By Nathan Raab
Yes, that Alexander Hamilton. Think you know how to run an organization? He is a couple centuries ahead of you.
In a letter that has been for generations in a private collection, a letter our firm handled earlier this summer, the nation’s first Secretary of the Treasury laid out his vision for how to not only run the organization but also to allow it to evolve. It’s “Management 101″ from the school of Hamilton.
Some background. Hamilton’s rise to leadership was rapid. More than a decade younger than Thomas Jefferson, two decades the junior of his mentor, George Washington, Hamilton honed his skills as an apprentice clerk, tracking inventories and shipments for a mercantile business in the Caribbean. Within a decade of this, he would be serving under George Washington in the Continental Army, and in approximately 20 years, he would be running the nation’s finances. Washington recognized his superior intellect and organizational skills, as well as his flexible and pragmatic mindset.
Here are 10 things Hamilton’s letter teaches us about what in practice he saw as constituting effective management. The letter is his philosophy in action. In reading this, it is helpful to remember Hamilton’s employees were essentially collecting taxes on goods being imported into the United States, so his advice relates to that subject.
Dateline: New York, October 2, 1789, to Stephen Smith, his collector in what is today the state of Maine.
1) Communicate consistently and regularly: This letter is called a circular. It is comparable to when today an executive might send a regular memo of important information to a leadership team. It is written “circular” at the opening of the letter so that the recipient would know. The collectors of customs, who were stationed in the various ports, received such communications with regularity, and major announcements usually contained the same messages sent to all.
2) Make it easier for your employees to communicate with you: In this letter, he sends a form he created for his collectors to use in reporting back to him. He also sets expectations of how often he is to receive these reports. ”In mine of the 22nd of September, I directed you to render me a Weekly Account of your receipts and payments. I now enclose you a form for rendering this account, which I trust will be punctually complied with.”
3) Never forget: your people on the ground are your eyes and ears, and they can help you evolve: “…Carefully note and from time to time communicate to me whatever may serve to discover the merits or defects of [my] plan, and to point out the means of improving it.”
4) You can’t predict everything, so expect the unexpected: “Imperfections and inconveniences will naturally present themselves in practice, which could not have been foreseen in their formation; it is of the greatest moment that the best information should be collected for the use of the Government as to the operation of those which may have been adopted.”
5) Listen to criticism, even if it’s crazy: “Though the complaints of the Merchants will not always be infallible indications of defects, yet they will always merit attention, and when they occur, I shall be glad to be particularly informed of them.”
6) Ask your employees for their input: “You will doubtless have observed, that it was in the contemplation of Congress to employ Boats for the security of the Revenue against contraband. I shall be glad to have your ideas as to the expediency of employing them in your quarter, and (if any appear to you necessary) of the number and kind you deem requisite; their equipments, and the probable expense.”
7) Fix problems at the ground level: “It has been very much apprehended that the number of Ports in several of the States would conduce to great evasions of the duties. It is my wish to be informed how far experience has justified this apprehension, and what can be done to correct the Mischiefs which may have ensued, avoiding as much as possible the inconveniences which the multiplication of Ports was designed to obviate.”
8) Encourage innovation broadly: “In hinting these particulars it is not my aim to confine your attention to them only; It will give me pleasure to find that your observation has been as diffusive as the object is extensive.”
9) Set expectations early: This letter is just the second circular of serious consequence he sent, and he wrote this less than a month after he became the Secretary.
10) Collect data. Even before the digital age, Hamilton was crunching numbers and gathering information. The entire premise of this letter is data collection, positioning himself as the collector and analyzer of that information.
That’s a lot to gather from one letter. Here is a larger image of the first of the three pages. Learn anything else?