John D. Rockefeller's Business Strategy

I'm currently reading Titan, Ron Chernow's biography of John D. Rockefeller, Sr.

The following are some of Rockefeller's business strategies and tactics. They are supplemented with contemporary examples from Tesla Motors, Elon Musk, and Jeff Bezos.

Lesson 1

Throw employees into difficult problems on their own and watch them sink or swim. You'll be surprised at how well they do.

Tesla uses this strategy. In a recent interview with Dave Lee, former Tesla employee Farzad Mesbahi said he was hired and then expected to run an entire part of logistics even though he was not ready for it. He ultimately succeeded which simultaneously helped Tesla and developed his skills.

Lesson 2

Do not reprimand employees. Brush off the failures of employees.

This makes sense because people need to have failures to improve. If you do not allow your employees to fail, they will either hide failures from you or they will never try anything new because that could be cause for reprimand.

This only works if you have a culture where employees want to improve. If your employees are failing due to a lack of effort, that is entirely different than not reaching a goal after trying your best.

Lesson 3

Train all employees to replace the next person in command.

This gives you an everlasting line of new talent that can replace higher-ups.

Lesson 4

Rockefeller was great with finances. The CEO of any business must be great with finances.

Rockefeller believed that CEOs do not need to understand technology: "I never felt the need of scientific knowledge, have never felt it. A young man who wants to succeed in business does not require chemistry or physics. He can always hire scientists."

This may have been correct in 1865, but it is incorrect in today's technological age. Elon Musk has said that physics is the most important field to study.

Musk and Bezos both have engineering degrees and backgrounds in finance. Today, CEOs need to have an understanding of business, finance, computer science, and engineering.