On the other hand, Patterson showered his factory employees with enormous benefits. Unlike the grim sweatshops of that time, the walls of the first factory he built were 80 percent glass, allowing for light and fresh air, and the building included amenities like a swimming pool, showers, a hot lunch cafe, and an infirmary. To this and other factories, he soon added daycare, classes for men and women, and gardens.
The Birth and Boom of NCR
Born in 1844 near Dayton, Ohio, Patterson grew up working on his family’s farm and attending local schools. He served a brief stint in the infantry near the end of the Civil War, where he developed a lifelong admiration for martial discipline, then entered and graduated from Dartmouth College. Returning once again to Dayton, he worked a series of jobs that led to a partnership with his brother operating coal yards and coal mines.In that capacity, Patterson noted that one of the company’s stores for miners had run through a large stock of inventory, but was losing money. An investigation revealed the store clerks were giving goods away to friends, canceling credit accounts, and dipping into the till.
From that takeover was born the National Cash Register Company (NCR).
For the rest of his life, Patterson was obsessed with bringing cash registers not just to the country, but to the world. His team of technicians worked constantly to upgrade the machine. The first cash registers had to be hand-cranked to operate, for example, but while the increasing availability of electricity offered the opportunity to end this task, no motor then in existence was small enough to fit inside the register. Two of Patterson’s engineers, Charles Kettering and Edward Deeds, set to work and solved the problem, one of many innovations that helped keep NCR ahead of its competitors. Patterson also beat these rivals through buyouts, slick advertising that attacked their products, and, if necessary, dropping his prices below costs to drive them out of business.
The Napoleon of Sales
NCR’s incredible growth can be credited to the army of salesmen Patterson created. He was the first entrepreneur to put out a manual for his sales force, guidelines that grew into a book with a standard pitch to be used by every salesman and instructions detailing everything from behavior to dress. He was the first to create quotas for salesmen, each of whom was assigned a specific territory, and he paid them a straight commission, meaning that they could earn an excellent income. Each of them and their supervisors were required to submit daily reports to company headquarters.“The closing of a sale was as stylized as a Japanese kabuki play. When the salesman had the prospect sagging on the ropes, he was too much the artist to ask crudely for the order; instead, he moved on smoothly to, “Now, Mr. Brown, what color shall I make it?” Or, “How soon do you want delivery?” If the store owner drew back, the N.C.R. man prepared him once more for signature, gently urging him up to the mark again, pen at the ready—“Just sign here.” With the ceremonial signing went a twenty-five-cent cigar and the ego-boosting assurance that the customer had proved he was a real live wire as a businessman.”
The Ripple Effect
While Patterson was growing NCR, his company and his methods also acted as a seedbed for American innovation elsewhere.Fired and rehired several times, that inventor of the tiny engine for the cash register, Kettering, left NCR, invented an electric starter for the automobile, went to work for General Motors (GM), and helped make the company into the country’s premier manufacturer of automobiles. His fellow inventor, Deeds, also left and worked with Kettering for a time, then with the Wright Brothers in early aviation, and returned to NCR to help the company during the Great Depression.
Top NCR salesman and then manager of sales Richard Grant joined his friend Kettering at GM, where he instituted some of the techniques he’d learned under Patterson to put the car company ahead of Ford in sales. Grant became the top sales executive and served into the 1940s on GM’s board of directors.
Perhaps the most influential of those who left NCR was Thomas J. Watson, another top-gun salesman. Hired in 1914 to run the Computing-Tabulating-Recording Company, Watson renamed the outfit the International Business Machines Company, which he and his son built into the giant tech company IBM.
A Son of Dayton
Despite his great personal wealth, Patterson never left Dayton. Moreover, believing that “shrouds have no pockets,” he spent much of his fortune on programs and extras for his employees, and on other projects around the city.“With his unconquerable spirit and the material resources he provided, Patterson saved the city. Crayon in hand, he quickly outlined a relief plan on his handy easel pad. Food, tents, medicines, and hospital equipment were moved to the N.C.R. property, which fortunately stood on high ground and had its own power plant. Company bakers started baking bread around the clock, and the assembly line at N.C.R. soon was turning out rowboats—one every seven minutes. Thousands of Daytonians were fed at the N.C.R. cafeteria, slept on hay in the offices (the hay was changed every night). … Five babies were born in the factory in one day alone. ... Dayton needed a hero and Patterson had a legitimate claim to the role.”
Today, Patterson is buried in Dayton’s Woodland Cemetery. The National Cash Register Company evolved into two companies, one for supplying and assisting restaurants and retailers, the other known for its manufacture of ATMs. His greatest legacy, of course, are the sales and business principles he made common and the commercial giants like General Motors and IBM who adopted so many of his strategies.
