"Bold Entrepreneur: A Life of James B. Duke"

By Robert F. Durden

Any one closely watching the neatly dressed young man as he walked the streets of lower Manhattan on a spring night in 1885 might well have been puzzled. He frequently stopped to scrutinize, maybe even count, discarded cigarette packets. (He would not have used the term, but he was quietly doing market research). And if he saw a straight pin pointed toward him on the sidewalk, he picked it up, for good luck, and stuck it on the underside of his coat lapel.

Twenty-eight-year-old James Buchanan Duke '" 'Buck' only to his family and friends of long-standing '" had come to New York a year earlier to establish and then manage a branch factory of W. Duke Sons and Company, tobacco manufacturers based in Durham, North Carolina. Already richly experienced in the world of tobacco, the youngest of the Duke family also had established a reputation for bold, shrewd leadership in the family business.

Soft-spoken and even-tempered, he was clean-shaven, solidly but slimly built (at that age), a bachelor, and loved his work with a surprising passion. 'I hated to close my desk at night,' he later recalled, 'and was eager to get back to it early next morning. I needed no vacation or time off'.There ain't a thrill in the world to compare with building a business and watching it grow before your eyes.'

Young Duke made it a practice to be in the factory in time to see the employees arrive, and then during the day he made frequent forays through the factory to examine the stock on the work tables. Some employees came to believe that he had an uncanny knack for spotting the only faulty pack of cigarettes in a lot containing hundreds of perfect ones. When he occasionally sent for an already-packed carton of goods, he would open it, examine each package, and if a label should be pasted on in a crooked fashion, he sent for the superintendent. In short, Duke kept the work force on its toes.

After a twelve-hour day in the office, Duke grabbed a cheap meal in a nearby eatery and then began his market-oriented nocturnal operations. As he had earlier visited tobacco retailers across the South and West when he 'drummed' the trade for W. Duke Sons and Company, so he now continued that practice in New York. A pioneer Manhattan tobacconist later remembered the first time Duke came into his cigar store: 'He was tall, gawky, reddish (hair) with a southern accent as thick as butter.' Duke wanted to sell some of his 'newfangled machine-made cigarettes' on consignment, but the merchant insisted he would not handle cigarettes and that his customers did not want them. Duke seemed to take the rebuff in stride.

A few months later, the tobacconist continued in his remembrance, a trade paper reported that Duke had opened a loft factory on Rivington Street in lower Manhattan. 'Then the billboards began to flare out with Duke ads and the newspapers too,' the merchant recalled. 'I got circulars offering camp chairs and crayon drawings, if I'd order so many thousand Duke cigarettes. Customers started asking for the cigarettes by name.' The climax seemed to come when Duke began putting into each package a small picture-cared of a famous actress, an athlete, or the flags of different nations. 'As I look back on it now,' the merchant concluded, 'I think this one stunt, more than any other, really put the cigarette over with the public.'

While this young Tar Heel was indeed hard-driving and ambitious, not even he could have realized that within five years W. Duke Sons and Company would be by far the largest cigarette producer in the nation. Not only that, but he would employ that commanding position in such a way as to take the lead in forming in 1890 the great combination '" holding company actually '" known as the American Tobacco Company. And having expanded the vast corporation's control over most of the nation's tobacco industry throughout the 1890s, he would in 1901 invade the British Isles and end up heading a pioneering multinational and globe-circling enterprise known as the British-American Tobacco Company.

What prepared James B. Duke for this amazing achievement? He grew up in a South left poverty-stricken and desolated by the Civil War, yet by age thirty-three in 1890, he was well on his way to becoming vastly rich and the head of what would become one of the largest and most powerful American corporations.

More to the point, what strategies and skills did he use after 1890 that might help explain his achievement?