Pick Up the Gauntlet

American steel magnate Charles M. Schwab (1862-1939) was renowned for his brilliant skills of management. He was in charge of Bethlehem Shipbuilding and Steel Company, which became one of the most important heavy manufacturers in the world under his leadership. One of Schwab’s greatest stories involved a steel mill of his which was always seriously under-producing. Although Schwab had already switched a couple of managers of the mill, there wasn’t any sign of improvement. Therefore, Schwab decided to visit the plant personally to see what could be done to turn the situation around. According to How to Win Friends and Influence People (Carnegie, 1936), the episode went like this:

Brainwashing to Win

A large part of success does not come from your skills or knowledge, but from your psychology. Tom Gullikson is an American tennis player who has won sixteen top-level doubles titles in his professional life. At one point in his career, Gullikson had great trouble playing in tie-breakers. For those who have no idea, a tie-breaker in a tennis match is a kind of “sudden-death” play-off when the score is tied, and Gullikson always did poorly because of the tension it brings, which costed him many important matches. Practising tie-breakers does not help, because it can’t simulate the pressure in a real competition.

Phone Call Robbery

It is ironic that the greatest bank heist in history was accomplished without using a single weapon. Stanley Mark Rifkin was a computer contractor who worked for the Security Pacific National Bank in Los Angeles, which gave him access to the transfer procedures inside the bank. He learnt that bank officers who were authorised to order wire transfers would be given a daily code each morning for their orders, but to save the trouble of remembering it, they would write down the code on a slip of paper and posted it where they could see it easily. This serious loophole in security let Rifkin run away with a large sum of money, which he later recalled that he felt “as if he had just won the lottery”.

Trading the Darvas Box

The story of Nicolas Darvas (1920-1977) is a Cinderella tale in which a world-touring professional dancer grew an initial capital of $36,000 into $2,450,000 in the 1957-58 bull market. After taking inflation into account, it would be more than $20,000,000 in 2016. More impressively, he did this while he was travelling cross the globe, which means he was heavily handicapped by delayed information from Wall Street, as well as limited communication with his brokers. Remember, it was a time without the internet or any mobile communication. In his book, How I made $2,000,000 in the Stock Market (Darvas, 1960), he gave a detailed account of how he made this possible.

Profit First

Mike Michalowicz is one of the most colourful businessmen in the world. By his thirty-fifth birthday, he had sold two companies and became a multi-millionaire. Confident to continue his success, he became an angel investor, but only proceeded to lose his entire fortune. Then he started all over again, not only managed to get back on his feet, but also became a best-selling business writer. His latest book, Profit First: A Simple System to Transform Any Business from a Cash-Eating Monster to a Money-Making Machine (Michalowicz, 2014), aims to help small businesses to generate reliable and consistent profits, and get out of the depressing cycle of living from payment to payment.