This post is the first of series I plan to write on the financial principles that made yesteryear’s entrepreneurs so successful. Hopefully, we can incorporate these lessons into our lives today and emulate their successes. Our first entrepreneur is James Cash “JC" Penney.
JC Penny was born in 1875 to a Missouri farmer and Baptist preacher whose Golden Rule philosophy (Do unto others what you would have them do unto you) impacted not only his personal life but his business life. Penney purchased one third ownership of his first store (named “Golden Rule") for $2,000 in 1902. Five years later, he bought out his partners and was sole owner of three Golden Rule stores. By 1912 he owned 34 stores, a number which rose to 120 stores (now re-named JC Penney) in 1920 and 1400 stores in 1929. He was earning an annual income of $1.5 million by 1924.
What financial lessons can we learn from this entrepreneur of yesteryear?
- He treated his customers with respect.
Penney was fiercely pro-active in training all of his employees to give honest and fair service to all customers. Penney also insisted that only quality merchandise be stocked and price mark-ups be kept to minimum. Penny succinctly described his path to success with these words: “In retailing, the formula happens to be a basic liking for human beings, plus integrity, plus industry, plus the ability to see the other fellow’s point of view.”
Lesson: To some degree, we are all in the service industry. Learning to “see the other fellow’s point of view" will help us serve better.
- He treated his employees with respect.
Penney’s mantra to new associates was, “Give me a stock clerk with a goal and I’ll give you a man who will make history. Give me a man with no goals and I’ll give you a stock clerk“. He was one of the first businessmen to call his employees “associates”, but they actually were associates — by his death in 1971, the company’s profit-sharing program included all of its 50,000 store workers.
Lesson: Our employees are more than employees; they are people who have lives, goals, ambitions and needs. They are associates. Penney pre-empted “management versus labor" conflicts by proactively going to bat for his people. We have much to learn from his example.
- He practiced his principles.
In 1897, at age 22, Penney started a butcher shop which failed, according to American Heritage Center, “largely due to the loss of the local hotel’s business when he refused the cook’s demand of a pay-off in the form of whiskey.”
Lesson: We would do well to put our principles ahead of our profits.
- He was resilient.
After the 1929 stock crash, Penney lost virtually all his personal wealth, and borrowed against his life insurance policies to help the company meet its payroll. Suffering his own depression, he briefly checked into John Harvey Kellogg’s Battle Creek Sanitarium. However, he bounced back, once again leading the company to not only survival but prosperity.
Lesson: When failures and disappointments happen. the depth of our character will determine how we respond. Hopefully, we will get back up and continue to fight. Allow the story of JC Penney’s resilience inspire you to do so.
- He thought of others.
In the midst of the Great Depression, and in the midst of his own personal losses, Penney teamed with teamed with Thomas J. Watson, President and Founder of IBM; Arthur Godfrey, the radio and TV personality; and Norman Vincent Peale, a minister, inspirational speaker, and author of The Power of Positive Thinking to form the first board of 40Plus, a non profit organization still actively helping unemployed professionals, managers and executives make career transitions.
- He was charitable.
Penney was involved in numerous charitable organizations throughout his life. In 1954 he founded the James C Penney Foundation (restructured as the Penney Family Foundation in 1999). This Foundation continues today to advance human rights, community social, political, and economic empowerment, government accountability, and environmental sustainability.
Lesson: There are plenty of needs around us; our lives only get better when we seek to meet those needs.
- He stayed the course.
As late as the 1960s, while Penney was in his 70s, he regularly visited his company’s stores and occasionally stepped behind the counter to help customers.
Lesson: The road to success is a marathon. The turtle will always beat the hare. Coach John Wooden once said, “It’s not so important who starts the game but who finishes it.” We will never know how the game ends if we prematurely give up.
The core principles for successful living are timeless. James Cash Penney built his retail empire nearly a century ago by living out these principles. We can likewise be successful today by learning from him.