The U.S. Business Hall of Fame

(FORTUNE Magazine) – IT IS THE RARE businessman who can succeed in a big way without taking big risks. Cyrus W. Field, father of the transatlantic cable, repeatedly risked millions on his seemingly impossible dream. Walter P. Chrysler dragged his company from nowhere to No. 2 in the auto industry not only by building cars that were ahead of their time, but by getting people to buy them as well. Leonard H. Goldenson, who resuscitated the moribund ABC television network, outgunned his rivals with a barrage of offbeat, innovative programming. Robert O. Anderson bet a huge stack of chips on Alaska's North Slope to boost Atlantic Richfield into the oil industry's major leagues. Rene C. McPherson turned a sow's ear into a silk purse by stimulating productivity with radical new methods at Dana Corp., the big auto parts manufacturer. Edward E. Carlson, brilliant both at cutting costs and boosting morale, pulled United Airlines out of a nose dive by proving that less can be more. These masters of the bold stroke have all been elected this year to the U.S. Business Hall of Fame. Started in 1975, the Hall of Fame is sponsored by Junior Achievement, a Connecticut-based non-profit organization dedicated to teaching high school students about the attractions and workings of private enterprise. At Junior Achievement's request, FORTUNE's board of editors chooses new laureates once a year from two broad categories: those who are alive but have left the jobs in which they made their mark, and those who have died. This year's laureates will be inducted at a banquet in Detroit on April 17. ROBERT ORVILLE ANDERSON (born 1917) A wildcatter from Chicago's upper crust built one of the world's great oil companies. Starting at age 24 with borrowed cash, Anderson pieced together Atlantic Richfield, today the sixth-largest oil company in the U.S., and accumulated a personal fortune estimated at $200 million. As a sideline he became the largest individual landowner in the U.S., at one point holding some 2,000 square miles of ranchland in New Mexico and Texas. He loves to tell the world ''I'm a wildcatter,'' and he won't go anywhere without his familiar, soiled Stetson, yet he was born and raised in Chicago, where his father was a prominent bank executive. Anderson's smooth, restrained manner betrays his upper-crust origins. ''My father had the distinction of being the first banker in the U.S. who loaned money on oil in the ground,'' he recalls. As a young man he visited the Texas and Oklahoma fields and was overcome with admiration for the tough, daring wildcatters. Anderson studied geology and economics at the University of Chicago, working as a roughneck during the summers, and by the time he graduated in 1939 ''there was no question in which direction I wanted to go.'' For a couple of years he served as assistant to the president of American Mineral Spirits, a subsidiary of Pure Oil, but he itched to run an operation of his own. ''I always just had desires to get in business for myself,'' he remarks. ''Practically all the people I knew were self-employed.'' The young man borrowed $50,000 from a family friend -- years later he discovered that his father had guaranteed the loan -- and in October 1941 bought a small, run-down oil refinery in Artesia, New Mexico. ''The important thing it had was a good crude supply,'' he recalls. ''This was right on the edge of the Permian Basin, where there'd be no difficulty in getting crude oil for it, and it was geographically isolated so it had a somewhat protected market.'' After the U.S. entered World War II Anderson was able to sell everything he could produce, supplying gasoline to the many air bases that sprang up in the Southwest and diesel fuel for the atom-bomb project at Los Alamos. His company bought six refineries, built a pipeline system, and started a wildcatting operation. After the war he continued his shrewd wheeling and dealing, buying a California refinery in the Fifties for $2 million, sprucing it up, and selling it to Gulf Oil two years later for $23 million. In 1957 he struck a bonanza in New Mexico's exceedingly rich Empire- Abo field. ''It definitely put us into the ranks of independent producers in a significant way,'' he remarks. And in 1963 he merged his operations with Atlantic Refining, in the process becoming the company's largest shareholder with 5% of the outstanding stock. At first he served only as a director of Atlantic, while devoting himself to a multitude of outside interests -- especially the Aspen Institute for Humanistic Studies, a cultural retreat for business leaders, where he reigned for many years as chairman. But he soon grew impatient with Atlantic's management, and took over as chairman and chief executive in 1965. ''The company saw itself as a marketing company,'' he recalls, ''where I saw it as an oil- and gas-producing company. When I went into the company they only produced about 40% of their requirements and bought the rest in the open market. I realized that the company would not turn around unless there was a very conscious effort to shift the emphasis.'' In 1966 he merged Atlantic with Richfield, which gave him plentiful reserves overseas, in California, and in Alaska at a site called Prudhoe Bay where Richfield had many leases. The new company -- Arco for short -- plunged heavily, and with astounding success, on the North Slope. That left it with a huge surplus of oil, so in 1969 Arco - bought Sinclair, which had large refining, marketing, and pipeline operations. The deal also substantially increased Arco's foreign reserves and gave it a stronger position in the petrochemical business. Not all of Anderson's moves were winners. A 1977 merger with Anaconda turned out to be a dud; Arco wound up divesting Anaconda's mining and metal- processing operations. Anderson says he hoped Anaconda's resources and expertise would help him launch a major shale-oil venture, but that the world oil glut and the declining price of petroleum made shale oil ''moot.'' He says wearily, ''We got ready for a world that never happened.'' The glut also prompted Arco to sell its gas stations and refining operations in the East and to lay off thousands of employees. Oil analysts agree that when Anderson retired at the end of last year, he left the company braced and ready to face the industry's difficult future. EDWARD ELMER CARLSON (born 1911) A chatty, peripatetic hotel man saved United Airlines from disaster and kept it No. 1. Eddie Carlson, as he likes to be called, modestly resists the notion that he saved United Airlines. But let the facts speak for themselves. He became chief executive at the end of 1970, a year in which the largest U.S. airline suffered a $46-million loss, its worst ever up till then. United was squeezed by a recession, by heavy new competition on the Hawaii and California routes, and by the cost of financing an overly large fleet of jumbo jets. Carlson promptly canceled all orders for more big planes, eliminated 300 of United's 1,800 daily flights, decentralized the top-heavy management by reorganizing into three geographical divisions, and slashed the number of jobs by 9%. He also set out on a handshaking and fact-finding tour of the airline's facilities everywhere in its system, traveling nearly 20,000 miles a month to meet with the employees, listen to their complaints and suggestions, and persuade them to cut their operating expenses and improve service. United showed only a small loss in 1971 and was back in the black in 1972. This now-legendary rescue mission was all the more remarkable because it was carried out by a man of advanced middle age who had never before worked for an airline. Carlson had spent most of his life in the hotel business, and had built Western International into one of the world's great hotel chains before selling it to United. A native of Tacoma, Washington, Carlson says he came ''from a broken home on the wrong side of the tracks.'' He goes on, with some pride, ''I've said the American dream is possible in this country, and I'm a good example of it.'' He worked at a succession of odd jobs and got through a couple of years at the University of Washington before running out of money. Bristling with energy, ambition, and garrulous sociability -- ''I like people; I'm comfortable with people'' -- he started in the hotel business in Seattle as a page and soon climbed the ladder to bellhop. He took a year out for a disastrous fling as a traveling salesman, trying to sell $375 hat-blocking machines to dry-cleaning establishments in the depths of the Depression, then resumed his career as a bellhop. In 1936 he finally made it to manager at a small hotel in Mount Vernon, Washington, and a year later became the manager of the ultraprestigious Rainier Club in Seattle, where he got to know all the corporate big fry of the Pacific Northwest. After stateside service as a supply officer with the Navy during World War II, he got a job as assistant to S. W. Thurston, the president of Western Hotels. Carlson became a vice president of the company in 1947, executive vice president in 1953, and president in 1960. During this period, he was also making good money with colleagues in a venture called Pacific Hotels, which bought, refurbished, and sold hotels, and eventually merged into Western. When Carlson became the president at Western, the company owned or managed just 19 hotels, and was confined almost entirely to the Northwest. ''I was determined to turn Western into a major international hotel company,'' he says. He went on an acquisition binge, and by the time he sold out to United in August 1970, Western, with 60 hotels in 13 countries, ranked behind only Sheraton and Hilton. Ironically, Carlson wanted to merge with United because he feared that Western might be heading into financial difficulties. ''The company was highly leveraged and business was taking a downturn,'' he recalls. After the merger he continued to run Western, figuring that he could soon retire. But less than four months later the chief executive of United, George Keck, was ousted in a coup instigated by the outside directors. The directors felt that the aloof, introverted Keck wasn't moving aggressively enough to solve United's problems. Carlson, with his long, virtually unblemished record of success, seemed a likely replacement despite his lack of airline expertise. ''I had a big block of stock,'' he observes, ''and they figured I'd work my fanny off to take care of that interest, which is pretty true. One of the reasons I enjoyed my time with United was that I'd made enough money so if I didn't make a success of the job, I wasn't going to go hungry. My ego might have suffered a bit, however, because I had a lot of confidence in me.'' During the late Seventies and early Eighties United contended with soaring fuel prices and the competitive pressures brought on by deregulation. The record deficit of 1970 was exceeded in 1979 and again in 1981, two years before Carlson retired. But Carlson, with his keen eye for satisfying customers at affordable costs, managed to keep United No. 1 in the industry. LEONARD HARRY GOLDENSON (born 1905) A mild-mannered movie magnate bet on a failing TV network and won big. The last of the old network tycoons, he snatched the American Broadcasting Co. from the brink of bankruptcy during the early Fifties and transformed it into the most profitable advertising vehicle in the world. Though mild mannered and self-effacing by inclination, he prodded his company through an endless succession of bold gambles, constantly challenging the broadcasting industry's conventional wisdom because he had to do something if ABC -- ''the fourth in a three-network race,'' as Variety once mischievously described it -- was to survive and prosper. ''We were just looking to create our own character, our own vitality, our own strength,'' he recalls. It was Goldenson's network that lured the big movie studios into producing TV shows, wrested control of programming from the advertisers, pioneered the miniseries and made-for-TV movies, and saturated the airwaves with sports. Goldenson was born in Scottdale, Pennsylvania, where his father was a well- to-do clothing merchant and part owner of two movie theaters. As a youngster Leonard worked part time as a theater usher and became an avid film buff. After graduating from Harvard College and Harvard Law School and working briefly for a New York law firm, he was hired in 1933 to help reorganize Paramount Pictures, then in receivership. He was assigned to rehabilitate the company's theater interests in New England, and did such a bang-up job that he was made head of the entire 2,000-theater chain in 1938. In 1950 the Justice Department forced Paramount and the other major studios to spin off their movie houses. Goldenson became president of the newly formed United Paramount Theatres. ''I was dedicated to getting into television,'' he recalls. He already had some experience with the medium, since Paramount Pictures owned station WBKB in Chicago, where the Kukla, Fran and Ollie show got its start. Despite dire warnings from some of the other directors of his company, he bought ABC in 1953 with $25 million worth of United Paramount Theatres stock. ''It was losing money, it was losing a lot of money,'' he recalls. ''ABC only had its own five television stations and eight affiliates -- it had about 35% coverage of the U.S., and NBC and CBS already had 85%. It was in trouble, real trouble, and virtually ready to be thrown into bankruptcy.'' In making the deal he promised to keep ABC's old management intact for three years, but when that time passed he cleaned house. ''Everybody at ABC kept saying to me: 'It can't be done, you can't compete.' I don't understand that language.'' Goldenson's competitive drive carried him far out on many a limb. He got Walt Disney to sign an exclusive contract to produce a show for TV in 1954, but only after agreeing to invest more than $17 million in Disney's scheme for a vast amusement park in Anaheim, California -- a deal that the two other networks had rejected. ABC eventually made a $10-million profit on Disneyland. Goldenson also recalls that ''we were scared to death'' in 1977 when ABC was preparing to broadcast Roots, the first major miniseries. ''When we decided to show it all in one week's time, nobody knew what was going to happen,'' he says. What happened is that the series captured some of the largest audiences in television history, with seven of the eight episodes playing to more than 30 million households. Goldenson never pretended that his network's programming was aimed at highbrow audiences. As he unapologetically put it: ''We're in the Woolworth business, not in Tiffany's,'' and he denounced ABC's critics as ''the wealthy intelligentsia who lounge on the Riviera.'' Yet he was immensely proud of the high-quality Roots series and would invariably mention it whenever anyone suggested that his network had lower brows than the others. By the mid-Seventies ABC had surged to the top in audience ratings, and in 1977 it topped the networks in ad revenues as well. It continued in that spot for another seven years, but has since slipped from the pinnacle in both categories (see Managing). ''I think you sometimes overstay your market by keeping programs on too long,'' Goldenson reflects. Having raised ABC's % annual revenues more than 20-fold in three decades -- to $3.7 billion, with $195 million in profits -- Goldenson sold the company to Capital Cities at the end of last year for $3.5 billion, a nice little gain on that dubious $25- million investment. He sold, he says, because ''I was advised by the top people in Wall Street that once I stepped out, the invaders would be here at the doorstep of this company to tear it apart, and I just didn't want that to happen.'' RENE COSSITT McPHERSON (born 1924) He introduced Japanese-style management before anyone knew what it was. As president and then chairman of Dana Corp. from the late Sixties through the Seventies, he converted a large, stodgy auto parts manufacturer into a model of productivity. Dana, unionized and based in Toledo, had been run for years by a top-heavy bureaucracy and was suffocating under the weight. McPherson cut through the tangle by eliminating 350 of the 500 staff jobs at headquarters and by scrapping a 17-inch stack of operating manuals and replacing them with a one-page policy statement. He urged his managers to abolish time clocks, encouraged employees to establish their own production goals, and set up a stock-participation plan. He encouraged Dana's managers to meet in person with employees, rather than sending faceless memos. And he established ''Dana University,'' an ambitious in-house training program for those who wished to move up. As one security analyst put it, McPherson brought Japanese-style management to Dana before most people even knew what that was. In McPherson's 12 years as a top executive, Dana's annual revenues quintupled to $2.8 billion and earnings per share climbed an average of 15% a year. Dana's productivity, adjusted for inflation, doubled while most other industrial companies were showing little or no improvement. Born in Akron, the son of a salesman who worked for Goodyear and later Time Inc., McPherson won the Distinguished Flying Cross for completing 28 bombing missions as a B-29 copilot in the Pacific during World War II. ''I was working on urban renewal for Japan,'' he cracks, ''operating out of the island of Saipan -- very exciting at the time.'' After mustering out he earned an engineering degree from Case Institute and in 1952 got an MBA from Harvard. He was convinced that he couldn't be happy working for a big company and that he had to be his own boss, so he and a Harvard classmate decided to buy a small company in California that made prefabricated houses. They abandoned the ! venture when the classmate had to pull out. McPherson, rebelling against his instincts, took a job as a sales representative for Dana, where he knew an up- and-coming manager named John E. Martin, later to become chief executive. After four years in sales he switched to the production side as a plant manager.

From the first McPherson was feisty, profane, and outrageously opinionated -- in short, a maverick. ''It isn't that I'm against tradition,'' he remarks. ''I just don't think tradition works well if you've got problems. If everything is great, tradition is super.'' He was driven by the belief that ''if you don't have the foot soldier with you, you're not going to win the damned battle,'' and he went out of his way to cultivate people on the production floor. ''I tried to spend a lot of time out on the floor, because that's where the action is.'' He was constantly buttonholing machine operators and assembly-line workers for opinions and suggestions, and he would sometimes get into trouble with his bosses for sharing information with the workers about plant profits. ''Just because these people don't have a necktie and a white shirt, it doesn't mean they're not bright,'' he remarks, ''because they're brighter than hell! The proof is that they can live on 300 bucks a week, and there isn't anybody in management that can live on 300 bucks a week.'' McPherson managed to win over his bosses by achieving consistently superior results. Under John Martin's nurturing wing he became executive vice president of Dana in 1966 and president in 1968, and in 1972 he succeeded Martin as C.E.O. At his urging many of Dana's plants adopted the so-called Scanlon Plan -- named for an industrial-relations specialist -- in which both workers and management receive substantial bonuses if they come up with ways to increase production without raising payroll costs. He never imposed the plan, however, but scrupulously observed the requirement that 70% of a plant's work force had to approve it. ''I pushed and I sold and I wheedled and I connived and I blackmailed, but I wouldn't tell somebody: 'You, by God, are going to do it!' That's no way to do anything. Then you haven't sold it on its merits, and you know it's not going to work.'' In 1979, believing that he had held the top job ''long enough,'' he accepted an offer to become dean of the Stanford Business School. He intended to launch a building drive there and to start a management-training program for the school's administrative staff. But ) a serious auto accident put him in the hospital for four months, and he found that he ''didn't have the energy'' to do the job properly. He retired to Florida in 1983. WALTER PERCY CHRYSLER (1875-1940) A wanderer who became a household name, he built the third-largest U.S. auto company, which in fact ranked No. 2 after General Motors when he died. Born on the Kansas frontier, the son of a Union Pacific engineer, Chrysler was fascinated with machinery -- ''I have always wanted to know how things work'' -- and turned down a chance to go to college so he could toil in a U.P. shop at 10 cents an hour. A bit of a gypsy, he was constantly hopping on and off freight trains, finding work as a machinist in railroad shops throughout the Midwest and West. After settling down enough to become works manager for the American Locomotive Co., he was recruited in 1912 by General Motors to revitalize Buick, then the company's largest division. Chrysler, who loved cars and had taught himself to drive, introduced cost control, mechanization, and assembly- line methods to Buick. He quadrupled production in three years, and Buick's surge sent GM's profits soaring. In 1920, at the behest of some bankers, he went to the rescue of the Maxwell Motor Co. Under Chrysler's direction, it brought out an attractive mid-priced car in 1924 featuring such innovations as a high-compression engine and four-wheel hydraulic brakes. The public grabbed up 32,000 of them the first year, a record for a new car. In 1925 Maxwell was renamed Chrysler Corp. By 1928 the company was able to shell out $170 million to buy Dodge Brothers. During the Depression Chrysler Corp. steadily reduced its debt while continuing to improve its products. It was in sound shape when Walter Chrysler was permanently incapacitated by a massive stroke in 1938. CYRUS WEST FIELD (1819-1892) He was the driving force behind the first transatlantic cable -- arranging the financing, directing the project, and remaining zealous yet genial in the face of technical foul-ups that caused years of delay. The son of a Congregational minister in Massachusetts, Field left home at 15 and made a fortune in New York selling paper. In 1854 he met a Canadian engineer who hoped to connect the U.S. telegraphic system to a line being built across Newfoundland to the coastal city of St. John's. Field, staring at a globe, wondered why a telegraph cable couldn't also be laid across the ocean between Newfoundland and Ireland. | Field raised more than $3 million from rich investors on both sides of the Atlantic, and in August 1857, after the line across Newfoundland was completed, ships on loan from the British and American navies began putting down cable in the treacherous ocean depths. The cable broke four times before a hookup was completed in August 1858, and then the cable stopped working after three weeks. Field was able to raise enough money to start again, but couldn't resume the project until after the Civil War. A heavier, better insulated cable was put down in 1865, but it broke after more than half the distance had been covered. The next attempt, in 1866, worked just fine. A jubilant public hailed Field, and he made a new fortune when the stock of his Anglo-American Telegraph Co. soared. Field later rescued the financially threatened company building New York's elevated railway system. In his final years, though, he was plundered by business associates, and he died nearly broke. Roster of Past Laureates WILLIAM MCPHERSON ALLEN LEO HENDRIK BAEKELAND WILLIAM MILFRED BATTEN STEPHEN DAVISON BECHTEL SR. ARNOLD ORVILLE BECKMAN OLIVE ANN BEECH WILLIAM BLACKIE WILLIAM EDWARD BOEING ANDREW CARNEGIE WILLIS HAVILAND CARRIER FREDERICK COOLIDGE CRAWFORD HARRY BLAIR CUNNINGHAM ARTHUR VINING DAVIS JOHN DEERE WALTER ELIAS DISNEY GEORGES FREDERIC DORIOT DONALD WILLS DOUGLAS PIERRE SAMUEL DU PONT GEORGE EASTMAN THOMAS ALVA EDISON HENRY MORRISON FLAGLER HENRY FORD BENJAMIN FRANKLIN ROSWELL GARST AMADEO PETER GIANNINI FLORENCE NIGHTINGALE GRAHAM WALTER ABRAHAM HAAS JOYCE CLYDE HALL EDWARD HENRY HARRIMAN HENRY JOHN HEINZ JAMES JEROME HILL CONRAD NICHOLSON HILTON EDWARD CROSBY JOHNSON II REGINALD HAROLD JONES JOHN ERIK JONSSON HENRY JOHN KAISER CHARLES FRANKLIN KETTERING LESLIE BERNARD KILGORE ROBERT JUSTUS KLEBERG SR. RAYMOND ALBERT KROC ALDEN JAMES LABORDE EDWIN HERBERT LAND WILLIAM FREDERICK LAPORTE ALBERT DAVIS LASKER ROYAL LITTLE FRANCIS CABOT LOWELL HENRY ROBINSON LUCE IAN KINLOCH MACGREGOR JOHN JAY MCCLOY CYRUS HALL MCCORMICK MALCOM PURCELL MCLEAN FORREST MARS GEORGE JACOB MECHERLE ANDREW WILLIAM MELLON CHARLES EDWARD MERRILL JOSEPH IRWIN MILLER GEORGE STEVENS MOORE JOHN PIERPONT MORGAN HOWARD JOSEPH MORGENS ADOLPH SIMON OCHS DAVID MACKENZIE OGILVY WILLIAM SAMUEL PALEY JOHN HENRY PATTERSON WILLIAM ALLAN PATTERSON JAMES CASH PENNEY ABE PLOUGH WILLIAM COOPER PROCTER SIMON RAMO MONROE JACKSON RATHBONE DONALD THOMAS REGAN JOHN DAVISON ROCKEFELLER JAMES WILSON ROUSE DAVID SARNOFF JACOB HENRY SCHIFF CHARLES MICHAEL SCHWAB ALFRED PRITCHARD SLOAN JR. CYRUS ROWLETT SMITH CHARLES CLINTON SPAULDING ALEXANDER TURNEY STEWART JOHN ELDRED SWEARINGEN JR. JOHN EDGAR THOMSON THEODORE NEWTON VAIL CORNELIUS VANDERBILT DEWITT WALLACE LILA ACHESON WALLACE GEORGE WASHINGTON THOMAS JOHN WATSON JR. GEORGE WESTINGHOUSE FREDERICK KING WEYERHAEUSER ELI WHITNEY CHARLES KEMMONS WILSON JOSEPH CHAMBERLAIN WILSON ROBERT ELKINGTON WOOD ROBERT WINSHIP WOODRUFF OWEN D YOUNG