Past Track to the Future

What can businesspeople learn from the leaders who built the railroad?

Persistence. Grenville Dodge, chief engineer of the Union Pacific Railroad, would say that there is no problem we can't solve if we put our minds to it. The leaders of that undertaking had great confidence; they never doubted themselves. They had two important qualities: pride and hubris. But hubris was backed up by hard effort. They held firm. When Charles Crocker was contested for a position on the river where he could water his horses, he simply stood his ground: "A man who is well assured of his own position and shows bold front need not fear anybody."

Before the building of this railroad, no one, no matter where or how he lived, had such optimism or determination. It was thanks to those two qualities that the Americans set out to build what had never been created before. Collis Huntington, a leader of the Central Pacific Railroad, was considered to be ravenous and irrational in pursuing his goals. A friend said of him, "If the Great Wall of China were put in his path, he'd attack it with his nails." But he still couldn't get anyone to buy his railroad bonds. He went ahead and laid track anyway.

From reading your book, it seems that the great projects depend on messiness. Invariably, there are unscrupulous investors, and there are builders who would have been in the nuthouse if they weren't in business. So for all of those people who say, "Why couldn't we have seen the dotcom crash sooner?," the answer is, "We did see it coming, but we still had to go through the mess to create this new economy." Would you agree?

The railroad period was a time of extremes. There were thefts, exaggerations, lies, and disputes. Accidents were frequent on the line. America had just finished fighting a war when it embarked on building the railroad. And remember, the railroad was built in a period of sharp economic instability.

Again, urgency was the dominant emotion. Just as it is now, the building of the railroad was a race of speed and greed. The Union Pacific and the Central Pacific were pitted against each other. The CP was moving east, and the UP was moving west -- eventually to meet around Salt Lake City. The incentives were enormous: For every 300 miles of track laid, the companies were loaned government bonds. It's hard to say if urgency helped or hurt. It definitely hurt some. Union Pacific vice president Doc Durant died broke, and he was the one who was in the greatest hurry.

It took the railroads a long time to start making money, but once they started, they made a lot. The Union Pacific Railroad was one of the greatest corporations in the world.

We like to think that management began with Peter Drucker. You point out that modern work actually began with the Civil War and the building of the railroad, when huge numbers of men had to be managed.

A great deal of the skill that managers had was learned in the military. Armies were the biggest organizations. There were no business organizations that equaled the size of armies. Decision making, communications, and logistics -- these all grew out of war. Who the hell among managers would ever know how to feed 10,000 people? Alexander the Great knew how to feed people. If you knew how to take care of people, you could transform 10,000 lazy, shiftless souls into 10,000 eager-to-work-for-you people. War taught men everything about how to become master builders.

Your books are all about great leaders who are engaged in great efforts. Heroes are not much in fashion in these cynical days. But you call yourself an unabashed "hero-worshipper," and your books show how people can realize big ideas.

The leaders were the big men of the century. Abraham Lincoln was the driving force. Then Ulysses S. Grant and William T. Sherman were the men who held the Union together, north and south. And then with the railroad, they bound it together east and west. These men could think big, organize grand projects, and persevere.

You say that what characterized the engineers who were responsible for this feat was a basic "contempt for authority." Why did that sentiment prove to be so significant?

Nothing stopped them. They believed in freedom. These people had to do what was thought to be impossible: build tunnels through mountains, lay track in winter. They not only had to fight the state of knowledge, but also "the earth and stone laid in their path centuries ago by the Creator," according to one of the engineers.

Andrew Higgins, who built landing craft in WW II, refused to hire graduates of engineering schools, even though there was a lot of detail and invention involved in making those boats. He believed that they only teach you what you can't do in engineering school. His engineers were all self-taught. He started off at the beginning of the war with 20 employees. By the middle of the war, he had 30,000 people working for him. He turned out 20,000 landing craft. Dwight D. Eisenhower told me, "Andrew Higgins won the war for us. He did it without engineers."