Daniel McCallum was good at a lot of things. He was a good carpenter and an engineer who invented a truss used in wooden railroad bridges. We’re not sure how he learned all this because there’s very little on the record about him from when he dropped out of school at about the fifth grade until he turned up as the new General Superintendent of the Erie Railroad in 1854.
That’s where the 49-year-old McCallum began to show his real genius. Daniel was very, very good at organizing things and that was precisely what the railroads needed just then.
Railroads in the US were just beginning three-quarters of a century of expansion. In 1840 there were less than 3000 miles of track. By the start of the Civil War, the figure would the 1000 percent higher, more than 30,000 miles. Individual railroad companies grew at the same pace and that growth created problems.
As McCallum noted in a memo to his board, you can manage a railroad with fifty miles of track in pretty much the way you manage a general store or a small factory. But when the railroad had 500 miles of track, you had to do something different. You needed more organization.
McCallum started with principles. Businesses didn’t need to do that before. McCallum wrote six principles of organization. Modernize the language and it reads like modern management theory. Responsibilities should be divided. Authority should match responsibility.
Daniel McCallum Lesson Nr 1: You can manage a very large organization using a few, simple principles.
The principles were important. Describing who had what authority and who was responsible to whom was another matter entirely. Words were fine to outline the principles, but McCallum needed another way to communicate relationships. His solution was to create the first organization chart for a business.
Daniel McCallum Lesson Nr 2: When you illustrate your concepts, they become easier to understand.
Re-organization wasn’t enough. The people responsible for decisions needed timely information. Up until then, telegraph companies were independent, but McCallum created a telegraph company controlled by the railroad. That allowed the railroad to use the telegraph to aid in scheduling and coordination and to use it to send important information from the field to headquarters.
Daniel McCallum Lesson Nr. 3: New technology can help you achieve your goals, but it probably won’t happen without action on your part.