Charles Schwab Wikipedia

Steel magnate Charles M. Schwab had management skills that were way ahead of his time.

And one of his most effective management tactics was formulated with a piece of chalk and the number "6."

During the early 1900s, Schwab wanted to increase the amount of steel his workers produced.  But none of his methods worked. Not even threat of firing.

So he devised a simple plan to stimulate good, old-fashioned, healthy competition.

According to Carnegie's book "How To Win Friends & Influence People," the story went something like this:

"This conversation took place at the end of the day just before the night shift came on. Schwab asked the manager for a piece of chalk, then, turning to the nearest man, asked:

'How many heats did your shift make today?'


Without another word, Schwab chalked a big figure six on the floor, and walked away. When the night shift came in, they saw the six and asked what it meant. The big boss was in here today the day people said. He asked us how many heats we made, and we told him six. He chalked it down on the floor.

The next morning Schwab walked through the mill again. The night shift had rubbed out six and replaced it with a big seven.

When the day shift reported for work the next morning, they saw a big seven chalked on the floor. So the night shift thought they were better than the day shift did they? Well, they would show the night shift a thing or two. The crew pitched in with enthusiasm, and when they quit that night, they left behind them an enormous, swaggering 10. Things were stepping up.


Schwab's strategy instantly created a rivalry between the day and night shift crew because it's natural to try to enhance the status of your own team.


Many organizations today still follow Schwab's simple strategic move by posting employees' quota or quantitative output for everyone in the company to see.

NOTE: The author learned this story during  a Dale Carnegie training class, which she registered for after hearing Warren Buffett say it "changed [his] life in a big way". Carnegie passed away in 1955, but his self-improvement courses have trained more than eight million people and are represented in more than 80 countries.