June marked the 41st anniversary of the first use of the barcode, when a pack of gum was scanned using a NCR model 255 cash register.
The UPC bar code has revolutionized the way we do business, so in honor of this monumental event, we’re throwing it back to the man who started it all, John H. Patterson.
He founded National Cash Register in 1884 and over the course of his life, until 1922, he created the framework to inspire innovation for years to come.
We asked Mark Bernstein, historian and writer of “Grand Eccentrics” and most recently, “McCulloch of Ohio: For the Republic,” to shed some light on his legacy.
1. He was kind of a health nut
According to Dayton History, Patterson was adamant in the belief that clean, attractive factories would lead to healthier, more productive employees.
His attention to detail would lead him to instate routine weigh-ins for NCR employees, every six months, in an effort to monitor their health. NCR employees who were found to be underweight were issued free malted milk.
Patterson’s strong convictions about a healthy workplace drove him to purchase ‘fireless’ locomotives for use on the NCR company grounds: the Rubicon, the South Park, and the Dayton. The Rubicon, which was one of the first locomotives that Patterson purchased, is on display at Dayton History.
“Patterson felt that ‘fireless’ locomotives were the perfect solution to ridding his factory grounds of the dirty coal smoke produced by standard switching engines.”
2. He was known for excessively firing people – sometimes quite literally
When Patterson fired someone, he really meant it.
According to Mark Bernstein, he’s been known for literally firing his employees on a few occasions. In fact, it’s rumored that the origination of the phrase “you’re fired,” when dismissing someone, stems from these accounts.
An NCR executive was on his way back from a business trip when he noticed something unusual from his cab: his desk and belongings on the lawn. He proceeded to watch as a NCR maintenance employee began to pour kerosene on them and set it ablaze.
Another time, when he was dissatisfied with his accounting department, he decided to take them on a tour of the facility. Patterson was convinced that they didn’t truly understand the business because by the time the accounting reports came in they were no longer useful. After he took them to the manufacturing facility and the rest of the campus, they ended up in the boiler room where he asked, “What can the boiler burn?”
“Paper,” they replied. They were instructed to throw their ledgers in, but without their ledgers they didn’t have a job.
Dayton History did not have any information available to support this rumor.
3. He really cared about his employees
The Panic of 1893 set off a four-year economic depression. So in 1894, when $50K worth of defective cash registers were returned from England, Patterson was determined to find the reason.
The employees “did not care whether they turned out good or bad work,” Patterson said. “Then I looked further into conditions and I had frankly to confess that there was no particular reason why they should put heart into their work.”
One of the most notable changes he made, after his inspection of the NCR manufacturing facilities, was to replace the walls with 80% glass so that work could be done in natural light. This was unheard of in the late 19th century, when sweatshops were still a common practice in the United States.
Patterson also removed debris, added ventilation, shielded dangerous equipment to protect employees, and increased their wages. He eventually instituted lunchtime lectures so NCR employees would maintain a general interest in the world.
Eventually these practices began to outgrow the space, and the NCR auditorium was built on this idea that employees needed to keep their minds active if they were going to remain productive employees.
Patterson would take this idea so far as to build Sugar Camp, the first-of-its-kind summer sales training facility. It began as a summer community of tents, but would eventually be replaced by Adirondack-style cabins in the 1930s that would house the U.S. Navy W.A.V.E.S in WWII. These women “were part of a top secret project based at NCR to build the Bombe, a code breaking machine that cracked the German enigma code.”
4. He created the first direct mail campaign…
When Patterson first acquired the patent for the cash register in 1884, NCR’s 13 employees began to produce 30 cash registers a month, but there was no discernable demand for the device. Patterson decided that too few people knew about the machine he was offering. He sent six pieces of mail a week for three weeks to a list of 5,000 potential customers regarding the national cash register.
Patterson incidentally created a modern sales technique that is known today as direct mailing. This tactic was especially helpful for salesmen because their prospective customers would have information about the product before they pitched. Through direct mail, Patterson was able to build an international clientele.
By 1914, 30% of NCR sales came from overseas.
5. …And effectively created the “modern salesman”
NCR was one of the first businesses to assign a salesman a guaranteed territory and pay commission. These salesmen were among the first to implore the first “canned” sales pitch.
In 1887, Joseph H. Crane was NCR’s best salesman. He was able to lead the company in sales because he admittedly gave an identical sales talk each time he met with a customer. His sales technique was taken down word for word and used to create a 16-page manual entitled “How I Sell a National Cash Register.” His manual helped other salesmen make the correct points in the right sequence, but also to overcome customer objections.
For instance, if a prospective customer claimed that he did not need a cash register because he trusted his employees, the salesman would reply with, “To whom does a man lose money? The people he trusts or the people he doesn’t trust?”
It was important for NCR salesmen to look the part as well. To inspire customer confidence, they stayed in the best hotels and dressed with fashionable dignity. This idea coincides with our current perception of salesmen today.
"Nothing denotes the gentleman more," Patterson wrote, "than earnestness and politeness."
6. He predicted the flood before it happened
Many know that NCR helped Dayton with the flood, but did you know that Patterson actually predicted and prepared for a natural disaster before it happened?
On the Monday after Easter, in 1913, snow was melting and at the same time it rained relentlessly. The following day at 6 a.m., John Patterson inspected the levees surrounding the river and decided they would not hold. He immediately took action, called his executives to a meeting at 6:45 a.m. and said, “Dayton will have an awful flood today.”
The NCR manufacturing plant stopped building cash registers, but instead started to build rowboats while the commissary baked loaves of bread. Purchasing agents were sent to the countryside to collect emergency supplies. “Within 15 minutes, [Patterson] had reorganized his entire company to cope with a disaster that had not yet occurred.”
The levees cracked soon thereafter and at 8:30 a.m., the first wave of water, 5 to 8 feet deep, swept through downtown Dayton. The first of 275 NCR rowboats set out to rescue the stranded Daytonians from their rooftops and brought them back to company grounds to seek refuge. NCR provided food, clothing, and shelter for thousands of people. In fact, the company spent two-thirds of its 1913 profits on flood relief.
One journalist wrote, "What Dayton might have done without John H. Patterson ... can only be a matter of speculation, inasmuch as The Cash, as they familiarly speak of it in Dayton, was for days the stricken city's brain, nerves, almost its food and drink.”