Letters From A Self-made Merchant to His Son by George Lorimer (April 2017)
This is one of those books whose title perfectly describes the content- a self made merchant writes a few letters to his son. Most of the letters follow a pattern: John Graham writes about some recent event or observation, makes a couple of funny remarks, and shares a related anecdote or two. Occasionally, he drops in a racial slur (1). His son, Pierrepont, does not respond (at least in the context of the book- the correspondence Lorimer collects is one-way) but Graham's constant references to their lives maintains a narrative flow that could have easily been lost in this format.
I enjoyed the book immensely. The advice is simple and timeless. Graham effectively mixes different delivery methods- at times, he leans on metaphors or anecdotes (such as when suggesting that the spoon is played with after taking the medicine). But he's not afraid of the direct approach either (evidenced in observations like for each mistake, there is an excuse- but just one).
As the head of a business, Graham does not lack for leadership wisdom. I liked the idea that a clerk has one boss- the boss- but the boss has as many bosses as he has clerks. Bosses cannot ask for more than they give; because of this reality, the boss who transgresses is not so much breaking a rule as he or she is undoing it.
Graham's thoughts on feedback rung true to me. Rather than criticize too harshly, he recommends showing people the path to a truth. If the recipients become 'aware' of their own faults or shortcomings, perhaps the realization will motivate an attempt at reform before anyone else is able to find out.
In fact, this 'show rather than tell' approach ties up the entire book. Graham does tell, of course- he's restricted by the letter-writing form- but he prefers to show whenever possible. His example highlights the effectiveness of advisers who limit their advice-giving. Instead of issuing dictum after dictum or demanding a rigid path be followed, Graham highlights the benefits of the 'adviser' style by showing possibilities, encouraging self-awareness, and being the first to get out of the way.
One up: When Graham encounters a situation where his expertise does not extend far enough, he admits his ignorance. That does not stop him from stating what he does know, however, and I found on a number of occasions that his tendency to do this helped him navigate situations where a lack of knowledge would have tripped up others.
A good example comes in a comment about his son's college education. Graham, like just about anyone, does not really know what the best courses are for his son to take. He decides to approach it like he does with his diet- since its easier to know what does a person harm rather than good, he advises his son to worry about avoiding distractions and bad classes instead of trying to pick out the best quality coursework.
He also employs this approach when commenting on behaviors or phenomena he disagrees with. Regarding popularity, Graham concedes that there is nothing inherently bad about it. However, he points out that to become popular takes a great deal of time that could be spent doing something else.
Graham's prescient comments about the stock market have remained with me in the weeks after this reading. To buy or sell on margin is to buy or sell on a foundation of nothing- and the profit on nothing tends to average out to nothing (or less). Though I am sure Graham was no math wiz, he understood a characteristic about speculators that proved more significant knowledge than any banker, stockbroker, or accountant of his time- winning speculators will keep playing until they lose and losing speculators will keep playing until they win.
The greed cultivated by this infinite appetite for victory remained unchecked until everyone lost so much that they could not afford to play again. I believe that moment was known as the Great Depression.
One down: Graham routinely wrote that it is better to know how to apply a few basic truths than it is to study a lot of complex yet inapplicable ideas. As Graham put it, education broadens a narrow mind but there is no known cure for the big head. Applied to a work context, he observes that learning more about a job than is required is like saving money to move into a bigger house- at some point, the accumulation of all that investment gets put to good use.
The advice is a little repetitive. Now, I did not tire of Graham's repeated counsel to prefer slow and steady progress to quick fixes or fast solutions. But that's just me.
I think the ability to stick to his principles as he advises says something important about his success. For Graham, a millionaire is made one dollar at a time. An advice seeker might prefer to hear something different but that understanding won't change Graham's approach.
Just saying: Graham did not buy into the idea that people could effectively do for a business what they could not do for themselves. In this book, the point is reinforced countless times through his observations about how behavior in personal finance often reflected itself in an employee's decisions with company money.
One idea he commonly cites is how a bad business often runs operating expenses up before increasing revenue high enough to justify it. He compares these bookkeepers to those who overdraw on personal accounts to spend on purchases that do not generate some form of financial return. Graham avoids handing these people financial responsibilities within his firm for they have traded 'the virtues of the poor for the vices of the rich'.
He also thought the best way to predict breakdown in performance was to understand an employee's habits during off-hours. He acknowledges overwork as a potential issue, of course, but from his own experience observes 'worries and whiskey' as the more common explanations for a once-effective employee's loss of production.
Footnotes / imagined complaints
1. To remind readers that this collection was first published in 1902, I guess?
The pattern I describe is a lot like a TOA post. Minus the racial slur, of course.
