. In every sphere of human activity competition seems essential for securing the best results.

We assume ordinarily that competition exists only between individuals. As a matter of fact, a slight degree of competition may be aroused between a man's present efforts and his previous records.

While not so tense or so compelling as is competition between individuals, it has the advantage of avoiding the creation of jealousies. In all the more exciting and stimulating games, rivalry between individuals is a prominent feature. In golf the game is frequently played without this factor, the only competition being with previous records or with the mythical Bogy.

Such competition adds considerable zest to the game, and the same principle is applicable to business. The most compelling rivalry is between peers; without this, however, it is possible to pit the possibilities of the present month against the achievements of the previous four weeks or the past year or even against a hypothetical individual "bogy.'' This bogy may be fixed by the executive, and the man induced to compete with it. Thus the dangers of competition may be minimized and the advantages of the human instinctive desire for competition be gained.

In the average well-organized business the carrying out of such a plan would not be difficult. Studying the previous records of his men, a manager or foreman could determine what each individual bogy should be. The employee should know just what the *record is that he is competing with, and that his success or failure would be recorded to his credit or otherwise. Above all, the bogy must be fair and within the power of the man to accomplish.

Competition need not be confined to individuals. Frequently one city finds a stimulus in competing with another. Nations compete with one another. In any organization one section may compete with another.

In an army there may be competition between regiments. Within the regiment there may be the keenest rivalry between the different companies. We are such social creatures that we easily identify ourselves with our block, our street, our town, our social set, our party, our firm, or our department in the firm. Like teams in any game or sport, these groups may be rendered self-conscious and thus made units for competition.

It is possible to create such units for competition in business organizations. In some instances individual employees of one firm are pitted against those of a competing firm, the contest proving stimulating to the men in both. In other instances the competition is restricted to the house, and similar departments or sections are the units.

The closer the parallel between the units and their activities, as in the Carnegie blast furnaces and steel mills, the more interesting and effective the competition becomes.

This principle has received widest recognition and achieved greatest success in the sales department. Here individuals are on a footing of approximate equality or may be given equality by a system of handicaps based on conditions in their territories. Success has also attended the pitting of selling districts against each other. These larger competing units work against bogies of the same character as do the individual ones. The whole house may be keyed up to surpass previous records or to attain some fixed standard.

To ascertain to what extent the principle of competition was consciously employed by business firms and what methods were used to apply it in increasing the efficiency of the men, a number of successful business firms were asked the following questions:—

How do you utilize competition in increasing efficiency among your employees?

(1) Do you regard it as unwise to stimulate competition in any form?

(2) Do you encourage men to excel their own records of previous years?

(3) Do you encourage competition between men in the same department?

(4) Do you encourage competition between your own departments?

(5) Do you encourage competition with departments of competing establishments?

(6) In competition do you make it fair by "handicapping'' your men?

What reward does the winner receive, e.g.:—

(1) Monetary reward?

(2) Promotion?

(3) Public commendation?

In answers by equally successful managers great diversity of opinion prevailed. Some men were afraid of all forms of competition.

They believed that coperation was essential to success and that any form of competition among the men tended to lessen such coperation. Most of the men interviewed believed that competition when wisely handled is very effective in stimulating the men.

Of course, most firms try in some way to encourage their men to excel their record of previous years. The inquiry developed, however, that a few are unwilling to employ competition even in this mild form as a means to increased efficiency. Most of the firms made conscious use of this principle and were convinced of its potency.

Competition between men in the same department was approved by a majority of the firms, and its adaptability to the selling department was especially emphasized. But some of the best houses will permit no such competition. The diversity in opinion was very pronounced in answering this question.

As to encouraging competition between departments in the same firm, no general answer is satisfactory. Organizations differ widely. In many houses such competition is not practicable; in others it certainly is not to be encouraged. In many organizations which would admit of such competition the experiment had not been tried. In others it has become a regular practice and is looked upon with favor.

In competition between members of the same department or between departments the danger of jealousy and enmity seems to be so real that the greatest caution has to be observed in managing the contests. When such caution is exercised, the results are ordinarily reported upon favorably.

As to encouraging competition with departments of rival establishments, the diversity of business makes general statements un- illuminating. Even where such a course is possible, some managers reject the practice as unwise. They believe that it is not best to recognize other houses or to consider them in this particular. A few firms report that they are able to stimulate their men successfully in this way, even though the conditions for such a contest are difficult to handle. Of those who utilize competition a few houses employ no handicaps to put their men on the same level and make success equally possible to all.

The principle of handicaps is so manifestly fair that organizers of contests can hardly afford to neglect this essential to the widest interest and participation in the competition.

If the little man in a country territory doesn't feel that he has a fighting chance to equal or surpass the man in the big agency, he makes no attempt to qualify. And the purpose of every contest, of course, is to get every man into the game.

Touching monetary rewards for the winners, there is practical unanimity of opinion. The winner should receive a prize in cash or its equivalent. Usually the effort is to distribute the prizes so that all who excel their average records receive compensation and recognition for the additional work. In many instances unusual increases in sales or output are rewarded by a higher rate of compensation.

That success in contests should influence promotion was generally agreed. The knowledge and energy shown are indications of capacity to occupy a better position.

The contest merely reveals such capacity; the promotion might well follow as part of the prize for the winner or winners.

Public commendation of winners in com- petitions is held by many firms to be bad policy. There is fear that such commendation might render the participant conceited and unfit for further usefulness. A majority of firms, however, give the widest possible publicity to such commendation. This, indeed, is the reward most generally used and apparently most keenly desired by employees. Reproduction of photographs of the winners in the house organ with an account of their achievements is the commonest acknowledgment of their success, though posting the names of the winners in various parts of the establishment is the method employed by smaller houses.

Many important houses use competition as part of their regular equipment for handling and energizing men.

Particularly is this true of manufacturers and distributors of specialties, patented machines, trade-marked goods and lines, and wholesalers whose travelers are selling in territories where conditions are generally the same. Several firms of this sort make con- scious and elaborate use of the instinct of competition in their ordinary scheme of management.

A concrete and typical illustration of its application to selling is afforded by the experience and the undoubted success of one of the largest specialty houses which distributes its products direct to the consumer. The sales force numbers about 500 men, and executives of wide experience declare that the organization is, of its size, the most efficient in the United States. Analysis of this company's methods is most illuminating and suggestive because every phase of the instinct of competition has been exploited to the advantage of both the house and its employees.

The medium of competition is a series of contests—monthly, quarterly, even yearly which bring into play all the motives urging individuals to maximum effort and industry desire to beat bogy, ambition to win in individual contest with immediate neighbors and against the whole organization, team spirit in the matching of one group of agencies against another group, and finally organization spirit in the battle of the whole force to equal or surpass the mark which has been set for it.

The first and basic contest here is that of the individual salesman against his bogy or "sales quota.''

This quota, the monthly amount of business which each agency should produce, has been worked out with great care and has a scientific foundation. Since the great bulk of sales are made to retail merchants, the possibilities of each territory are determined by reckoning the total population of all towns containing three retailers rated by commercial agencies. For normal months there is a standard quota, a little above the monthly average of all agencies the previous year, reckoned against their total urban populations. In "rush'' months, this quota is advanced from fifteen to forty per cent, as the judgment of the sales manager dictates. If general and trade conditions lead him to believe, for instance, that the month of May should produce $1,000,000 in orders, while the sum of the usual quotas is $800,000, he calls for an over- plus of twenty per cent. The territory containing one per cent of the total urban population of the country, as reckoned, would then be expected to make sales equal to $10,000. This would be the agency quota for the month, and the first and most important task of the agent would be to secure it.

Because all quotas, both normal and special, are figured on the productive population of the territories and standings may be calculated by percentages, it follows that all agents are on terms of equality.

This is essential in a contest for individual leadership as well as in team or organization matches. For at least eight months of the year, there is such a competition for the best selling record in the entire force. Variety is given to these contests and the interest of the men sustained by changing the terms of the competition. One month the chief prize will be given to the salesman who secures his quota at the earliest date; next month the award will be for the individual who first obtains a fixed sum in orders, usually $2500; leadership the third month will go to the man who gets the highest per cent of his quota during the entire period; again, the honor will fall to the agent whose net sales total the greatest for the month.

Further changes are rung and the inspirational effect of the contest immensely increased by enlarging the conditions so that every third or fourth agent is able to qualify for the month's honors and a prize.

Here, for instance, besides the prize for the first agent selling $2500, there will be prizes—like hats, umbrellas, and so on—for every man who closes $2500 in orders before the twentieth of the month, with the attendant publicity of having his portrait and his record printed in the house organ which goes to every agent in the field and every department and executive at the factory. Before leaving the individual contests, mention should be made of the "star'' club of agents who sell $30,000 or more during the year; the presi- dency going to the agent who first secures that total, the other official positions falling to his nearest rivals in the order in which they finish.

The team and organization contests are usually carried on simultaneously with the individual competitions. These range from matches between the forces of the big city offices, like New York, Chicago, and St. Louis, upward to district contests in which each team represents from thirty to fifty salesmen and finally to international "wars'' where the American organization is pitted against all the agents abroad. Challenges from one district to another usually precipitate the district competitions; once a year there is a three months' general contest in which all the districts take part for the championship of the whole selling force.

To announce contests is a simple matter; to organize and execute them so that they are of benefit is much more difficult.

Unless the interest of the men is focused on the contests, they are not worth while. To make them successful the firm under consideration utilized the following devices:—

During the contest the house organ appeared often and was devoted almost exclusively to the contest. In it the record of each salesman was printed, his quota, his sales to date, and other pertinent information. The sheet was edited by a "sporting editor,'' and great tact and skill were displayed in giving the contest the atmosphere of an actual race or game. In addition the sales manager, the district managers, and the house executives wrote letters and telegrams of encouragement, and even made trips to the agencies that got under way too slowly.

The unique feature of the contest was the manner in which the "sporting editor'' gave actuality to the contests by pictorial representations. One competition took the form of a shooting match. The house organ contained an enormous target with two rings and a bull's eye. When a salesman qualified with orders for $625, he was credited with a shot inside the outer ring and his name was printed there. With $1250 in sales, he moved into the inner ring, and when his orders amounted to $2500, he was credited with a bull's eye and his name blazoned in the center space.

Another contest was represented as a balloon race between the different districts. Each district was given a balloon, and as sales increased, the airship mounted higher. On the balloon the name of the district leader in sales was printed, while cartoons enlivened the race by showing the expedients, in terms of orders, by which the district managers and their crews sought to drive their airships higher. Each issue of the house organ showed the current standing of the districts by the heights of their balloons. This conception of the selling contest was very successful. "Going up—going up—how far are you up now?'' was used as a call, and it seemed to strike the men and inspire them. It became the greeting of the salesmen when they met, and irresistibly produced a feeling of competition and a desire to have the district balloon go higher.

Other ingenious fancies by which the contests were given the appeal and interest of popular sports was their conception as a baseball game, a football game, an automobile race, a Marathon run, and so on.

In providing prizes, the firm was rather generous, though the expense was never great. While the contest was in progress, all those who were really "in the running'' had the satisfaction of honorable mention, with their photographs reproduced in the house bulletin. This honor and publicity was the chief reward received by the great majority of contestants, and was adequate. Minor prizes were offered on conditions, allowing a large number to qualify, and tempting virtually everybody to make an effort to win one. The value of the prizes did not need to be great, for each man was impressed with the idea that his comrades were watching him, that they observed every advance or retrogression. Success in the contest meant "making good'' in the eyes of the other salesmen as well as in the eyes of his superiors.

This desire for social approval and the spirited comment of the editor had a marked influence on the efficiency of many of the younger salesmen.

These special contests were conducted chiefly during the "rush'' seasons, when activity and efficiency of salesmen meant greater returns to the house. Because of their varied forms the contests did not become monotonous, and thus fail in their effect. During the three or four "big'' selling months when special quotas were announced, an individual pocket schedule was mailed to each man, showing how much business he must close each day to keep pace with "Mr. Quota,'' the constant competitor.

The most industrious and ambitious men are stimulated by competition; with the less industrious such a stimulation is often wonder working in its effects.

For many positions in the business world a hypothetical bogy should be created after the style of the quota referred to above.

To increase the feeling of comradeship and promote coperation between the men the entire organization or single sections of it occasionally should be made the unit of competition. This is perhaps the most helpful form of competition, but it is hard to execute.

Valuable prizes should always be given to the winners. This "need'' may not necessarily be monetary.

Promotion should not depend upon success in contests, but such success may be well reckoned in awarding promotions.

Public commendation for success in competition costs the company little and is greatly appreciated by the winner. There seems to be no reason why the head of the house should not assist in the presentation.

The most essential factor in creating interest in a contest is the skill of the "sporting editor'' in injecting the real spirit of the game into each contest, thus securing wide publicity, and enlisting the coperation of large numbers of participants.

Prizes should be widely distributed, so that the greatest number may be encouraged.

A fair system of handicapping should be adopted in every case where equal opportunity to win is not possessed by all. Previous records often make successful bogies, and should be more extensively employed.

It is possible to carry on contests between individuals in the same department without jealousies, but skill is required to conduct them. There is the danger that individuals will seek to win by hindering others as well as by exerting themselves. Where it is not possible to carry on a contest and retain a feeling of comradeship between the men, no competition should be encouraged.



CHAPTER IV

LOYALTY

AS A MEANS OF INCREASING HUMAN EFFICIENCY

DELAYED by a train of accidents, a big contractor faced forfeiture of his bond on a city tunnel costing millions of dollars. He had exhausted his ingenuity and his resources to comply with the terms of his contract, but had failed. Because public opinion had been condemning concessions on other jobs on flimsy grounds, the authorities refused to extend the time allowed for completing the work. By canceling the contract, collecting the penalty, and reletting the task, the city would profit without exceeding its legal rights.

In his dilemma, he called his foremen together and explained the situation to them. "Tell the men,'' he said. Many of these had been members of his organization for years, moving with him from one undertaking to the next, looking to him for employment, for help in dull seasons or in times of misfortune, repaying him with interest in their tasks and a certain rough attachment.

He had been unusually considerate, adopting every possible safeguard for their protection, recognizing their union, employing three shifts of men, paying more than the required scale when conditions were hard or dangerous.

A score of unions were represented in the organization: miners, masons, carpenters, plasterers, engineers, electricians, and many grades of helpers. Learning his plight, they rallied promptly to his aid. They appealed to their trades and to the central body of unions to intervene in his behalf with the city officials.

How One Considerate Employer was protected by his Men

As taxpayers, voters, and members of an organization potentially effective in politics, they approached the mayor and the department heads concerned. They pointed out— what was true—that the city's negligence in prospecting and charting the course of the tunnel was partly responsible for the contractor's failure. They pleaded that the city should make allowances rather than interrupt their employment, and that the delay in the work would counterbalance any advantage contingent on forfeiture. They promised also that if three additional months were given the contractor, they would *do all in their power to push construction.

The mayor yielded; the extension was granted. And the men made their promise good literally, waiving jealously guarded rights and sparing no effort to forward the undertaking. The miners, masons, carpenters, and specialists in other lines in which additional skilled men could not be secured labored frequently in twelve-hour shifts and accepted only the regular hourly rate for the overtime. With such zeal animating them, only one conclusion was possible. The tunnel was entirely completed before the ninety days of grace had expired.

Here was loyalty as stanch and effective as that which wins battlefields and creates nations. It increased the efficiency of the individual workers; it greatly augmented the effectiveness of the organization as a whole. It was developed, without appeal to sentiment, under conditions which make for division rather than coperation between employer and employee. The men were unionists; wages, hours, and so on, were contract matters with the boss. Yet in an emergency, the tie between the tunnel builder and his men was strong enough to stand the strain of the fatiguing and long-continued effort necessary to complete the job and save the former from ruin. Like incidents, on perhaps a smaller and less dramatic scale, are not uncommon; but the historian of business has not yet risen to make them known.

Loyalty, to Nation or Organization, shows itself in an Emergency

As with patriotism, business loyalty needs some such crisis as this to evoke its expression. In peace the patriotism of citizens is rarely evident and is frequently called in question. In America we sometimes assume that it is a virtue belonging only to past generations. But every time the honor or integrity of the country is threatened, a multitude of eager citizens volunteer in its defense. Likewise, many a business man who has come to think his workmen interested only in the wages he pays them, discovers in his hour of need an unsuspected asset in their devotion to the welfare of the business, and their willingness to make sacrifices to bring it past the cape of storms.

Study of any field, of any single house, or of any of the periods of depression which have afflicted and corrected our industrial progress, will convince one of the unfailing and genuine loyalty of men to able and considerate em- ployers. So generally true is this, indeed, that "house patriotism,'' "organization spirit,'' or "loyalty to the management'' is accepted by all great executives as one of the essential elements in the day-by-day conduct of their enterprises.

Striking exhibitions of this loyalty may wait for an emergency. Unless it exists, however, unless it is apparent in the daily routine, there is immediate and relentless search for the antagonistic condition or method, which is robbing the force of present efficiency and future power. Coperation of employees is the first purpose of organization. Without loyalty and team work the higher levels in output, quality, and service are impossible.

Loyalty on Part of Employer begets Loyalty in his Workers

The importance of loyalty in business could not readily be overestimated, even though its sole function were to secure united action on the part of the officers and men. Where no two men or groups of men were working to counter purposes, but all are united in a common purpose, the gain would be enormous, even though the amount of energy put forth by the individuals was not increased in the least. When to this fact of value in organized effort we add the accompanying psychological facts of increased efficiency by means of loyalty, we then begin to comprehend what it means to have or to lack loyalty.

The amount of work accomplished by an individual is subject to various conditions. The whole intellect, feeling, and will must work in unity to secure the best results. Where there is no heart in the work (absence of feeling) relatively little can be accomplished, even though the intellect be convinced and the will strained to the utmost. The employee who lacks loyalty to his employer can at least render but half-hearted service even though he strive to his utmost and though he be convinced that his financial salvation is dependent upon efficient service. The employer who secures the loyalty of his men not only secures better service, but he enables his men to accomplish more with less effort and less exhaustion. The creator of loyalty is a public benefactor.

Such loyalty is always reciprocal. The feeling which workmen entertain for their employer is usually a reflection of his attitude towards them. Fair wages, reasonable hours, working quarters and conditions of average comfort and healthfulness, and a measure of protection against accident are now no more than primary requirements in a factory or store. Without them labor of the better, more energetic types cannot be secured in the first place or held for any length of time. And the employer who expects, in return for these, any more than the average of uninspired service is sure to be disappointed.

If he treats his men like machines, looks at them merely as cogs in the mechanism of his affairs, they will function like machines or find other places. If he wishes to stir the larger, latent powers of their brains and bodies, thereby increasing their efficiency as thinkers and workers, he must recognize them as men and individuals and give in some measure what he asks. He must identify them with the business, and make them feel that they have a stake in its success and that the organization has an interest in the welfare of its men. The boss to whom his employees turn in any serious perplexity or private difficulty for advice and aid is pretty apt to receive more than the contract minimum of effort every day and is sure of devoted service in any time of need.

The Effect of Personal Relations in creating Loyalty in a Force

It is on this personal relationship, this platform of mutual interests and helpfulness, that the success and fighting strength of many one- man houses are built. As in the contractor's dilemma already cited, it bears fruit in the fighting zeal, the keener interest, and the extra speed and effort which workers bring to bear on their individual and collective tasks. All the knowledge and skill they possess are thrown into the scale; their quickened intelligences reach out for new methods and short cuts; when the crisis has passed, there may be a temporary reaction, but there is likely to be a permanent advance both in individual efficiency and organization spirit.

On the employer's side, this feeling is expressed in the surrender of profits to provide work in dull seasons; in the retention of aged mechanics, laborers, or clerks on the payroll after their usefulness has passed; in pensions; in a score of neighborly and friendly offices to those who are sick, injured, or in trouble. A reputation for "taking care of his men'' has frequently been a bulwark of defense to the small manufacturer or trader assailed by a greedy larger rival.

Personality is, beyond doubt, the primitive wellspring of loyalty. Most men are capable of devotion to a worthy leader; few are ever zealots for the sake of a cause, a principle, a party, or a firm. All these are too abstract to win the affection of the average man. It is only when they become embodied in an individual, a concrete personality which stirs our human interest, that they become moving powers. The soldiers of the Revolution fought for Washington rather than for freedom; Christians are loyal to Christ rather than to his teachings; the voter cheers his candidate and not his party; the employee is loyal to the head of the house or his immediate foreman and not to the generality known as the House. Loyalty to the individuals constituting the firm may ultimately develop into house loyalty. To attempt to create the latter sentiment, however, except by first creating it for the men higher up is to go contrary to human nature—always an unwise expenditure of energy.

Human Sympathy as a Factor in developing Loyalty in Men

In developing loyalty, human sympathy is the greatest factor. If an executive of a company is confident that his directors approve his policies, appreciate his obstacles, and are ready to back him up in any crisis, his energy and enthusiasm for the common object never flag. If department heads and foremen are assured that the manager is watching their efforts with attention and regard, approving, supporting, and sparing them wherever possible, they will anticipate orders, assume extra burdens, and fling themselves and their forces into any breach which may threaten their chief's program.

If a workman, clerk, or salesman knows that his immediate chief is interested in him personally, that he understands what service is being rendered and is anxious to forward his welfare as well as that of the house, there is no effort, inconvenience, or discomfort which he will not undertake to complete a task which the boss has undertaken. Throughout the entire organization, the sympathy and coperation of the men above with the men below is essential for securing the highest degree of loyalty. No assumed or manufactured sympathy, however, will take the place of the genuine article.

Personal Relationship with Workers as Basis for creating Loyalty

The effectiveness of human sympathy in creating loyalty is most apparent in one-man businesses where the head of the house is in personal contact with all or many of his employees. This personal touch, however, is not necessarily limited to the small organization. Many men have employed thousands and secured it. Others have succeeded in impressing their personalities, and demonstrating their sympathy upon large forces, though their actual relations were with a few. The impression made upon these and the loyalty created in them were sufficient to permeate and influence the entire body. Potter Palmer, the elder Armour, Marshall Field, and Andrew Carnegie were among the hundreds of captains who made acquaintance with the men in the ranks the cornerstone on which they raised their trade or industrial citadels.

When the size of the organization precludes personal contact, or when conditions remove the executive to a distance, the task of maintaining touch is frequently and successfully intrusted to a lieutenant in sympathy with the chief's ideals and purposes. He may be the head of a department variously styled, —adjustments, promotion and discharge, employment, labor,—but his express function is to restore to an organization the simple but powerful human relation without which higher efficiency cannot be maintained. In factories and stores employing many women this understudy to the manager is usually a woman, who is given plenary authority in the handling of her charges, in reviewing disputes with foremen, and in finding the right position for the misplaced worker. Whether man or woman, this representative of the manager hears all grievances, reviews all discharges, reductions, and the like, and makes sure that the employee receives a little more than absolute justice.

Many successful merchants and manufacturers, however, disdain agents and intermediaries in this relation and are always ac- cessible to every man in their organizations; holding that, since the coperation of employees is the most important single element in business, the time given to securing it is time well spent.

Even though human sympathy may well be regarded as the most important consideration in increasing loyalty, it is not sufficient in and of itself. The most patriotic citizens are those who have, served the state. They are made loyal by the very act of service. They have assumed the responsibility of promoting the welfare of the state, and their patriotism is thereby stimulated and given concrete outlet. A paternalistic government in which the citizens had every right but no responsibility would develop beggars rather than patriots.

Similarly in a business house ideally organized to create loyalty, each employee not only feels that his rights are protected, but also feels a degree of responsibility for the success and for the good name of the house. He feels that his task or process is an essen- tial part of the firm's activity; and hence is important and worthy of his best efforts. To cement this bond and make closer the identification of the employee with the house many firms encourage their employees to purchase stock in the company. Others have worked out profit-sharing plans by which their men share in the dividends of the good years and are given a powerful incentive to promote teamwork and the practice of the economies from which the overplus of profit is produced.

Loyalty may be developed by Education in House History and Policies

The stability of a nation depends on the patriotism of its citizens. Among methods for developing this patriotism, *education ranks as the most effective. In the public schools history is taught for the purpose of awakening the love and loyalty of the rising generations. The founders, builders, and saviors of the country, the great men of peace and war who have contributed to its advancement, are held up for admiration. From the recital of what country and patriotism meant to Washington, Jefferson, Lincoln, Grant, and a host of lesser heroes, the pupils come to realize what country should, and does, mean to them. They become patriotic citizens.

Grounding the New Employee in Company Traditions and Ideals

In like manner the history of any house can be used to inspire loyalty and enthusiasm among its employees. Business has not been slow to borrow the methods and ideals of education, but the writer has been unable to discover any company which makes adequate use of this principle. That this loyalty may be directed to the house as a whole, and not merely to immediate superiors, every employee should be acquainted with the purposes and policies of the company and should understand that the sympathy which he discovers in his foreman is a common characteristic of the whole organization, clear up to the president. The best way to teach this is by example— by incidents drawn from the past, or by a review of the development of the company's policy.

To identify one's self with a winning cause, party, or leader, also, is infinitely easier than to be loyal to a loser. For this reason the study of the history of the firm may well include its trade triumphs, past and present; the remarkable or interesting uses to which its products have been put; the honor or prestige which its executives or members of the organization have attained; and the hundred other items of human interest which can be marshaled to give it house personality. All this would arouse admiration and appreciation in employees, would stir enthusiasm and a desire to contribute to future achievements, and would foster an unwillingness to leave the organization.