I recently took a tour of Kykuit, the Rockefeller family estate in Westchester County, New York. The tour of the impressive vistas, immaculately manicured grounds, and world-class art collection made it apparent that this estate was only made possible by the vast wealth of the Rockefeller family. John D. Rockefeller’s legenday business career holds valuable lessons for entrepreneurs and other business leaders, even 75 years after his death.
1. It’s All About the Numbers
Rockefeller’s first full-time job was as a clerk, and he spent his early career handling orders, accounts and other bookkeeping tasks for a Cleveland shipping firm. From this background, Rockefeller developed a legendary focus on the numbers of business — costs, sales, revenue and profits. Rockefeller, like the founders of many startups, knew that keeping costs as low as possible would maximize profits, and he maintained an intense drive to reduce the price of barrels, pipe, transportation and supplies. As an entrepreneur seeking to exploit new energy markets in the 1870’s, Rockefeller played railroads off against each other to attain great reductions in shipping costs, and then, when pipeline technology made more efficient transportation possible, Rockefeller set up a comprehensive pipeline system for Standard Oil, then used it to extract further concessions from the railroads.
While Standard Oil’s conduct was eventually found to violate antitrust laws, Rockefeller’s focus on the numbers generated sufficient profits early in his business career and consistently thereafter — in capital-intensive businesses — that he was able to grow his businesses through profitabilty rather than taking on immense amounts of debt or giving significant control to other investors.
2. Plan Thoroughly, Then Execute.
Rockefeller’s Standard Oil was built on dozens of acquisitions of oil producers, refiners and distributors over the years. In many of these transactions, Standard Oil actually overpaid for the business it was acquiring, but in most cases the additional payment brought strategic advantages that justified the price over the long term. In each of these acquisitions — as well as other transactions and major business decisions during his career — Rockefeller would study the numbers and thoroughly plan his strategy. When the time came to execute his plan, Rockefeller moved quickly and aggressively, without hesitation or doubt.
As General George Patton once said, “A good plan, violently executed now is better than a perfect plan next week.” For the entrepreneur, when it is time to move, you must execute quickly without hesitation. This is probably more true than ever in today’s mobile world where businesses transition rapidly and many knowledge-based businesses need relatively little capital.
3. Public Relations is the Public Face of Your Business
In contrast to many of his fellow tycoons, many of whom kept newspaper reporters on their payroll, Rockefeller did not keep a steady stream of public relations experts at his beck and call to polish his public image. Throughout his active business career, Rockefeller usually chose not to respond to public attacks on his character and his business. While his religious faith assured him that God would vindicate his methods and conduct, his silence in the face of public opprobrium allowed his critics, especially Ida Tarbell and her scathing critiques in McClure’s Magazine and later book “The History of the Standard Oil Company,” to write Rockefeller’s history on a blank public slate. By the time Rockefeller, in his late eighties, consented to being interviewed by a friendly biographer, his public persona — one of greed and ruthless business methods — had been etched in the public’s mind. This public image did him no favors during the earlier antitrust litigation that resulted in the breakup of the Standard Oil Trust.
In these times of social media and a viral news and marketing culture, any business that fails to proactively manage its public image is already behind the curve, letting its competitors set the agenda, risking being having its business story go untold — or worse yet, having someone tell the wrong tale. A comprehensive marketing and public relations strategy — something that Rockefeller found unnecessary because of his unprecedented business success and distasteful to his Baptist beliefs — can be vital to the success of a startup business. Entrepreneurs whose venture’s success depends on public’s accepting their story, believing in their mission and ultimately buying what they are selling can be well-served by public relations professionals.
In his focus on the hard numbers of business, including accounting and bookkeeping, his studied but unflinching approach to decision-making, and his uncharacteristically wrong choice to avoid public relations efforts, John D. Rockefeller can impart valuable lessons on today’s entrepreneurs and startup communities.
