“..one of my favorite stories involves a very great businessman named Carl Braun who created the CF Braun Engineering Company.” – Charlie Munger
In 1907, Carl F. Braun graduated from Stanford University with a degree in Mechanical Engineering. Two years later, with $500 in his pocket ($15,000 in today’s dollars), he started CF Braun & Company. The products he developed were used in office buildings, power plants, oil refineries, and ships. For many years, he was a one man force, as the company’s only salesman.
In 1918, he pivoted and saw an opportunity to focus on petroleum processing plants and oil refineries. He purchased a piece of land in Alhambra, just outside of Los Angeles, and in 1922 built a maufacturing facility and administrative offices. It was the perfect location right in the middle of an oil producing area with easy transportation and close to a port.
The company flourished and was an innovator in cast iron fabrication and electric welding. By the 1930’s, the company expanded in to Texas and New York. By the 1950’s the company had over 600 employees and had annual revenues of $100+ Million (inflation adjusted: $1 Billion today).
Even more so than the great company he built, Carl Braun was known for the culture he built at CF Braun & Company. If you don’t believe me, old employees and stakeholders still talk about their experiences and positive impacts the company had on them. Here is a recent article written by a past employee.
This is a company that hasn’t been around since 1989! What the heck were they drinking down there in Alhambra.
The culture permeated from the top down. Carl Braun was obsessed with maximizing the potential of every person in his company. He wrote several books which were mandatory reading for managers and employees. You can still find some of these books in circulation and they have quite a cult following. Management and Leadership is thought to be one of the best management and leadership books ever written:
- Management and Leadership (1948)
- Presentation for Engineers and Industrialists (1956)
- Corporate Correspondence (1958)
- Fair Thought and Speech (1953)
- Letter Writing in Action (1947)
Braun felt it was his and his managers duty to teach. In Management and Leadership there is a section called “The Doers Must Teach”:
"Our field of endeavor, industry, unlike medicine for instance, is one of those fields in which the teachers are not the doers. Our teachers, whether in grade-school, high school, or college, seldom have had industrial experience. Few have had even slight contact with industry. And fewer still have current contacts. Not understanding industry, they too often judge it by its worst members, and so develop for it an active disrespect.
The result is that, with rare exceptions, teachers do not find out from industry what industry needs from them. Nor do they seek from industry the teaching-methods that the better industrialists have developed. The gap is enormous between the abstract teachings of our schools and the concrete needs of industrial man. It is this gap that we industrial leaders must fill. We must fill in what’s missing. And we must make the whole a living growing thing."
Braun was obsessed with presentation and communication. In, A Lesson on Elementary, Worldly Wisdom As It Relates To Investment Management & Business, Charlie Munger references Braun’s five W’s:
"His rule for all the Braun Company’s communications was called the five W’s ‐ you had to tell who was going to do what, where, when and why. And if you wrote a letter or directive in the Braun Company telling somebody to do something, and you didn’t tell him why, you could get fired. In fact, you would get fired if you did it twice.
You might ask why that is so important? Well, again that’s a rule of psychology. Just as you think better if you array knowledge on a bunch of models that are basically answers to the question, why, why, why, if you always tell people why, they’ll understand it better, they’ll consider it more important, and they’ll be more likely to comply. Even if they don’t understand your reason, they’ll be more likely to comply.
So there’s an iron rule that just as you want to start getting worldly wisdom by asking why, why, why, in communicating with other people about everything, you want to include why, why, why. Even if it’s obvious, it’s wise to stick in the why."
And you better look and act the “Braun Way”. Here are some other funny stories of Carl Braun told by old employees (source: ValueWalk):
“I had heard that Carl Braun had talked to a young engineer about his hair being too long. The engineer said he didn’t have enough pay to always get haircuts. So Braun went to payroll and increased his pay by $2.00 a month or something and told him to get it cut.”
“I began getting Christmas cards from suppliers and taped them on the wall. The next morning they were sitting on my desk in a neat pile. I assumed they had fallen down so I again taped them with more tape. The next morning they were sitting on my desk with a poorly written note saying if they were on the wall again I was fired and signed ‘guard’.”
Carl Braun died of a heart attack at the age of 69 in 1954. The company would remain in the family’s control until it became part of Santa Fe International in 1980. CF Braun, the subsidiary, was then sold to Haliburton in 1989. The CF Braun company campus in Alhambra, CA was sold for $75 million in 1999 to real estate developers.
If you enjoyed this article, you should become an Intelligent Fanatics member. As a member, you get our current and future Intelligent Fanatics books and case studies for free, as well as the ability to participate here on our community. Join Us.