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Best Business Books: Biography

Life Lessons

(originally published by Booz & Company)

David Nasaw
Andrew Carnegie
(Penguin Press, 2006)

Randall Stross
The Wizard of Menlo Park: How Thomas Alva Edison Invented the Modern World
(Crown, 2007)

Richard S. Tedlow
Andy Grove: The Life and Times of an American
(Portfolio, 2006)

The New York Times ran an article in 2007 by Harriet Rubin about the reading habits of successful CEOs. (See “Shall I Compare Thee to an Andy Grove?” by Harriet Rubin, s+b, Winter 2007.) It turned out that they read almost everything but business and management books. Yet if there is one type of business book that deserves to be read by everyone, it is biography — that is, the biographies of corporate titans written by respected business historians, management scholars, and journalists (as opposed to those written by the infamous or to the self-congratulatory variety). Not all business biographies are great, but when they are good, they are very good. In fact, one can find more useful information in a well-written biography of a business giant than in a shelf full of management texts and how-to leadership books. This year’s crop of business bios includes studies of the careers of three corporate icons — Thomas Edison, Andrew Carnegie, and Andy Grove.

The Wizard of Self-Promotion
I approached Randall Stross’s admirably concise biography of Thomas Alva Edison (1847–1931), The Wizard of Menlo Park: How Thomas Alva Edison Invented the Modern World, with great expectations. Edison is the perfect avatar of today’s Silicon Valley techno-geniuses: He is credited with inventing the incandescent lightbulb, the phonograph, and the electric chair, and he was founder of the predecessor of today’s General Electric Corporation. Edison accumulated more than 1,000 patents and started numerous companies over his long life. In his time he was, and today he remains, the quintessence of that peculiarly American genus, the entrepreneur/inventor, the ranks of which include such notables as Henry Ford, George Westinghouse, Alexander Graham Bell, Steve Jobs, and Bill Gates.

However, the question remains open regarding just how great an inventor he actually was (he often claimed credit for work done by others). And there is little doubt that he was far from being a competent businessman. What is incontestable is that he was the most famous American of his era. As Stross reminds us, Edison eclipsed the name recognition of even Henry Ford and Theodore Roosevelt. Significantly, the book’s subtitle refers more to the wizard’s discovery of the uses of celebrity than to his contributions to the spread of electric power. Edison was the first to use his self-generated star status to advance his commercial agenda, much as Jobs today uses carefully crafted showmanship and media manipulation when he introduces the latest i-gizmo to adoring audiences.

Edison was a complex man. A genius tinkerer with a prodigious capacity for work, he was also a chronic dissembler whose own self-deceptions were perhaps even greater than his deceptions of a gullible public. He made wild promises of inventions that never materialized, faked lab results, and, according to Stross, “had no compunction about claiming credit for work done by assistants” and discoveries clearly made by others.

However, his was a manifestly curious mind, one genuinely excited by technical challenges and more interested in the satisfaction of inventing than in the money — and, perhaps, even the fame — that his inventions produced. He was doubtlessly telling the truth when he said, “Work made the earth a paradise for me.” A lifelong workaholic, he was routinely still in the lab at age 65, putting in six-day, 120-hour weeks. Stross depicts a colleague finding the young Edison in his lab “half-dozing at his desk,” and asking the wizard what he is doing there so late at night. “What time is it?” Edison asks.

“Midnight,” the fellow replies.

“Is that so?... I must go home then. I was married today.”

Edison, the fabulous inventor, was a terrible husband, a worse father, and an insensitive employer who used loyal people and then fired them on a whim. He was a micromanager who made decisions not only in areas where he had little expertise, but also in situations where he was downright incompetent. He pronounced the radio “a fad” and forbade his managers from entering the business. In its day, Edison’s company was one of the major producers of musical recordings, and its nearly deaf founder (Edison literally had to bite the wood of a piano or phonograph in order to hear it) insisted on being the person to choose which artists to record. He had disdain for all forms of popular music — jazz was “for nuts” — and he wasn’t all that happy about most classical performers, either, calling pianist/composer Sergei Rachmaninoff “a pounder.”

He cared not a whit about customer preferences. It is little wonder, then, that when he died in 1931, he had so mismanaged his business empire that he left an estate valued at only US$1.5 million. By comparison, his friend and fellow titan, Henry Ford, left roughly $180 million. Ford was, in fact, Edison’s only friend, reflecting the wizard’s general mistrust of others (he suspected they were using him for their own purposes). As he grew older, Edison became insufferably self-absorbed and opinionated and, in the end, was beloved by all but those who knew him. And, unlike Ford, Edison left no philanthropic legacy and never made any significant civic contributions.

That said, Edison was seen by the public of his day as a great inventor, and his name on a product was viewed as a guarantee of quality and technical progress. He also was a hero and role model to many aspiring inventors and businesspeople. Stross gives the man his due: He was a genius at self-promotion. “Edison had promoted his own image and the notion that it was his hands alone that had performed miracles.” Even in his lifetime, knowledgeable people began to realize that he was no Steinmetz or Tesla. The book’s subtext, of course, is that Edison stands as the first in that long line of celebrity CEOs that stretches more than 100 years and 3,000 miles from Menlo Park, N.J., to Menlo Park, Calif. Read it and weep.

The Inveterate Optimist
Standing a bit shy of the five-foot mark, Andrew Carnegie nonetheless stood head and shoulders above the much taller J.D. Rockefeller, J.P. Morgan, and their Gilded Age contemporaries known collectively as Robber Barons. In fact, Carnegie was the giant of his era (1835–1919), a man of remarkable breadth and substance who was as much a player in the fields of national and international politics, philanthropy, and literature as he was in the world of big business. As David Nasaw documents in his engaging, magnificently researched, and beautifully written biography, Andrew Carnegie, the little Scot was a man in full — and although not a particularly good or brilliant man, he was the first modern American corporate capitalist, an undeniably important figure in his own time and, by reflection, in ours. I have had to restrain my enthusiasm in writing this review: Andrew Carnegie is not only the best biography of the year, it may be the best business book I have ever read.

Carnegie was the largely self-educated son of a ne’er-do-well Scottish weaver who immigrated with his family to the Pittsburgh area at age 12. Given the grim circumstances of his early life and the dour demeanor of his Scots relatives, the son displayed an amazingly sunny disposition. As a boy, and throughout his life of 84 years, Carnegie was seldom seen without a smile on his face, and was always full of cheery optimism even under the most adverse of conditions. Curiously, like Edison (who was born a dozen years later), Carnegie started his career as an underage telegraph operator. But whereas Edison got hooked on the technology, Carnegie was seduced by the money. By age 19, he was wildly enthusiastic about earning money from capital and set out to earn it by selling bonds in Europe to raise money for American companies (and investing in railroads, bridges, and oil, among other necessities of the industrial age). He appreciated that it was far better to let money work for him than to labor himself. Indeed, he found being a capitalist better than doing work of any kind. Unlike Edison, Carnegie never saw the inherent virtue of hard work. Instead, he believed that work was an activity to be minimized so he could have time to enjoy the good life of reading, writing, horseback riding, traveling, concertgoing, taking long walks in nature, and having conversations with thoughtful friends. But the simple life was not enough. Carnegie “reveled in excess,” writes Nasaw, eventually owning a 40,000-acre palatial estate in Scotland, replete with a staff that included a full-time gamekeeper, forester, yacht captain, golf links superintendent, organist, and bagpiper (to wake his numerous houseguests at dawn and to call them to their meals).

Like Edison, Carnegie was often estranged from the truth. Although not an inveterate liar, he often bluffed, obfuscated, and exaggerated when the facts were inconvenient and, especially, when they were inconsistent with the public image of virtue and rectitude that he wished to burnish. His business dealings were frequently shady, or unethical, by our standards, although not necessarily illegal at the time. He capitalized — perhaps profiteered — from the Civil War and, as a result, was worth more than $5 million (in current dollars) before he was 30.

Three years later, that figure was close to $75 million, and at that point he “sat down with a stub-nosed pencil and a scrap of paper to take stock of his life — and finances.” He resolved to “beyond this [amount] never earn — make no effort to increase fortune, but spend the surplus each year for benevolent purposes.” According to Nasaw, 30 years passed before Carnegie finally started to make good on that promise to himself. In the interim, he would accumulate what probably was, at the time, the largest fortune ever held by one person. Through a combination of foresight, calculated risk, skill, luck, and a large dose of P.T. Barnum–like bunkum and bravado, he found himself at an early age owning the controlling interest of what would become U.S. Steel when he sold the company to J.P. Morgan in 1901. It is important to understand that Carnegie didn’t sell his shares of the company, because he considered playing the stock market “gambling” (he proclaimed proudly that he never invested in publicly traded equities). He owned outright more than 60 percent of the privately held partnership and personally pocketed some $226 million in gold bonds at the time of the sale, a staggering amount worth at least 20 times that today. We are talking double-digit billions here, as in the Forbes “rich list” crowd.

Early in his career, Carnegie admirably recognized that the source of his vast wealth was found not in his “labour, nor skill. No, nor superior ability, sagacity, nor enterprise, nor greater public service.” Instead, he saw that he was simply the right man at the right place and time to capitalize on the nation’s growing demand for steel — first for its railroads, and then for its giant urban buildings. Because Carnegie Steel could meet that demand, he calculated that he was earning, roughly, a 40 percent annual return on his investment. Pittsburgh in the late 19th century was the realization of Alexander Hamilton’s 1790s dream of a corporatist utopia: a fast-growing population, a supportive government in cahoots with business, and access to nearly unlimited capital and natural resources that allowed manufacturers to achieve previously unattainable economies of scale. Carnegie understood, better than his competitors, that in the efficiency game bigger was not just better; it was the winner. Carnegie Steel grew by leaps and bounds as it gobbled up market share, gobbled up competitors, and drove into bankruptcy those it didn’t digest.

His giant plants operated 24/7, but Carnegie rarely bothered to visit them. He didn’t go to the office, either. He seldom put in more than four hours a day at his desk, wherever it happened to be located. Living comfortably in New York during the social season, and for up to six months in Scotland when the weather was conducive, he saw no reason to waste his time in grimy, sooty Pittsburgh, or to bother with day-to-day business when he could hire professional managers to mind the factories. Business readers will find particular value in Nasaw’s meticulously detailed accounts of the daily internal management of Carnegie Steel, and may be surprised to find that Carnegie was neither its manager nor its leader. The absentee Scottish laird was the quintessential nonexecutive owner. He would disappear from the business scene for months — only to reappear suddenly to second-guess informed decisions made by his duly empowered lieutenants; having thus meddled, and successfully undercut their authority, he would slip away again.

This is not to say that Carnegie added no value to the enterprise. He was a brilliant strategist who, more often than not, had great business instincts and saw the big picture far more clearly than his managers. He was also a consummate deal maker, salesman, and negotiator who easily bested Rockefeller and Morgan in major transactions.

Carnegie is probably best known as a union buster. Ironically, he personally suffered exploitation as a young worker. He came from a family of militant union people in the reforming Chartist tradition and, early in his business career, was widely hailed as “a friend of labor,” speaking out in favor of unions and in solidarity with the working class. He proposed a farsighted deal to the union representing steel workers in which wages would be tied to profits so that both employer and employees would share in good times and bad. The union agreed during a recession to cut wages and increase working hours. However, when the post-recession boom began, Carnegie neglected to cut his worker “partners” in on the upside. Strikes ensued. Workers cried: Liar! Hypocrite! Scoundrel! But no, the great and patronizing Scot replied, I have merely had an important insight that you fail to understand.

Carnegie experienced an epiphany while reading the works of his contemporary, the philosopher Herbert Spencer. In “The Gospel of Wealth,” the most influential of countless essays he wrote during his life, Carnegie set forth his personal beliefs within the framework of Spencer’s Social Darwinism: “The laws upon which civilization is founded” decree that wealth must accumulate in the hands of those with the greatest “talent for organizational management.” He clearly had changed his mind about the source of his fortune, and now saw the duty of those with his rare talent to administer those funds as a kind of public trust and to dispense with them in ways most beneficial to the progress of the community. And therein lay his logic for reneging on his deal with the workers: It simply was contrary to those “laws of civilization” to permit the members of the community who produced the wealth to decide for themselves how to use it; hence, to pay workers more than the minimum they needed to survive was to “encourage the slothful, the drunken, the unworthy,” Carnegie said. To his critics he replied, in essence, “Don’t blame me, I am just obeying the laws of political economy.”

His workers and their union might have thought they needed more and better food, clothing, and shelter, but Carnegie knew better: What they really needed was libraries, museums, and vocational schools. By this paternalistic logic, it would be wrong for him to share his profits with his workers; in fact, it was his sacred duty to reduce their wages so he would have more to give to the charities that would, in the long term, truly benefit the working class. It was therefore without a pang of conscience that he allowed the chief manager of Carnegie Steel, Henry Clay Frick, to call in the Pinkerton guards, who fired on his striking workers at the Homestead Works in 1892. Throughout the subsequent decade, according to Nasaw, “there was an inverse relationship between the firm’s profits and the amounts of money distributed to the workforce as wages.” The value of steel produced increased by 226 percent, while the percentage of profits paid as wages decreased by 67 percent. Carnegie broke the union in the process, and later would claim that the resulting cost advantage was the key to his ability to drive out unionized competitors.

Nasaw provides a marvelous history of the Industrial Revolution and the rise of corporate capitalism; at the same time, he offers deep insight into the unique workings of the capitalist mind. What he explains about Carnegie makes it easier for us to understand how the current CEO of Wal-Mart can argue that he has “no choice” when it comes to offering his workers low wages and few benefits, and how he can argue simultaneously that Wal-Mart is serving working people’s needs by delivering goods they want at affordable prices. Like Carnegie, many CEOs in low-wage industries today genuinely see themselves as prisoners of the laws of economics when it comes to paying their workers. And they believe they are altruistically doing the workers a favor in the long run by providing cheap goods, and then ultimately donating their wealth to charity.

Carnegie, like Edison, was insensitive to the real needs of his workers, his managers, his business partners, his wife, and his daughter. He was a pathetic mama’s boy who met his bride-to-be when he was 45 and she 23, but was afraid to become engaged because he feared that his old mum — who lived with him — would disapprove. He waited until his mother was dead, 15 years later, before popping the question. He accumulated talented, powerful, and famous friends much in the same way he amassed capital, hobnobbing with Matthew Arnold, William Gladstone, and Teddy Roosevelt, never hesitating to offer them unsolicited wisdom and advice, much to the amusement and irritation of five presidents and two prime ministers. His friend Samuel Clemens (better known as Mark Twain) summed up what it was like to be in the company of the great Scot: “He never has any but one theme, himself…. I think he would surely talk himself to death upon it if you would stay and listen.” In a comment appropriate to so many of today’s top executives, Clemens noted that his friend sadly lacked the capacity of self-reflection: “Mr. Carnegie is not any better acquainted with himself than if he met himself for the first time day before yesterday.”

The book also helps us to understand the motivations driving the current philanthropic rage among wealthy Americans. To his credit, Carnegie eventually made good on his promise to give away his fortune, devoting much of the last two decades of his life to trying to die without a penny to his name. For the most part, he gave more carefully, thoughtfully, and wisely than perhaps any philanthropist prior to Bill Gates, and his largesse has benefited millions of people over the last hundred years. Yet, in what seems a fit and proper final assessment of the man, Teddy Roosevelt wrote that “if Andrew Carnegie had employed his fortune and his time in doing justice to the steelworkers who gave him his fortune, he would have accomplished a thousand times what he has accomplished” in his public and philanthropic activities.

The Polymath CEO
Andy Grove: The Life and Times of an American is the only book among this trio of biographies written about a business titan of our own era. Had he not chosen a career in business, Grove most certainly would have found prominence in the field of science (he has a Ph.D. in chemical engineering from U.C.–Berkeley, and some 40 technical articles to his name published in prestigious journals). Grove is also the author of a significant physics textbook, two respected books on management, and a widely praised autobiography. Somehow he managed to do all that scribbling while profitably leading Intel through several successive waves of product innovation in the fast-changing semiconductor industry. Given all that, it is a shame that Grove has not been better served by his biographer, Harvard Business School professor Richard Tedlow.

One of the most interesting aspects of this shamelessly adoring book is the account of Intel’s shared leadership in the firm’s formative years: the famous troika of techno-guru Gordon Moore, public spokesman Robert Noyce, and Grove the operations guy. Each of the three brought his own formidable strengths to Intel’s C-suite, complementing the others beautifully, and compensating for the others’ widely recognized individual weak spots. No one of them alone could have created the great company Intel would become. Wherever readers may stand in the corporate hierarchy, they can profit from learning about how such leadership teams, and not just single leaders, can succeed.

This point, however, highlights the book’s glaring shortcoming: Tedlow is too enamored of Grove and too dismissive of the Intel insiders who frequently voiced concern over his interpersonal failings. By all accounts, Grove’s intemperate, some say abusive, behavior drove Moore and Noyce nuts, and alienated others who worked for him. In 1984, he landed on Fortune’s infamous list of “America’s toughest bosses.” It seems that a streak of stubborn arrogance in Grove blinds him to the effect of his behavior on others. Like many larger-than-life intellects, Grove’s high-octane brain sometimes in­terferes with his ability to manage the messy feelings and power struggles that gum up the best-laid analytical plans. Certainly, he knew how to drive continuous innovation in a high-tech industry, but his mind for scientific precision reduced every organizational issue to a technical problem with a quantifiable solution. From a leadership perspective, that mind-set can be as self-defeating as trying to solve a technical problem in a T-Group.

Although exceptionally well researched and documented, Tedlow’s biography is so enamored of his subject that the author loses credibility. Compared to Nasaw’s magisterial and elegant prose in his study of our other “Andy,” the writing in Tedlow’s book, in some instances, is so amateurish that the reader is embarrassed for the author, particularly in his obsession with interpreting his subject’s every move as an unconscious reaction to being a Holocaust survivor. How many times do we have to be reminded that Grove is of Jewish descent? Enough, already, what about the semiconductors?

Like Edison and Carnegie before him, Andy Grove can probably expect to be the subject of future biographies. We can hope that the next one will be richer and more complete. In the meantime, readers could do far worse than to read Grove’s own fine books.

The Executive Ego
A theme running through all three of the biographies discussed above is the power — both for good and for ill — of the executive ego. In the cases of Edison, Carnegie, and Grove, their undeniable genius compensated more than adequately for their inflated sense of self-importance. Not so with Sandy Weill, whose recent autobiography (coauthored with Judah S. Kraushaar), The Real Deal: My Life in Business and Philanthropy, is filled with far more ego than substance. Weill has spoken of himself as the modern-day Andrew Carnegie on the front page of the New York Times. Indeed, there are obvious similarities between the two: both are short, optimistic, gregarious men with an innate flair for blockbuster business deals. Weill’s choice of philanthropic pastimes — chairing the boards of Carnegie Hall and Cornell’s medical school — are manifestly in keeping with the old Scot’s interests (Carnegie served as a Cornell trustee). And there is no denying Weill’s record as a deal maker; he is the guy who acquired Shearson Loeb Rhoades and sold it to American Express and then, for his second act, turned Travelers Insurance and Citibank into Citigroup.

Given all that Weill has seen and experienced, one would expect to find at least a few profound insights about business and leadership in his autobiography, but, alas, Sandy Weill is no Andrew Carnegie. In this thin volume, he comes across as an empty suit, a man of little substance who has thought deeply only about his own undeniable accomplishments. He nearly breaks his arm patting himself on the back, page after increasingly tiresome page, interrupting the flow of first person pronouns only to praise his ever-beautiful, -charming, -brilliant, and -loving spouse. It is a good thing Weill took the initiative to write this autobiography; it is doubtful that any historian in the future will find the subject worthy of the effort. 

The conclusion we can draw from these quite different biographies is that a major source of the success of America’s most powerful business leaders — the power and focus that derive from their overweening egos and lack of self-reflection — is also a significant source of their weaknesses as leaders and human beings. That vitally important lesson, which inevitably emerges in biographies, is seldom adequately addressed in the popular management and leadership books.

Author profile:

James O’Toole ( is the Bill Daniels Distinguished Professor in Business Ethics at the University of Denver’s Daniels College of Business and coauthor (with Edward E. Lawler III) of The New American Workplace (Palgrave Macmillan, 2006).
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