Lead In 30 Podcast

What Happened In Dayton & How You Should Copy It

• Russ Hill

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Don't look to Detroit or Menlo Park, NJ. The answer to the most effective leadership revealed itself in Dayton. This is part two of two episodes about the industrial age and rise of the corporation. 

In part one we looked at the leadership styles put forward by Thomas Edison and Henry Ford. In this episode we look at what we uncovered from the same time period in Dayton, Ohio at a place called the National Cash Register Corporation.

John Patterson was the CEO and what he created at NCR is still being used at companies like Amazon, Google, Intel, Apple, and so many other innovative organizations today.

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The Lead In 30 Podcast with Russ Hill is for leaders of teams who want to grow and accelerate their results. In each episode, Russ Hill shares what he's learned consulting executives. Subscribe to get two new episodes every week. To connect with Russ message him on LinkedIn!



Speaker 1:

You won't find it in Menlo Park, new Jersey, or in Detroit, michigan. Nope, the most effective leadership style and approach. In order to find it, you've got to go to Dayton, Ohio. What in the world am I talking about? I'm glad you asked.

Speaker 2:

This is the Lead in 30 podcast with Russ Hill. You cannot be serious. Strengthen your ability to lead in less than 30 minutes.

Speaker 1:

Okay this episode. It's not going to make a whole lot of sense if you haven't listened to the last episode and that one is about Henry Ford and Thomas Edison. So if you just scroll back up you'll find it. It's the episode right before this one. You need to go back and listen to that one before you listen to this one, because I talk about this era. These two podcast episodes go together. This one is part two of the last episode.

Speaker 1:

That's part one and where we're talking about this golden era of industrial um growth, the, the birth, the growth, the advent of the corporation, of the large organization in america. And this was, of course, in that period of the late 1800s and the early 1900s, really talking about like from 1890 to about 1910, that 20 year period or so you might go to 1930, but 1890 to 1910 was remarkable because of the growth of organizations. Like everybody was just their own craftsman or their own thing. I mean they just did their own thing. And then all of a sudden, with the assembly line and with electricity and with corporations coming on board and manufacturing plants grow. I mean this industrial revolution, this industrial age, the incredible innovation. That's really when innovation? It's in that time period around there where innovation just exploded. We're still, in many ways, part of that era, of that just began back then. And so that's when the modern day manager, the modern day executive, like teams, went from maybe 10 or 20. I mean, there were a few large organizations before that, right, especially in militaries, you know, and in religions and things like that, but you didn't have huge companies. They just, by and large, did not exist. And so this is the time period where, like, people had to figure out okay, we've got hundreds or, in many cases, thousands of people joining these organizations. How the heck do we lead them? Like the workers, the employees didn't know how to be part of a large organization. These executives are what people who found themselves leading, like Henry Ford, thomas Edison, these people we were talking about in the last episode. They had no clue what they were doing. They're making it up as they go along, and in the last episode we talk about these two approaches that emerged, one in Menlo Park, new Jersey by the way, I just learned, there's a Menlo Park, california and it's in Silicon Valley. And so in the Menlo Park I'm talking about is New Jersey, where Thomas Edison was just on the other side of the river from Manhattan and we talked about that.

Speaker 1:

I'm not going to read, I'm not going to go through it again, but Thomas Edison's leadership style and the challenges that presented. It's why General Electric dropped his name from the title of the company. It's why he he just was not effective at leading large groups. His leadership was not scalable. What he preferred in his sweet spot and where he needed to be was with a group of 20 people. He preferred in his sweet spot and where he needed to be was with a group of 20 people.

Speaker 1:

And for some of you, that's you or you're or. You want to scale your leadership. You want to get promoted inside your organization, but you're running the organization like, in many ways, thomas Edison. Now, obviously there are differences, but you're just not. It's hard to scale your leadership. Others of you are leaning into the Henry Ford approach, which is just heavy handed. We talked about that first employee manual. The investigators like that's crazy what they were doing. I can't wait till you get the book, when we publish it in early 2025, and you're able to actually see this stuff. And you're able to actually see this stuff. You're actually able to see the pictures and images of this first employee handbook at Ford. It's insane Like it's unbelievable, anyway. So both those approaches are wrong. The most effective approach, which I told you about in the last episode, comes from Dayton Ohio. What was in Dayton Ohio? That's what we're going to dig into over the next 25 minutes or so.

Speaker 1:

This is welcome into the lead in 30 podcast. My name is Russ Hill. I make my living coaching, consulting senior executive teams of some of the world's most amazing corporations. I work, live, breathe, sleep in a leadership lab. This is my passion. This is what I do for a living. No one is the expert on leadership, but some of us just geek out on this and have been doing it for decades, and so that's where I so I'm. I'm with different executive teams all the time. That's what I do for a living. And so you start to learn models and frameworks and best practices and things that don't work. And uh and this is in. This is the podcast where I share that and uh, and so we do it in less than 30 minutes per episode, hence lead in thirties the name of the episodes you're interested. If you're interested in growing, strengthening your ability to lead others, you're in the right place. Put out two new episodes most weeks. And if you want to find out more about our 30 day leadership course, we only offer it to organizations where they put through um teams of managers. You can find out more at leadin30.com.

Speaker 1:

So all of this just to remind you that last episode, this episode, are coming from the research that our team is doing. I'm, I'm, I'm geeking out on all of this stuff and then checking in with our team and then giving them assignments and ghostwriters and different stuff. So, um, we had a, we had a two hour, an hour and a half call earlier today where we were going through some of this stuff and I'm showing them slide decks and we're going through images and they're telling me no, let's not lean into that, let's lean into this and let's do that and whatever, and uh, and so this is all for our book about what the content we teach in lead in 30. Um, we're finally at a place, four years into it, where we're ready to write the book and cause, we've got amazing stories all kinds of. We beat up these models and frameworks every single way possible. We put it in front of tons of different I mean tens of thousands of people and, uh, we've seen it work in different things, and so we're now ready to write a really interesting book about it. So let's talk about Dayton, ohio. So I'm going to contrast that, assuming you've listened to the last episode.

Speaker 1:

So what Ford was doing, I mean, was producing amazing results. Look at how the Ford Motor Company was growing. Look at, and what Thomas Edison was doing was producing amazing results from an invention standpoint. Now, so you can lean into either one of those the Henry Ford approach or the Thomas Edison approach, the Menlo Park approach or the Detroit approach, as I'm calling them in lead in 30. We call it the first leader. The second leader, thomas edison, was a first leader, absolutely sought consensus, struggled to make decisions, struggled to create structure and organization, to communicate clear priorities and vision just all over the place.

Speaker 1:

And for for some of you, that's how you lean. It's the Menlo Park, new Jersey approach. It's the Thomas Edison approach. You're probably brilliant, you're probably amazingly creative, you're probably amazingly effective, you're passionate, your people love you, all of that and you're struggling to grow. The organization and others of you. You lean hard. Second leader we call it the general Henry Ford, and others of you you lean hard. Second leader, we call it the general Henry Ford, like we're going to deliver. We've got all these metrics, we lean hard into that and you just struggle for the human side of business, which we're going to get into, and that's just a challenge for you. You're so driven. It affects engagement. It affects ideation and innovation. It affects retention. Sometimes it affects your. It affects ideation and innovation. It affects retention. Sometimes it affects your approachability. It has effects. It's limiting you in some ways. Can you deliver amazing results? Henry Ford did, but he also had strikes and he had riots at the plant and he had incredible competitors that gained massive market share faster than they probably should have been able to, could be argued, because of some of these challenges.

Speaker 1:

So now we're taking you to dayton ohio. You're like dayton ohio never even been there, isn't that like? Like what's in dayton? And a few of you have some ideas of a few things that are in dayton and but that's not. You're probably not going where I'm going.

Speaker 1:

Dayton Ohio was the precursor to the modern day Silicon Valley and by the end of this episode, in less than 30 minutes, you're going to. You're going to gain a whole history lesson that's going to blow your mind so interesting. The Googles and the Apples and the Amazons and the Microsofts and the all of that, the, the Intel, all of that was came out of Dayton. You can you can draw the org chart, you can draw the family history chart back to Dayton and here here we're going to go. So in Dayton, ohio, was an organization called NCR, n-c-r National Cash Register Corporation.

Speaker 1:

What A cash register company. Yep, the cash register was the original computer, totally, and so when you look at, when you look at the product line and the innovation and all of these things that were happening, it goes back to the cash register. These companies, that was their first form of technology really to interact with customers before computers. And all of that was the cash register. It recorded all of the transactions. It, it, it. It kept the money flowing. It organized like it had to. It had to, it had to work well and it had to innovate a lot. So national cash register company and a guy by the name of John Patterson. John Patterson bought, went in and got NCR. At the time he bought it, there were five salespeople. When John Patterson was done, there were 6,000 salespeople. Okay, when John Patterson got NCR, it was in one building. When John Patterson passed away, the NCR, national Cash Register had more than 20 buildings on its campus. It covered an enormous amount of acreage in Dayton Ohio. It was the biggest company in that area in the Midwest in that particular part of it and the executives that flowed out of it.

Speaker 1:

In a few minutes I'm going to share where they ended up and it's going to blow your mind and so. But the difference, what John Patterson did differently than Henry Ford or Thomas Edison at the same time this is in the exact same era of American history of world history same era of American history of world history, 1890, 1910, 1890 to 1920 ish was he did a lot differently. He, um, he discovered before really arguably anybody else at the scale he discovered it that you needed to focus on involving the workers rather than demanding things from them. So he, he demanded results. He was incredibly competitive, he was incredibly demanding. I mean he naturally leaned like toward Henry Ford style. He naturally was what we call the second leader, the general, very aggressive, very demanding, created some experiences I'll tell you about if we've got time in this episode that were unbelievable, terrible, but he tried to manage it. In fact, later in his life he said I regret many of those experiences he created when he was leaning toward the Henry Ford approach or the second leader approach. So let's walk through some of the things that John Patterson invented.

Speaker 1:

The first thing I want to talk about is the employee handbook, his first employee handbook. Do you know what the title of it was? The human side of an industry. That's the title of it. We've got a physical copy of the original. It's one of the things that I've been geeking out on going out to the market, finding collectors and getting a copy of it. I had to read it.

Speaker 1:

The modern HR, human resources department came out of John Patterson's thinking. It was born at NCR National Cash Register. So in this I mean the title of it is the human side of an industry. It was born at NCR National Cash Register. So in this I mean the title of it is the human side of an industry. And as you open it up he talks about how important it is to empower the people on the team. So he's building factories.

Speaker 1:

You guys, the cash registers of machines coming out of these are unbelievable. You can Google it or go into chat, gpt or whatever and look at some of the images of these cash registers. Unbelievable, I mean, they are. Just. These were the centerpieces of dime stores and barber shops and it was a status symbol of the store that you went into in the 1890s and the night, the early 1900s and the 1910s, that was so critically important. And so let's, let's go through this list. So he the employee manual, human side, that was his entire thinking was oh, not only do we need to scale this thing, but we've got to scale it in a way that people feel good about. Not only do we need to scale this thing, but we've got to scale it in a way that people feel good about. That leans into involving them and getting the best ideas out of them while focusing on performance. So I'm going to go through a long laundry list of things that he invented. It's unbelievable that he developed inside his company Sales training.

Speaker 1:

The whole concept of sales training came from NCR Google it, ncr primer. That was the initial training manual. No other company had done that. You did that on your own. You went and got trained on your own. You came to the organization during this era, you were what you were. Nobody trained anybody, and and so that, that that's what, um, in the last episode I talked about Frederick Taylor, the scientific management right. He was the one that talked about no, you need to train people, and Henry Ford leaned into that. But there wasn't sales training and so sales training started at NCR. He invented incentives and rewards for sales like that. The first record we have of that is from NCR.

Speaker 1:

He invented the concept of territories and regions. It did not exist anywhere else, that territory and region structure of sales organizations. You just think, oh well, that's a no brainer Like everybody does. That. That's just the way it is. Nope, wasn't before this. He invented the concept of sales scripts. There's just the way it is. Nope, wasn't before this. He invented the concept of sales scripts. There's no record of it. Chat, gpt had searched the internet, look for it. Sales scripts started at ncr national cash registers. So he built out this okay, what, what works. And he studied it and he, he leaned into the knowledge of his sales. People can rewrite these, build them better. How can we connect with the customer more?

Speaker 1:

He, he invented sales conferences. Nobody did that before him. No other organization ever had big meetings and he did it once to twice a year where they had all the salespeople travel in, started with just a few, then he had hundreds, then he had thousand and he's the one that started them in all different locations and they'd come to Dayton to be trained and obviously they weren't doing virtual meetings or anything else at that time. So they'd travel to Dayton. Then he'd send them back trained. They had a whole part of the campus in Dayton that was just for educating training. That didn't exist anywhere else. Sales conferences those of you that go to those meetings love them or hate them.

Speaker 1:

That, john Patterson, he invented it. He invented institutional or organization cultural beliefs or principles. Nobody had them before. These are a few of his Customer first principles. You're going to see where this, where this went after Dayton, right, customer first. Another one was called sell by showing. Another one was called train to succeed. Another one was called welfare pays dividends. Welfare means HR. That was the early name. You'd see welfare departments inside organizations. That's the name they had for HR. What became human resources? That's the name they had for HR. What became human resources? The employee welfare or personnel department? John Patterson started that. That's where it really grew. And so there's a lot more I could say to, but we got to keep this to 30 minutes. He invented get this, the corporate cafeteria. You can't find records of it anywhere else, decided we need to have many and had like five or six of them across the campus. As the organization grew he invented corporate daycare. I'm not talking about for the executives well I am but but for their kids, right? So he invented having on-site these different facilities that you now. That became super popular in silicon valley. That idea wasn't born in silicon Valley. Google didn't start.

Speaker 1:

That John Patterson did in the 1910s. He focused on a beautiful corporate campus. Nobody else cared about that before John Patterson. In that era he was like we need green space, we need lush grounds, we need trees, we want it to be beautiful. This whole experience and um, you see I, there are postcards and all these. There are books written. There are literally books written by people who visited NCR, the campus, and then would write books about it. He did. He did all kinds of um tours for executives from other companies, from leaders of business that would travel to Dayton to study what they were doing. It's just super crazy.

Speaker 1:

And at the height of National Cash Register, as Patterson built this kind of a culture, this kind of an, an organization, guess what their market share was in the cash register industry 90. He dominated the industry and so now, that wasn't his natural style. In fact, time magazine within the last couple of decades they put out a list, like some writer at Time magazine online put out a list of the I think was on Bosses Day. This is like a blog, not in the official magazine, because I don't Does Time even publish a magazine anymore. If they do, does anybody under 80 buy it? And so I hesitate to even give any credibility to it. But in our research we found this list of the 10 worst corporate executives ever in the history of America, and John Patterson's name was on it. Whoever wrote that blog for Time magazine is an idiot Like they are so uneducated on what they're saying.

Speaker 1:

Yes, in his core he had some challenges. He leaned into Henry Ford style, and I'll give you a couple of examples. Let's talk about his weaknesses. He would berate people. Sometimes he would do public firings of executives, like he'd make a spectacle of these individuals. One of the most famous and notorious ones was somebody who I'm going to tell you about in a moment.

Speaker 1:

He went on to be a to, to, to found a company that all of you know the name of, and he was one of John Patterson's um most relied on most closest executives working to him and when he fired him he, the guy, showed up for work on the campus and the I know for a fact because I found multiple sources, original sources, that say the guy showed up on campus and his desk was on the lawn. So he shows up and he notices his desk is outdoors. He obviously knew that he was fired. There are some accounts but I don't know if they're totally true or not um, where the desk was on fire there. There are multiple accounts where they said he actually had a team member set the desk on fire and some people that said that's what made the term fire, getting fired get even bigger or more well-known.

Speaker 1:

I don't know if that's true or not, but I do know for a fact, because there are multiple sources, that he, not only that time but other times would put the desk outdoors. He also had this area called the Siberia office and he would move certain leaders desks, have them moved to the Siberia office, which meant, okay, yeah, you're in deep trouble. Like there was just humiliation and he talked about later in life. He deeply regretted that and he shouldn't have done it. Later in life, he deeply regretted that and he shouldn't have done it, and so did he lean toward the detroit approach, the henry ford approach, this what we call second. Absolutely, you'll find all kinds of records, but that was his week. That was like his default state and it didn't truly reflect who he was trying to be right, who he was trying to be right, who he was trying to be. My belief, studying it, just look at the employee handbook, look at the experiences, look at the videos and the books and the pamphlets that were produced by people, people who spent five decades there. This is the sort of stuff that we've researched, that we've looked into and, by and large, patterson was trying to lead differently and the results were incredible. So what came out of NCR? Not only did they gain incredible market share, not only did they sell the company NCR to AT&T modern day AT&T for billions of dollars, modern day at&t for billions of dollars, um, but the, the executives and the, the, what happened? The level of talent that he was able to attract and retain and grow at his organization is incredible. The, the founder of ibm, came from there. Ross per Sr worked at NCR and went on to Texas and did what he did. You can see through direct or indirect connections, so people who would leave and institute it somewhere else and then someone else would find out about it and it would spread through that kind of indirect way.

Speaker 1:

You find Patterson's influence at organizations like general motors. What the, the founder of general motors, the, some of the senior executives at general motors came from ncr. They, they were, they worked there, you. You find it in intel and in what andy grove did you find it in um? Other organizations like amazon and the leadership principles that jeff bezos, they date back to. They are connected to, in fact, one of the very first leadership principle. That's the core of the culture at amazon. If you know anything about amazon, you know the leadership principles are core of that organization and customer obsession is the first one. Where did they get that idea? Patterson customer first, such a core part like the, the, the effect that Patterson had in Silicon Valley and the way those structure, those organizations are structured, with key results. And these, these core principles, and and and support the employee and create an environment where they can innovate and ideate and make them feel like that.

Speaker 1:

All came, that all flowed out of the 1890s, early 1900s, from Dayton, ohio. Google it research it. We've spent gobs of hours on it. That's where it came from. The first Google, first HR department and it was national cash registers. Who thought of it?

Speaker 1:

John patterson so yeah, in his most human, in his weakest moments jerk in many ways I mean, when he got worked up, he was so driven I don't think he was a jerk in in in, like, just naturally I just think he was so driven, so, so competitive, had such urgency that he'd sometimes lose his mind over things and he regretted it and he should have done that when he was his best. What he was naturally trying to do was create the human side of industry. So that's where it flowed out of. So the point is, as you think about, as you think, about the way you lead others. There's so much more, you all, that I can say, like when we were meeting with the lead ghostwriter on this today, like I'm just like man. There's so much and we can't write a whole book on this. We this needs to be a chapter. And so we're going to do a chapter on Menlo park, new Jersey, and Henry Ford and all those connections and have you think about, have the reader think about that, and then the next chapter is going to be about.

Speaker 1:

No, the answer is in Dayton, ohio and John Patterson, and so we were beating that up and looking at all the different stuff and what can we fit in there? There's so much that I could say, but the real takeaway is this how do you lead which one of these approaches? And you can date it back, you can connect it back. The modern day thinking is really these three different approaches. There's so much to be said about it and it all starts in these. I mean you can date it back to the 1890s, to 1905. Want to be over there, just, you want to be well-liked, you want to come up with ideas and you want to just kind of do your stuff and you're going to have some success and good things are going to flow out of it, and and and and. For some of you it's the right approach but it's not going to scale. That's why it was general electric and not Edison electric.

Speaker 1:

He, like Thomas, edison, wasn't, that wasn't. He wasn't built to lead large groups. He never had a huge corporation of a Ford Motor Company or an NCR in Dayton. He didn't grow that. That didn't speak to him and he didn't go to it. And some of you, that's you and so you just got to. You got to say, ok, that's me, I'm just going to kind of do this and that's it. This is the size of team, I'm going to max out.

Speaker 1:

And others of you, you lean that way. That's how you show up right now. But you don't want to like, you want to scale, but you naturally lean that way. Well, you've got to lean more into Dayton, ohio. You've got to lean more into the Patterson approach. You've got to be more driven. You've got to define the results. You've got to clear, clearly communicate that vision to people, and so you're good at kind of this human side If you're the first leader of the Edison or Menlo Park approach.

Speaker 1:

But you've got to lean a little bit more into the Henry Ford approach, right, more driven and system, systematize it. And you, you, you, that that's the way you need to go. For others of you. You're Henry Ford, you've got Detroit in your blood and you're too harsh and you're too driven by the systems. And and you're you gotta, you gotta take. It's not that you take your foot off the gas, it's that you realize it's not just about you. You've got to empower these other people. You've got to bring them along with you. You've got to create the right experience for them.

Speaker 1:

And so, for John Patterson, a lot of those things mattered. And why did he do them? It's not about a cafeteria, it's not about trees on a acre, like who cares about that. That's not what he was going for. It was this belief that I want to create a great experience for people, and so I'm going through kind of the structure of it. But the training and the development, and all of that is what I what I'm trying to get at.

Speaker 1:

Patterson understood that he needed to, he needed to upgrade his people, he needed to bring them along with him. He was the, the one that was driving the vision and and and all of that, but but he knew he knew he needed to bring these folks along. That's the approach in dayton that I'm getting you to think about. We call it the third leader in lead in 30. So it's so fascinating you all to me to look back in history and realize we're dealing with the same struggles, the same generalized approaches, and really the only thing that's up for debate is who are you and how are you going to show up? The answer, the most effective approach, is in Dayton, ohio, and I'll talk to you in the next episode of the Lead in 30 podcast.