Skip to content

April 2011 Book Review

April 29, 2011

Titan: The Life of John D. Rockefeller, Sr.

Written by Ron Chernow, ©2004

Titan (a national best seller and over 600 pages long) is a delightfully sweeping narrative about one of America’s wealthiest and most prominent family and their family business.  The book is set against the backdrop of almost 100 years of American history including slavery and the Underground Railroad, the Civil War, the temperance movement and prohibition, the expansion of the railroad, the Industrial Age, the regulation of corporate America, the inventions of the automobile and airplane, and on and on.

There is much to be learned from their family practices inside and outside of their business.  Some of the most relevant to family business practitioners are discussed below.  Enjoy this synopsis of a family that overcame the odds by prioritizing.

Family First

As a child Rockefeller, Sr. left secondary school to attend a brief business training program and take up a job to support his mother and siblings. After taking his first job, Rockefeller Sr. brought his brother William into the company as an apprentice. Although he was initially against his youngest brother joining the Civil War, he did pay for his uniforms and rifles. While he was the President of Standard Oil, he allowed his brothers to be his employees. Rockefeller, Sr. and his wife, Cettie were dedicated to raising their children and preferred home life to social and work life.

Collaboration with Spouses

Rockefeller, Sr. married Cettie and for years she was his confidant and counsel.  Rockefeller, Jr. married Abby, who encouraged him to take his rightful place as heir in the company. Both men married women who were equal or superior in education, and collaborated with them in how they raised their children and what causes they would support.

Philanthropy

World renowned is the Rockefeller legacy of philanthropy – perhaps not as well known is how early it started. Rockefeller, Sr. always gave a portion of his income to church and those less fortunate than he, even before he could really afford it. Before Sr. could find a systematic way of donating money in the amount it was coming in, he had the whole family gather around the table and vet potential applicants for various donations. The grandchildren credited their conceptions of philanthropic stewardship as much to their grandfather as their father.

Equal is not Always Fair

Rockefeller, Sr. understood that keeping parity between Jr. and his three sisters was of paramount importance. When the federal government boosted inheritance taxes twice in 1916 and 1917 the largest intrafamily transfer of money in history happened between Sr. and Jr. This act outraged Sr.’s daughters since the transfer made Jr.’s inheritance greater than theirs. Sr. had decided that the girls did not accept the importance of stewarding the family money, and therefore entrusted his son with the legacy (as well as mitigate the rise in inheritance tax). Rockefeller, Jr. said “anything he gave me would be administered with the same sense of duty and stewardship which compelled his giving.” The two remaining daughters (one had passed) Alta and Edith were each given an equitable trust. Many times Edith tried to show her father’s talent in business and would blow large sums of money, all of which Rockefeller, Sr. would cover. Jr., also set up equal trust for his children but the stipulations of the trusts were different for his children, who did not understand or appreciate the stewardship of their money.

Reinvest in the Business

It was important for Sr. to buy up as much stock as allowed when shares became available. He wanted those shares to stay in family hands. Rockefeller, Jr. went so far as to set up trusts for his children where they could draw income but the principle withdrawals had to be approved by trustees.

Early Education of Children about Wealth/Philanthropy

Rockefeller, Sr. seized every opportunity to teach his children about the importance of money. He had his children keep ledger books of their expenditures and gave them allowances much smaller than children of their socioeconomic status. He allowed them to earn extra money by doing household chores. He reinforced the importance of philanthropy and often had his children deal with their money in thirds: philanthropy, savings, and spending. Interestingly, they appeared not to be aware of the large wealth they would one day inherit until much later. Jr. imposed the same rules for his children. From the 1st to the 3rd generation many of the children were under the impression that they were not wealthy.

 Encourage Children to Pursue Their Own Careers and Dreams

Neither Rockefeller, Sr. nor Jr. exerted any pressure on their children to enter into Standard Oil or the Rockefeller Trust. In true testament to this when Rockefeller, Jr. had to resign from standard oil and devote his life to philanthropy “to live with his own conscience” Rockefeller, Sr. replied “I want you to do what you think is right.”

Non-Family Management/Transition

When Rockefeller stepped down he left John D. Archibold, his protégé, in charge as early as 1896.

Family Members in the Business

Rockefeller, Sr. and his brother Frank always had a rocky relationship and kept him on the payroll despite Frank’s underperformance, outward resentment, and public interviews against Standard Oil.

Family Privacy

Rockefeller, Sr. often kept tightlipped about Standard Oil with his children even in the face of wide, negative press coverage. He often refused interviews or public statements to defend his character in the media. When his grandson, Nelson, asked if he could write a report clearing the family name for one of his classes in business school, Sr. refused and began a 3 year interview process with William O. Inglis to serve as a private family archive.

 

 

 

Renée Montoya Lado M.S., N.C.C

President, Strategic Designs for Learning

Family Owned Business Network  Book Review Chair & Editor

Natalie McVeigh, MBE

Research Analyst, Strategic Designs for Learning

 Family Owned Business Network  Senior Book Reviewer

Advertisements
No comments yet

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: