#287 The Founder of RollsRoyce



In the podcast, the host delves into the life of Henry Royce, co-founder of Rolls-Royce, detailing his journey from poverty to engineering excellence alongside his partner C.S. Rolls. Royce's relentless pursuit of quality, despite not inventing anything new, led to the creation of world-class products. The host references Peter Pugh's book "Rolls-Royce: The Magic of a Name" to highlight Royce's meticulous improvements on existing automobile components, a philosophy paralleled by greats like da Vinci and Jordan, as noted in Paul Graham's essay "Hackers and Painters." Royce's obsession with work and detail, even to the detriment of his health, was a driving force behind the company's reputation for perfection. The podcast also touches on the significant role of Claude Johnson, the "hyphen in Rolls-Royce," in balancing Royce's genius with necessary business acumen. The story of Rolls-Royce is one of unmatched dedication to improvement and quality, with Royce's legacy enduring through the company's continued adherence to his principles.

Summary Notes

Early Life and Backgrounds of C. S. Rolls and Henry Royce

  • C. S. Rolls was educated at Cambridge and was part of London's high society.
  • Henry Royce experienced poverty and hardship, his education being the "university of hard knocks."
  • Both Rolls and Royce were described as having a "certain prickliness."

"The two men could hardly have come from different backgrounds. C. S. Rolls had been educated at Cambridge and moved comfortably in London society. Among his aristocratic and wealthy friends, Henry Royce had known poverty and hardship all of his life."

This quote highlights the stark contrast in the backgrounds of the two founders of Rolls-Royce, which is a significant part of the company's history and ethos.

The Meeting of Rolls and Royce

  • Rolls was engaged in selling foreign cars but wanted to sell English cars due to growing client demand.
  • Rolls found Royce to be the talented partner he had been looking for.
  • Royce's two-cylinder car impressed Rolls with its smoothness and silence, contrary to Rolls' expectations.

"Eventually, I was fortunate enough to make the acquaintance of Mr. Royce, and in him I found the man that I had been looking for for years."

This quote explains how C. S. Rolls' search for a quality English car and a talented partner led him to Henry Royce, setting the foundation for their partnership.

The Philosophy of Improving Existing Products

  • Henry Royce believed in improving existing products rather than inventing new ones.
  • Royce's approach was to enhance each component of the automobile to achieve overall quality.
  • This philosophy aligns with Paul Graham's essay "Hackers and Painters," where he emphasizes that relentless attention to detail leads to great products.

"I didn't invent the automobile. I just took every component of the automobile, improved the quality and the sum of those parts, led to the quality that Rolls-Royce is still known for 100 years after he started the company."

The quote encapsulates Henry Royce's approach to innovation, which focuses on refining and improving existing designs to achieve excellence.

Relentlessness and Attention to Detail

  • Relentlessness and attention to unseen details are common traits among great innovators like da Vinci, Michael Jordan, and Henry Royce.
  • This relentless pursuit of perfection makes the aggregate of small improvements visible and impactful.

"Relentlessness wins because in the aggregate, unseen details become visible."

This quote from Paul Graham's essay, as related to Henry Royce's work ethic, emphasizes the importance of relentless improvement and meticulous attention to detail in achieving success.

Henry Royce's Early Life and Struggles

  • Royce's family background included successful farmers and millers, but his father was not successful.
  • Royce experienced poverty from a young age and had to work hard to support himself.
  • An act of kindness from his aunt allowed him to apprentice at the Great Northern Railway Works.

"By the time Henry Royce was born, his dad was in financial trouble. He died in a poor house at the age of only 41."

This quote provides insight into the difficult circumstances of Henry Royce's early life, which shaped his work ethic and determination.

Career Development and Entrepreneurship

  • Royce's interest in machinery and electricity led him to work as a tool maker and then as an electrician.
  • After the company he worked for went into liquidation, Royce saved money and started his own business.
  • Royce's company initially made small electrical items and eventually moved on to building dynamos.

"Royce had an ability to think about and improve existing machines, existing products."

The quote emphasizes Royce's skill in enhancing existing products, a theme that is central to the story of Rolls-Royce's success and a recurring motif in entrepreneurship.

Henry Royce's Work Ethic and Drive

  • Royce's consistent theme in life was to observe, think about, and then improve existing machines.
  • He worked tirelessly to keep his company afloat during its precarious early days.
  • Royce's work ethic was legendary; he would work alone on Saturdays and stay late into the night.
  • His business faced booms and busts, leading him to venture into making cars during an economic recession.
  • Royce's drive was partly fueled by a desire not to end up like his father, who was sickly and unsuccessful.

"For many years, I worked hard to keep the company going through these very difficult days. I personally kept our few machine tools working on Saturday afternoons when the men did not wish to work."

This quote exemplifies Royce's dedication to his business and his willingness to work alone to ensure the survival of his company.

The Inception of Rolls Royce

  • Royce started making cars due to a postwar slump in 1903, which left his company with spare capacity.
  • The formation of Rolls Royce was driven by Royce's frustration with the inadequacies of existing cars.
  • Royce met CS Rolls through a mutual acquaintance, leading to the establishment of the Rolls Royce company.
  • Royce's approach to car design was not revolutionary but involved significant development and redesigning of existing products.

"Royce decided to make a prototype car of his own."

This quote indicates Royce's decision to enter the automobile industry by leveraging his engineering skills to create a superior product.

Quality and Attention to Detail

  • Royce's products were known for their high standard of perfection due to his thoroughness and attention to detail.
  • He did not rely on revolutionary inventions but focused on refining and improving every aspect of current automobile design.
  • Royce was demanding of both himself and those he worked with, often driving his employees hard but never more than he drove himself.

"He paid great attention to the smallest detail in the result of his personal consideration to every little thing, resulted in the whole assembly being of a very high standard of perfection."

This quote illustrates Royce's meticulous nature and his focus on perfection, which contributed to the superior quality of his motor cars.

Royce's Personal Drive and Influence

  • Royce's personal history of poverty and his father's failure motivated his intense work ethic.
  • His dedication is compared to other driven individuals like Coco Chanel, who also started from poverty and pursued control and independence through their businesses.
  • Royce's principles and attention to detail became the foundation of the Rolls Royce organization's culture.

"Henry Royce ruled the lives of the people around him, claimed their body and soul even when they were asleep."

This quote reflects the profound impact Royce had on those around him, driven by his personal experiences and ambitions.

Product Quality and Reliability

  • Royce's focus on quality resulted in reliable cars that were not revolutionary in parts but excelled as a whole.
  • The reliability of his cars was demonstrated by a vehicle returned in perfect running order after 100,000 miles.

"Reliability was the strongest feature of his cars."

This quote captures the essence of Royce's approach to product quality, emphasizing the overall reliability and excellence of his automobiles.

Henry Royce's Commitment to Quality and Focus

  • Henry Royce's meticulous attention to detail and pursuit of perfection led to a standard of reliability unmatched by competitors.
  • Royce's control over both the design of the cars and the factory buildings exemplified his hands-on approach.
  • The decision to concentrate on perfecting a single model, the six-cylinder Silver Ghost, was a key strategy for Rolls-Royce.
  • The Silver Ghost, launched in 1908, became an iconic vehicle known for its smoothness and reliability.

"And now that Royce had produced a model superior to all its rivals, Rolls Royce would devote its energies exclusively to this model."

This quote highlights Royce's strategic decision to focus solely on the superior Silver Ghost model, ensuring the company's resources were dedicated to perfecting it.

Marketing and Innovation in the Early Automotive Industry

  • Rolls-Royce's marketing highlighted the Silver Ghost's smoothness with a demonstration of a glass of water not spilling at high engine revolutions.
  • Overregulation in Britain, such as the Locomotives Act, hindered the development of the automotive industry and allowed other countries to advance.
  • Thomas Edison criticized British legislation for stifling the growth of the car industry.

"In Britain, the development of cars was held back by laws designed to protect a former way of life and the interest of the railway companies."

This quote emphasizes the detrimental impact of overregulation on Britain's early automotive industry, suggesting it was a significant factor in the country losing its lead in the sector.

Henry Royce's Health and Work Ethic

  • Royce's dedication to his work led to health issues, including a serious illness at the age of 48.
  • Despite his health problems, Royce continued to contribute to the company from his bed, sending designs and improvements to the factory.
  • Claude Johnson, Royce's business partner, played a crucial role in managing the company and even saved Royce's life by encouraging him to rest.

"Royce's mind undistracted by the management in the factory, he kept his staff busy with a continual stream of ideas from his very fertile brain."

This quote encapsulates Royce's relentless drive for innovation and improvement, even when distanced from the day-to-day operations of the factory.

Competition and Industry Dynamics

  • Rolls-Royce benefited from the loss of focus by competitors such as Napier, whose founder's waning interest led to a decline in quality and the departure of talented engineers.
  • The quote from Warren Buffett about the importance of focus reflects Royce's philosophy and contrasts with Napier's approach.
  • Rolls-Royce's foray into airplane engine manufacturing during World War I was initiated by Royce's independent decision-making, despite the board's reservations.

"At the same time as the Rolls Royce board was deciding not to make airplane engines for the government, Royce was already designing one."

This quote illustrates Royce's initiative and disregard for the board's hesitance, showcasing his commitment to innovation and quality in new ventures, such as airplane engine production.

Rolls Royce Bible Creation

  • Henry Royce's memos were compiled into a book known as the Rolls Royce Bible.
  • The book was intended as a guide for Rolls Royce engineers.
  • It highlighted Royce's meticulous approach to engine design and manufacture.

In the opinion of the board of directors, the memo and letters written by Mr. Royce in connection with the design, testing and manufacture of these engines are so admirable as evidence of extreme care, foresight and analytical thought, that the directors decided to have them printed and bound in order that copies may be available for study.

This quote signifies the high regard the board of directors held for Royce's work, which led to the creation of the Rolls Royce Bible as a testament to his engineering excellence.

Engine Quality and Enemy Praise

  • Royce's engine design was so advanced that even the enemy during wartime acknowledged its superiority.
  • A British airman inadvertently landed at a German base, leading to the enemy's inspection and praise of the engine.

One of the most interesting of hostile aeroplane engines on the highest plane and respective design is undoubtedly the Rolls Royce.

This quote reflects the exceptional quality of Royce's engine design, which earned respect from adversaries.

Obsession with Control

  • Royce and Claude Johnson were determined to maintain control over the quality of their engines.
  • They resisted external pressure to license production during wartime, fearing it would compromise quality.
  • Post-war market conditions prompted discussions about merging with other companies, which they rejected to retain control.

I prefer to be absolute boss over my own department, even if it's extremely small, rather than to be associated with a much larger technical department over which I only had joint control.

Royce's preference for control over his work, even at the expense of company size, illustrates a key aspect of his business philosophy.

Complementary Partnership of Royce and Johnson

  • Claude Johnson complemented Henry Royce's engineering genius with his organizational skills and understanding of public relations.
  • Johnson's ability to manage human relationships balanced Royce's lack of interpersonal skills.
  • Johnson's actions, including taking Royce on a trip to Europe, were crucial for Royce's well-being and the company's success.

Perhaps Johnson's greatest contribution to Rollsroyce was his understanding of Royce himself and his unselfish action in 1911 in taking him on an extended trip to Europe, which almost certainly saved Royce's life.

This quote underscores the importance of Johnson's role in not only the business but also in Royce's personal life, highlighting the benefits of their partnership.

Distributed Company Structure

  • Rolls Royce operated with a distributed structure, separating design, direction, and production.
  • Design was conducted in the south of France, the board of directors was in London, and production remained in Derby.
  • Royce's authority was paramount, and he worked in seclusion to minimize distractions.

All designing was carried out in the south of France... Royce's decision was final.

The quote describes the unique operational setup of Rolls Royce, with Royce's design team working in isolation to focus on innovation and quality.

Henry Royce's Work Ethic and Legacy

  • Royce was known for his perfectionism and continual improvement of designs.
  • His work ethic set a standard for Rolls Royce that persisted beyond his lifetime.
  • Royce's passion for his work was evident until his death, as he remained involved in design and innovation.

Whatever is rightly done, however humble, is noble.

Royce's philosophy, reflected in this quote, emphasizes the nobility of work done with care and precision, regardless of its nature.

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