«Enterprising Minnesotans This page intentionally left blank Enterprising Minnesotans 150 Years of Business Pioneers Stephen George Foreword by ...»
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150 Years of Business Pioneers
Foreword by Marilyn Carlson Nelson
Published in cooperation with the Center for Entrepreneurial Studies
at the Carlson School of Management, University of Minnesota
University of Minnesota Press
Minneapolis — London
Copyright 2003 by the Regents of the University of Minnesota
All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior written permission of the publisher.
Published by the University of Minnesota Press 111 Third Avenue South, Suite 290 Minneapolis, MN 55401-2520 http://www.upress.umn.edu Library of Congress Cataloging-in-Publication Data George, Stephen, 1948– Enterprising Minnesotans : 150 years of business pioneers / Stephen George.
“Published in cooperation with the Center for Entrepreneurial Studies at the Carlson School of Management, University of Minnesota.” Includes bibliographical references and index.
ISBN 0-8166-4219-2 (HC/j : alk. paper)
1. Businesspeople—United States—Biography. 2. Businesspeople—Minnesota—Biography. 3. Industries—United States—History. 4. Industries—Minnesota—History.
5. Entrepreneurship—United States—History. 6. Entrepreneurship—Minnesota— History. 7. Minnesota—Biography. I. Center for Entrepreneurial Studies (Carlson School of Management) II. Title.
HC102.5.A2 G46 2003 338.09776'092'2—dc21 Printed in the United States of America on acid-free paper The University of Minnesota is an equal-opportunity educator and employer.
Whatever you can do, or dream you can, begin it!
Boldness has genius, power, and magic in it.
—Johann Wolfgang von Goethe This page intentionally left blank Contents Foreword — ix Marilyn Carlson Nelson Acknowledgments — xiii Prologue — xv Pioneering Spirit (1849–1865) — 1 James Madison Goodhue, Minnesota Pioneer Jane Grey Swisshelm, St. Cloud Democrat John Quincy Adams, Appeal Alexander Wilkin, St. Paul Mutual Insurance Company Alexander Hartman, Duluth Electric Company Betting on the Future (1865–1890) — 17 Frederick Weyerhaeuser, Weyerhaeuser Company Cadwallader Washburn, Washburn-Crosby Company Charles Pillsbury, C. A. Pillsbury and Company Frank Peavey, Peavey Elevator Company Will Cargill and John MacMillan, W. W. Cargill Company William Worrall Mayo, William Mayo, and Charles Mayo, Mayo Clinic Harvey Fuller, H. B. Fuller Company James J. Hill, Great Northern Railway Leonidas Merritt, Mountain Iron Company Richard Hankinson, Northwestern Telephone Seizing Opportunity (1890–1915) — 53 Theodore Hamm, Theodore Hamm Brewing Company Hans Andersen, Andersen Windows Sister Antonia McHugh, College of St. Catherine William McKnight, 3M (Minnesota Mining and Manufacturing Company) Charles Beckman, Red Wing Shoe Company Henry Marison Byllesby, Northern States Power George Draper Dayton, Dayton’s Department Store Surviving and Thriving (1915–1940) — 81 Merritt Osborn, Economics Laboratory John Brandt, Land O’Lakes Jacob Aall Otteson Preus and Herman Ekern, Lutheran Brotherhood Carl Wickman, Greyhound Bus Company Colonel Lewis Brittin, Northwest Airways, Inc.
Curt Carlson, Carlson Companies, Inc.
Building on Talent (1940–1965) — 107 Sister Elizabeth Kenny, Sister Kenny Institute William Norris, Control Data Corporation Earl Bakken, Medtronic Jeno Paulucci, Chun King Rose Totino, Totino’s Marvin Schwan, Schwan’s Growing the Business (1965–2000) — 137 Joel Ronning, Digital River, Inc.
Richard Schulze, Best Buy Company, Inc.
Leeann Chin, Leeann Chin, Inc.
Jimmy Jam Harris and Terry Lewis, Flyte Tyme Records Glen Taylor, Taylor Corporation Conclusion: In a Pig’s Eye — 159
T he ancient Greeks, who seemingly had a saying for everything, said, “A people are known by the heroes they crown.” In other words, “Tell me who you admire, and I’ll tell you who you are.” It’s a saying especially appropriate for a book about enterprising Minnesotans.
In Enterprising Minnesotans, Stephen George has collected the essence of Minnesota— the unﬂagging spirit, the sense of community, the crystal-clear vision of the future that have been the hallmark of those who have formed the business and social fabric of our state.
What is it about this place that produces so many visionaries with a drive for success? How did Minneapolis develop to become a city that, along with St. Paul, has nurtured such a disproportionate number of headquarters of so many Fortune 500 corporations? Perhaps it’s the short roots that connect the past and current population to the immigrants who ventured into the interior of our great nation, seeking freedom and capital. They were frugal and practical people who saw value in investing in their companies and communities, but no value in things transitory and impermanent.
Minnesota humorist Garrison Keillor captures this essence in his imaginary sojourns to Lake Wobegon—where upright citizens brook no waste or nonsense, but are not without their own inventiveness or humor.
I’ve lived it personally, growing up in a family only one generation off the ship from Sweden. Our family’s company was like a sibling to me, and the machinations of business were eagerly taught at our table. More than once my father, who founded the Gold Bond Stamp Company on $55 of defrayed rent and a dream, explained that
ix x Foreword
we could either take a vacation or reinvest that quarter’s proﬁt back into our company.
We would always vote for vacation, but somehow reinvestment won.
Even into the adult years of my life, the lessons of frugality were taught. Often, after my father drove by my house at night on the way to his own, I would receive a call from him, inquiring, “Are you having a party over there tonight?” That was his way of asking why I had so many lights burning throughout the house. Yet this was a man who built something from nothing and could go to work the next day and gamble millions on a new business venture. It’s an illustration of the Minnesota value system at work—don’t waste, but invest in that which could turn out to be important someday.
Many of the people who built new lives in Minnesota were Germans and Swedes, by any measure two of the most industrious groups of people you will ﬁnd. It’s no wonder, then, that an old Swedish maxim has taken hold here: “Work all you can. Earn all you can. Give all you can.” As you read about enterprising Minnesotans and connect the names to some of the great corporate institutions of our state and nation, you’ll start to see a thread. I believe it’s one unique to our state and largely responsible for the inordinate level of success its citizens have achieved. It has to do with giving back.
In the 1960s, when the Great Society was beginning to take shape, more and more people began to look toward the government for ﬁnancial support. During one meeting that Minnesota business leaders had with President Lyndon Johnson, the architect of growing government largesse, the president noted that although government allowed businesses to deduct up to 5 percent of the pretax proﬁts from their annual tax obligation, few businesses were doing so. That was a cue for some of the assembled leaders, who then and there decided to form the Five Percent Club to donate that amount to community causes.
Today the tradition continues in a successor organization, the Keystone Club, and Minnesota business continues to give back. Why? What does Minnesota business get for its money? Simply put: a future.
It is community assets that attract leaders and companies. Good schools, the arts, parks and public spaces, and a strong social safety net are what hold a business community together by providing a strong foundation for families to live and grow. These things attract leaders, who bring their companies to a place far north of anyone’s typical radar screen. I believe that it is the immigrant society–born tradition of building community and investing in that which is lasting that is behind the unusual success of our state.
But there is another element as well: faith. Be it faith in a dream, faith in the future, or faith in God, those who have succeeded here have all had a faith in something larger than themselves or the here and now. That is another Minnesota trait.
This book was commissioned to capture the stories of many of Minnesota’s most successful entrepreneurs and examine them to uncover the unifying truths of Minnesota success and entrepreneurism. It’s supremely appropriate that this book was published in cooperation with the Carlson School of Management at the University Foreword xi of Minnesota, a business school named for my father and devoted to teaching the lessons of business success—and in doing so becoming a crucible for the entrepreneurs of tomorrow.
No mention of the Carlson School of Management would be appropriate without an accompanying mention of Dean David Kidwell, the “father” of the current school.
As former University of Minnesota president Mark Yudof said at Dean Kidwell’s retirement in 2001 after ten years of service, “David built the Carlson School, both literally and ﬁguratively. Many of the elements associated with the school originated under Dean Kidwell’s leadership, including the new building, experiential learning initiatives, and the many international programs now offered.” Also to be saluted is the current dean, Larry Benveniste, who is continuing the tradition of excellence at the school and building on the high quality of teaching and scholarship that has resulted in the Carlson School’s moving steadily into the top ranks of the nation’s business schools.
As you walk with the entrepreneurs and enterprising souls in this book, I hope you’ll come to understand the nature of success better and more deeply, as have I. It’s an enjoyable journey through an unusual landscape of personal success that is unique in our country, and perhaps the world.
This page intentionally left blank Acknowledgments Enterprising Minnesotans: 150 Years of Business Pioneers was commissioned by the Center for Entrepreneurial Studies at the University of Minnesota’s Carlson School of Management. Doug Johnson, codirector of the center, established the book’s vision and scope while Lois Graham, the center’s associate administrator, managed the project and provided unwavering support. Writers relish such complete support and encouragement, and I want to thank Doug and Lois for bringing me into this rewarding project.
The research required for this book led me to ask many companies for information and photographs. The people who responded were always willing to send me what I needed, and I thank them for taking time from their already busy days to help me.
I especially would like to thank the librarians and staff at the Minnesota Historical Society for their resources and guidance. Many of the interesting stories in this book came from the archives at the Minnesota History Center, and more than half of the book’s photographs were found in its visual database.
Ellen Carroll George accompanied me on several trips to the history center and helped me track down the bits and pieces of information needed to create a book.
Ellen enjoys ﬁnding that elusive fact or photograph; her love of research, of books, and of the buildings that house them has contributed to her ﬁne assistance on this project, and I greatly appreciate her work.
As always, I thank Ellen and my children, Dan, Katie, Allie, and Zack, for their love and support.
xiii This page intentionally left blank Prologue A t the beginning of the 2001 Toys for Tots campaign, a representative of Best Buy appeared on a Twin Cities television news program to hand over a check for $250,000. The meteorologist who accepted the electronics superstore’s gift on behalf of the charity seemed stunned by the sum, and the news anchors wondered aloud if the annual campaign had ever received such an enormous single donation. A delegate from the national Toys for Tots program provided perspective by pointing out that, in 2000, citizens and companies in the Twin Cities area contributed one toy of every twenty-ﬁve collected nationally by 350 such programs.
In fact, Minnesota has long been a leader in charitable contributions. Its companies and citizens—including Best Buy’s Richard Schulze, one of more than forty Minnesota entrepreneurs featured in this book—have inherited a tradition of giving that can be traced to entrepreneurial legends such as Charles A. Pillsbury, James J.
Hill, Frederick Weyerhaeuser, George Draper Dayton, William McKnight, and Hans Andersen.
Enterprising Minnesotans tells the stories of the men and women throughout Minnesota’s rich history who have created exceptional organizations. Some survived high adventure to endure, recovering ﬁnancially from a devastating explosion (Cadwallader Washburn), seizing opportunities during an economic panic (Will Cargill), or avoiding death from freezing or sliding off the road (Carl Wickman). Others overcame seemingly endless setbacks to discover iron ore (Leonidas Merritt), move lumber to market more efﬁciently (Frederick Weyerhaeuser), or introduce a radical medical treatment (Sister Elizabeth Kenny). Many jumped from business to business before settling on the one that would realize their dreams.
xv xvi Prologue
What these entrepreneurs have done best is transform dreams into enduring enterprises. Enterprising Minnesotans tells their fascinating stories of incredible triumph and tragedy, exceptional abilities to overcome adversity, unwavering conﬁdence, bold decisions, and tenacity that often deﬁed reasonable thinking. Most have been white men, especially early in the state’s history, because white men at that time dominated government and commerce to the exclusion of women and people of other races.
While this skews the diversity represented in the book, the overarching goal of this project is to feature entrepreneurs who established companies that continue to excel today.