Thursday, November 03, 2005

Rockefeller's 39 Drops of Solder

I have been spending some time with a very exhaustive (and sometimes exhausting) biography of John D. Rockefeller. He is one of the most fascinating business icons of all time. Starting from zero, he built an incredible business empire in the oil industry, long before there were automobiles to really fuel the industry (Oh, how cute! A little pun!)

John D. is one of the most respected and the most hated business tycoons who ever walked the earth. Some of his business practices were incredibly ruthless as he stamped out his competitors by fair means and foul, all the while living his personal life as a very pious and generous man. A wolf by day and a sheep by night. He really is a fascinating character study.

Here is an example of the tremendous business acumen of John D. Rockefeller. John D. would visit his various plants to check out how things were operating. He carried with him a small red notebook in which he noted deficiencies or inefficiencies no matter how small. When a manager or worker saw the red notebook come out, they cringed. John D. would make a note of any shortcomings and would follow up to make sure they were taken care of.

One day he was visiting a plant that put kerosene in tin jugs for export. As he watched the process, he noticed that workers always put 40 drops of solder on each can to attach the top. He asked, “Have you ever tried 38 drops of solder?” When the manager replied that they always did 40, John D. said, “Try 38 and let me know what happens.”

When they experimented with 38 drops of solder, a small percentage of cans leaked. When they tried 39 drops of solder, the cans held tight. That small change saved the company $2500 the first year and hundreds of thousands of dollars over the course of time. And that was just one of the many, many areas of his business that John D. worked to improve.

Take a lesson from the master, look at your business to see what changes you can make to plug leaky holes, overcome inefficiencies, cut costs, or increase sales. I can’t promise you’ll be as r i c h as Rockefeller but small improvements have a way of dropping to your bottom line in a big way.

Until next time,
Caroline Jordan

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