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Next, he made them look and act the part. "Nothing denotes the gentleman more," Patterson wrote, "than earnestness and politeness." NCR salesmen were to inspire customer confidence by staying in the best hotels and dressing with fashionable dignity. Suitable manners followed. When calling on customers, salesmen were instructed to forgo cigars and backslapping, and "answer even the most stupid questions pleasantly."
Finally, Patterson supplied those answers. In 1887, his best salesman, joseph H. Crane, confided that his success came from giving every prospect the identical sales talk, with all points made in proper sequence. Patterson had Crane's presentation taken down verbatim; from it, he developed the first "canned" sales talk. Later on, he formalized this instruction, using Crane to direct the first sales training school. The central selling message was this: "A National Cash Register is not an expense, because it pays for itself out of the losses it prevents." This theme was repeated in the original 16-page NCR selling primer. Aptly titled "How I Sell a National Cash Register," the publication helped salesmen memorize and overcome objections. For example, if the merchant "can't spare the money," the proper response was: "Which money-, . . . all we ask you to spare is the money you lose now."
There were appeals to suspicion: "Well, Mr. Blank, you seem to trust your employees . . . but tell me through which a man loses money-the ones he trusts or those whom he
Appeals to order: "Do you mistrusts," know what department of your store pays you most? What charge was that you failed to put down today? Why not systematize your business so you can work days and rest nights?" And appeals to vanity: the receipt the cash register issued, merchants were told, could carry free advertising and could even show a likeness of yourself."
The salesmen resisted regimentation. So in 1892, Patterson took to the road, visited 50 cities in 51 days, and brought the men to heel through the power of ridicule and the promise of reward. The tour was prompted by his expectation of hard times. He subscribed to the Cast-iron Rule, a notion popularized by a Midwestern farmer, which held that a business bust was invariably preceded by a drop in scrap metal prices. In 1892, those prices were falling. With the Panic of 1893, Patterson's sales ideas and his prophecy were vindicated. Six hundred banks failed, 15,000 businesses went bankrupt, but NCR-trained to Patterson's methods and braced by his warning-rang up record sales.
He kept pushing. In 1900, each sales district was given a formal quota. This, if met, brought invitation to another Patterson innovation, the sales convention, then as now Part circus, part camp meeting and part Chautauqua." System supported success: cash register sales, barely 1,000 in 1886, reached 15,000 in 1892 and 100,000 in 1910. The following year, NCR sold its millionth machine.
The Panic of 1893 would set off a four-year depression. Coxey's Army marched on Washington, D.C., Socialist Eugene Debs battled Pullman, and at NCR, worker resentment began to include minor sabotage and even arson. In 1894, a $50,000 shipment of cash registers was returned from England as defective-acid had been poured into their mechanisms. With typical directness, Patterson moved his office to the factory floor to learn why. It proved a minor epiphany. The employees, Patterson said later, "did not care whether they turned out good or bad work. Then I looked further into conditions and I had frankly to confess that there was no particular reason why they should put heart into their work." The problem was 19th-century industrial-its dark, its dirt, its low wages, its lack of recognition or chance of advancement.
Patterson granted a general wage increase, removed debris, added ventilation and shielded dangerous equipment to protect his workers. Dressing rooms and showers, available for use on company time, were introduced. A factory cafeteria serving subsidized hot lunches was opened. Free medical care was provided at an NCR dispensary. Patterson showed his usual concern for detail. Every six months NCR employees were measured and weighed; those found underweight were issued free malted milk. Combs and brushes, sterilized dally, were available for grooming and, on rainy days, company umbrellas were distributed to home-ward-bound female workers.
At the same time, Patterson had architect Frank Andrews recast NCR in well-separated, steel-framed buildings with walls 80 percent glass. The glass, eventually eight acres of it, let most work be done in natural light. Retaining landscape gardeners John and Frederick Law Olmsted, Patterson then filled the open spaces with park-like lawns, trees and plantings.
Workers, Patterson said, also needed something to stimulate ambition." In 1894 he introduced industry's first paid "suggestion" system. But he maintained that the best stimulation was knowledge, "not merely knowledge of work, but general knowledge of what is going on in the world." NCR opened an employee night school, established a circulating in-house library and inaugurated a program of free lectures and concerts.
A visiting journalist viewed the results of Patterson's efforts with distaste, telling one executive, "I can't see that you people are any better off than kept women." The more usual accusation was "paternalism." In truth, Patterson, the friend of labor, thought labor unions should be reserved for employers less enlightened than he. Still, the charge of paternalism-of things bestowed-came largely from Patterson's fellow factory owners, men who themselves made rather a point of bestowing nothing. Reformers generally praised.
Patterson insisted that he wished his efforts copied, not praised. To that end, he opened his factory to visitors, up to 30,000 a year, many of whom he lectured on his methods. He disclaimed sentimentality. His welfare program, he said, had nothing to do with charity. It cut turnover, raised productivity and reduced shoddy work. His motivation was proclaimed throughout the plant on placards that read, "It pays."
Patterson cast his net broadly. "The NCR Weekly," a house organ, was, its masthead stated, "Published in the interest of all concerned in all the NCR Companies. Owners, Makers, Office Forces, Sellers, Users, Nonusers, Clerks, Cashiers, Customers, Servants, Children and others, if there are others." Indeed, only two groups permanently escaped the grasp of Patterson's benevolence: his competitors and his executives.
Patterson trained thoroughly. He arguably had the best-orchestrated production and sales system of the time, and in the days before MBAS, it was to NCR that bright young men headed to learn how to run a business. Patterson paid well all down the line and dizzyingly at the top. In 1921, one 30-year-old executive reported total compensation of $50,000, undiluted by inflation and all but untouched by taxes.
For the ambitious, there was another lure. Given the frequent firings, there was always room at the top. At times, the dismissal of NCR executives took on the character of a regular procession. Patterson's dictum was simple: "When a man gets indispensable, let's fire him." Rarely did he wait that long. A subsequent NCR chief executive cited in his autobiography a magazine's claim that between 1910 and 1930 one-sixth of the nation's top executives had been trained-and fired-by Patterson. Dismissal came without warning or recourse. "There are just two things," Patterson would tell the soon-to-be-discharged. "Everything you say is wrong. Everything you do is wrong."
Those who remained were hardly unscathed. When executives were absent, Patterson periodically dumped the contents of their desks into the trash, permitting them, as he put it, to start clean." When executives were present, they were subject to an unceasing flow of presidential memorandums by which Patterson sought to regulate their behavior, from the width of their ties to the percentage of the tips they gave.
Few areas of life escaped Patterson's attention. If pepper harmed the lining of the stomach, then it was banned from the officers' dining room. If horsemanship helped to develop a sense of mastery, then all company executives would be rousted before 6 for a morning trot.
Patterson's advice carried well beyond the confines of NCR. For years, he volubly advocated municipal reform in Dayton, an end to patronage, better schools and the building of parks. His admonitions were largely ignored. Finally, in 1907, when he learned that the railway spur he wanted would not be laid without bribes, Patterson decided to act. He convoked a meeting of a thousand local leaders, telling them, "Dayton is known now, and justly, too, I believe, as being the worst city in the state." He used a slide show to illustrate the city's ill-its dumps, its dying canal, its absence of amenities. Next, he displayed the faces of those he held culpable-many of them present-and calmly ticked off their misdeeds. Finally, the punishment: NCR would quit Dayton, taking its factory, its 3,800 jobs and its $4 million annual payroll to the East, where it would enjoy lower tax rates, better transportation and "have higher class visitors."
The Dayton Daily News-edited by James M. Cox, later governor and Presidential nominee-was reduced to ridiculing the affair. The paper ran a mock ad that announced a "Grand Meeting at the Glue Factory," complete with "hot tea and hot air."
The ensuing feud was further complicated when Patterson's eccentricities prompted a split at NCR. The cause was Charles Palmer, a diminutive ascetic whom Patterson acquired in England, brought to Dayton as his personal trainer and placed on the company's board of directors.
Palmer claimed the ability to read faces. Intrigued, Patterson sought reports from him on his executives, a number of whom were subsequently fired. Palmer followed with a series of diet and exercise edicts, one of which banned certain foods-including bread and butter, tea and coffee, salt and pepper-from sales meetings. Hugh Chalmers, the NCR vice president, who had worked his way up from office boy, tried to have the order rescinded. Patterson fired him, along with most of the top sales executives.
The firings prompted fresh criticism in the press. Patterson responded with a slew of lawsuits. Then, ostensibly to gain time to pursue them, he shut down his factory, throwing thousands of workers off the job. The NCR president rode out the public furor. The jokes at his expense soured as those he'd idled remained out of work, placing a drag on Dayton's economy and giving Patterson the upper hand. More serious was the matter of Chalmers. The fired vice president departed vowing, "I will not be even with the old man till I put him behind bars." In the end, Chalmers, who went on to found the Chalmers Motor Car Company, would come within one natural disaster of succeeding.
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