Weekly Bookmarks –
116th Edition – April 25, 2021
From the time he was a $5-a-week stenographer in 1900 to when he became one of the nation’s wealthiest men on the eve of the stock market crash in 1929, Raskob followed his own advice (of doing things bigger and better if the fundamentals are sound).David Farber – Everybody Ought to Be Rich
1. The $5/Week Clerk Who Became a Household Name
He was not a rags-to-riches story because he grew up in a middle-income family. When Pierre DuPont offered him a clerk position, this clerk asked for $10/week plus travel expenses to move, and he got it.
He later orchestrated an industry roll-up and brought his boss and his family wealth beyond imagination by introducing Pierre to General Motors in its infancy.
Later, he built and financed The Empire State Building during one of the most challenging financial environments this country has ever experienced.
I’m calling him the first-ever CFO in the modern era. His name is John Jakob Raskob.
2. Is The Financial Media Giving Us Poor Advice?
If you work in a financial leadership position, do you grow tired of being told we need to do this or to do that? I’ve even heard CEOs say of CFOs, “They are the forward-looking strategic people.”
The financial media over the past 20 years has also been telling us to quit being historians and to be transformational visionaries.
Is that correct? It’s not incorrect, but blanket statements can be dangerous.
3. Who Was Raskob’s Business Coach?
Well, he didn’t have one. Instead, he had natural gifts that kept shedding fruit. The fruit-bearing tree kept growing until it became an orchard. Harsh winters and storms were only mild and temporary setbacks. The guy who could turn $1 into $100 for those who employed him and for his family members stuck to what he loved doing – completing deals and being the financial architect to realize the end game.
Raskob’s biographer is David Farber, and in his book, Everybody Ought to Be Rich, the historian explains that Raskob was quick to transfer Donaldson Brown from DuPont to GM to turn the back-office financial chaos to order – a mess that the GM founder, Billy Durant created.
Brown is known for creating the well-known DuPont ROE formula, and he was an accounting genius. While Raskob tracked every home expenditure at his sprawling home compounds, he didn’t love cost accounting. He loved finance. One was a historian of numbers. The other was a financial visionary. Both added immeasurable value to their employers and shareholders.
4. What Made Raskob Shine?
Farber’s book is a bit dense, but if you like business history, it’s a winner. Or you can wait until next week when he’ll be on next week’s CFO Bookshelf podcast. We hit the big points of no-name Raskob in less than 45 minutes.
But why the adulation for this financial genius? Here is what one writer said of him in the early 1920s:
- he possessed an extraordinary keen business sense (agree)
- he had a vivid but not fantastic imagination (agree)
- he had the power of translating imagination to figures (agree)
- he had the ability to convince others that the dream could come true (absolutely)
Regarding that last point, his people skills were phenomenal. Not to be missed, he was humble from day one until the end.
5. Efficacy vs Self-Esteem – Insights to Raskob’s Professional Success
I’ve heard Alan Weiss talk about the difference between efficacy and self-esteem. The former is about how good we’re at something. The latter is about our self-worth. Regarding these two:
High Self-Esteem / Low Efficacy = Empty Suit
High Efficacy / Low Self-Esteem = (Feeling like an) Imposter
Low Efficacy / Low Self-Esteem = Lost
Where was Raskob? From the early days of working for Pierre DuPont, Raskob had high self-esteem and his efficacy grew each year through new and challenging projects. Weiss calls that being healthy. And that’s why I believe he was so successful.
Regarding Imposter Syndrome (IP), Dr. Gail Matthews found that 70 percent in a study of successful people experience imposter feelings. She learned that most who have IP feelings thought their success was luck and had nothing to do with their efficacy. Source: The Imposter Syndrome by Dr. Pauline Rose Clance.
Many of us will never achieve Raskob’s accomplishments, but we can experience his healthy balance of self-esteem and efficacy. We’ll just have to overcome those IP feelings that get in the way.
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Always be learning and growing.