As president of General Electric, Gerard Swope expanded GE's consumer product offerings: The company sold its first electric clothes washer and refrigerator under his leadership. GE's foray into home appliances paid dividends for generations. He also oversaw the creation of the GE Credit Corp. to help finance the sale of appliances. GE Credit paved the way for consumer lending in the U.S., growing into GE Capital, now a $64 billion financial services giant. But his major legacy was in labor relations: Swope instituted "corporate welfare," a widely replicated program in which workers were offered benefits such as profit sharing.
Josiah Wedgwood became the 18th century's most famous potter through innovative, artistic products and a lean production system. But what really differentiated Wedgwood was his brilliant marketing strategy. Centuries before Arnold Schwarzenegger got into his first Hummer, Wedgwood understood the value of celebrity endorsements. Once his wares started being used by Queen Charlotte, Wedgwood exploited his status as "Potter to Her Majesty" by increasing prices for the nobility. His efficient manufacturing methods allowed him to then lower his prices for middle class clientele. Despite their attainability, the artistry of Wedgwood's products guaranteed that they were still coveted by the wealthy.
Edward H. Harriman was a railroad investor extraordinaire. He snatched up underperforming railroads and poured money into them to make them more efficient and profitable. The Oxford Encyclopedia of Economic History notes when he laid track, he used fewer curves, lower grades and better roadbeds, enabling railroads to run more powerful locomotives and cars with greater capacity. His biographer, Maury Klein, notes that Harriman's risky strategy of shipping high volume at low rates scared other managers. But it was the wave of the future. Harriman perfected a template of American capitalism: improving underperforming businesses by pouring capital into them. He also helped railroads remain efficient enough to compete with the coming threat from trucking. Toward the end of his career, he and James J. Hill forged the vast Northern Securities railroad empire, which was dissolved by the Supreme Court in 1904.
James Watt invented the condensing steam engine, but his partner, Matthew Boulton, marketed and manufactured it. Boulton encouraged Watt to expand the application of the engine, which was originally used just for pumping and mining work. In 1783, steam engines started to be installed in textile factories. A few years later, Boulton applied steam power to minting coins. Historian G.N. von Tunzelmann notes that Boulton's manufacturing system was the reverse of mass production, with multiskilled fitters making custom-made one-off machines--a system used today only for highly complex product systems in large-scale engineering. Boulton's innovations in currency production gave birth to the modern coin, reducing the counterfeiting that was rampant in his day.
Promising "satisfaction or your money back," Aaron Montgomery Ward founded the first mail order catalog in 1872. His use of installment payments made it much easier for modest-income families to buy expensive items. The downside? Consumer debt. Ward's business had social implications too, such as catering to Southern blacks who were shut out of whites-only stores and created a consumer culture in rural America. Ward was able to persuade his customers to take an enormous leap of faith: Fork over cash for products that they had only seen pictured in his catalog. He gained their trust by using guarantees, providing exceptional customer service and writing catalogs with clever, catchy sales pitches. Ward's trustworthiness allowed his product offerings to grow from 163 items to 10,000 in less than 10 years. In essence, Ward's business laid the groundwork for companies such as Amazon, Hotels.com and The Home Shopping Network.
By offering accessible, concise, image-driven news, Henry Luce invented the modern magazine and, in fact, set the template for all modern news media. Over the course of his career, Luce founded Time, Life, Fortune and Sports Illustrated magazines. Luce appreciated that educated postwar Americans were dependant on news--but had limited time to digest it because of increasingly demanding schedules. Time was written for them. The streaming news headlines that scroll across the bottom of the screen on cable news networks is Luce's idea updated for the 21st century. The drama of television news magazines echo Time's engaging--some would say overcooked--style. And no medium more loudly echoes the made for the consumer style of news that Luce championed than the Internet.
This British grocer put individual hunks of soap in pretty wrappers and named them Sunlight. Before then, shoppers would buy soap by asking store owners to cut up long bars into smaller blocks. When copycats imitated William Lever's immensely successful ploy, he began branding Sunlight as the soap of the working woman, claiming, among other things, that it helped preserve their youth. It was one of the first brands in the modern marketing sense. Though a tech juggernaut such as Apple Computer wants us believe that it thinks differently, its marketing strategy was cooked up a century ago by a British grocer.
Sakichi Toyoda was a weaver who, in 1924, invented a loom that would detect an error and automatically cease production, preventing the creation of defective goods. He later sold the patent on his machine to a British firm for about $150,000. That money was used to help his son found a start-up, Toyota, which would become the world's second-biggest carmaker. Toyoda's innovation of instilling human judgment on machines, also known as automation or Jidoka, would be adopted to his son's automobile enterprise--and then almost every industrial enterprise--cutting down on waste, improving customer relations, revealing problems and conserving resources.
As President of General Motors , Alfred P. Sloan attacked Ford Motors' dominance by offering customers what Ford refused to: a wider selection of cars, available in different colors, with updated models annually. Sloan also improved relations with labor and dealers. His financial policies and technological investments paid off: Even during the Great Depression, when car sales fell by 75%, GM remained profitable. Sloan led by persuasion, listening to his executives, workers, dealers and customers to improve production and give customers what they wanted. As historian Harold Livesay said, Sloan "bureaucratized the entrepreneurial function." In other words, he preserved creativity and risk-taking in a far-flung, multi-tiered business empire. Although Ford was the pioneer, Sloan's superior management techniques brought the car business into modernity.
Henry J. Kaiser helped invent the modern West, providing energy, roads, bridges and jobs for what would become the country's major economic engine. Among the projects he constructed or helped construct: the Los Angeles Aqueduct; the Oakland-San Francisco Bay Bridge; and the Hoover, Parker, Shasta and Grand Coulee dams. The inexpensive, quick-to-produce "Liberty Ships" built at his shipyards helped win World War II. But perhaps his greatest feat was providing his workers with health care coverage. Kaiser saw his prepaid health coverage plan as a way to temper labor unrest and leave the government out of the process, while bettering humanity. He made public campaigns haranguing fellow business leaders to follow his lead. Kaiser's vision spawned the U.S. health care industry.
Alfred Nobel didn't just invent dynamite, he capitalized on his idea by founding 16 explosives plants in 14 countries. When competition arose among them, he merged them. Two holding companies--the first of their kind--were formed, coordinating everything from production to sales to acquisitions. Historian Ragnhild Lundstrom credits Nobel's creative fusion of his businesses as a template for how to organize a global empire. Dynamite had an enormous impact on the world, both for good--facilitating the construction of tunnels, railroads and canals--and for ill--high-explosive shells dramatically increases warfare's carnage. But perhaps Nobel's most enduring legacy is the annual prizes given in his name for peace, physics, literature, chemistry, economics and medicine.
The founder of McDonald's (nyse: MCD - news - people ) revolutionized the way the world eats. Ray Kroc brought Henry Ford's secret of success to the kitchen, making products that were uniform, inexpensive and quickly manufactured--not to mention tasty. "The french fry," Kroc wrote, "would become almost sacrosanct for me, its preparation a ritual to be followed religiously." Kroc perfected the chain concept. Customers could expect the same menu, clean environment and paper hats at a McDonald's in Wesport, Conn., that they'd find at a restaurant in East L.A. Dining out become a more frequent, casual experience, perfectly tailored to the schedules of strapped for time postwar Americans. It is believed that one-fourth of Americans eat fast food each day. But convenience eating comes at a price: McDonald's must be held at least partly responsible for the supersizing of American waistlines.
Walt Disney founded the first modern media conglomerate, exploiting the ripeness of the children's market as no one had before. Like today, where the latest computer animations are more important in selling a movie than the story line, Disney made bold, expensive risks to add impressive technological achievements to each film. Example? Steamboat Willie, which introduced America to Mickey Mouse. Disney also pioneered the use of sound and color in motion pictures. His stable of fictional characters, which included Mickey, Minnie Mouse and Donald Duck, generated additional profit by appearing in advertisements, books and merchandise. Disney fare next appeared on television, another profit engine. In 1955, he launched Disneyland, the first theme park. Walt Disney World followed in 1971. The theme parks were a brilliant, natural extension: They boosted profit, boosted the brand and served as a platform to promote the other media.
Meyer Amschel Rothschild helped invent modern banking by introducing concepts such as diversification, rapid communication, confidentiality and high volume. The superlatively discreet foreign-exchange banker diversified from the very beginning, selling antiques and procuring loans. Remarkably, Rothschild was willing to cut into his own profits in order to secure future business. And, earlier than most, he understood that time and information meant money, and he pulled out all the stops to remain in constant contact with associates across Europe. That network came in handy when he helped finance England's war effort during the Napoleonic Wars. Rothschild institutionalized his bank with a far-sighted will that ensured the continuation of his business. Considered a founding father of international finance, his banking empire--thanks to his five sons--had expanded to London, Paris, Vienna and Naples at the time of his death.
In the early 1960s, Thomas Watson Jr. bet the future of the company his father made great, International Business Machines, on the success of computers in the workplace--then a revolutionary concept. He invested $5 billion developing the IBM System/360, a "family" of computers that gave customers the option of starting small and graduating to bigger computers as their needs grew. In 1969, IBM began selling hardware, services and software individually rather than as a package deal, giving birth to the multibillion-dollar software and services industries. Although IBM notoriously missed the personal computing revolution in the early 1980s, the current ubiquitousness of computers in the workplace has its origins in Watson's gamble.
Sam Walton didn't invent the idea of the discount store, he just perfected it. His embrace of information technology and supply-chain management allowed him to dramatically undercut his competitors, and this remains a model for how to blend old and new economies. At a Wal-Mart store, cash registers are electronically linked to headquarters and suppliers. The chain, which is by far the biggest retailer in the world, has been universally blamed for killing mom-and-pop stores but, perhaps more significantly, it has left more dollars in shoppers' wallets and spurred an economy that is 66% dependent on consumer spending. The chain is America's largest employer, giving work to more than 1.3 million people. If Walton were still alive, his personal fortune would far outstrip Bill Gates.
Historian David Surdam credits Andrew Carnegie for nothing less than being the principal figure behind America's transformation from a rural agricultural country into an industrial power. He helped make the U.S. the world's leading steel-producing country, partly by gauging efficiency of management with individualized records that compared cost to output. Carnegie's knack for novel techniques was so deep, according to the late Northwestern University economic historian Jonathan R.T. Hughes, that he once started a board meeting with the sentence, "Well, gentlemen, what shall we throw away this year?" Carnegie mistreated most of his workers, but thanks to their meager wages, steel was cheap and the country could afford to build its infrastructure. And by hiring thousands of middle managers, as well as professionals such as clerks and chemists who earned several times the salary of factory workers, Carnegie greatly expanded the American middle class. In 1901, J.P. Morgan paid $480 million for Carnegie Steel, making its founder the world's richest man. Carnegie eventually gave away almost his entire fortune, most famously to endow so-called Carnegie libraries.
John D. Rockefeller tamed the early wildcat oil economy and replaced it with a smoothly functioning--if vaguely sinister--international machine. "The day of combination is here to stay," he once said, "individualism has gone, never to return."
Rockefeller built Standard Oil by borrowing heavily to fund acquisitions and ruthlessly cutting costs. As historian Gerald Gunderson writes, refineries were consolidated at larger, more efficient locations and tied into new pipelines. Rockefeller also colluded with the major railroad owners to have his product shipped more cheaply than his competitors. Standard Oil eventually became the No. 1 target of the anti-monopolists in government. It was broken into 34 pieces in a landmark 1911 Supreme Court case. The decision set a precedent that would make antitrust policy a major force in America and throughout the world.
Because of his integrity, stewardship and unlimited resources, J.P. Morgan was perhaps the most important banker who ever lived. Morgan helped ailing railroads by snapping up cheap assets and installing capable managers. He was involved in the formation of major industrial concerns, including U.S. Steel, General Electric, AT&T and International Harvester. In times of crisis, Morgan himself acted as the de facto bank of last resort, stepping in and averting two potential financial crises. Historian John Steele Gordon points out that Morgan's influence was so outsized that it convinced policymakers that the United States needed a central bank and could not rely on one private individual. The Federal Reserve was founded a year after his death.
The affordable, drably uniform Model T changed everyday life, transformed the American cityscape and revolutionized business. The assembly line allowed Henry Ford to continually lower the price of the Model T, while making a higher and higher profit due to increased sales volume. "Fordism's" high output, standardized parts and mass production provided the world the "McAutomobile." The modern interstate highway system owes its existence to Ford's invention. Cheap cars enabled Americans to move away from Main Street--and shop at Wal-Mart assembly line rendered workers automatons, but Ford's revolutionary $5 wage for a day's work allowed them to afford new luxuries such as education for their children--spurring the economy.