Long before the likes of Steve Jobs, Bill Gates and Jeff Bezos, Henry Ford was considered the mastermind of business success.
As the creator of the Ford Motor Company he helped introduce motor cars to ordinary Americans and in doing so, reinvented many of the principals of business.
Known as an industrialist, he is credited as the creator of “Fordism” – a movement which saw the mass production of inexpensive goods coupled with high wages for workers.
Along the way he was renowned for his commitment to the consumer, an ethos which ultimately saw him build an empire and become one of the wealthiest and most well-known business operators of his time.
Here’s an insight into 10 lessons from Henry Ford which still resonate in business today.
Know your market
“If I had asked people what they wanted, they would have said ‘faster horses’”
Henry Ford knew his market. He knew his customer’s painpoints and what they needed even before they did, but this wasn’t just based on intuition. Long before Ford created the game-changing model T Ford, he painstakingly researched who would buy it and the type of features they would seek.
Then he set about creating a product that would meet his market and their price point. The outcome was a motor car that was far more than a curiosity. Produced from 1908 to 1927, the Model T was the first automobile that was widely accessible to the American public, due in no small part to its affordability, which was achieved through mass assembly.
Quality and service before profit
“There is one rule for the industrialist and that is: make the best quality goods possible at the lowest cost possible, paying the highest wages possible.”
A standout feature of Ford was that he created a product accessible to the masses, while also paying a fair wage to his employees. He firmly believed that if you produce a quality product, the market will embrace it.
Meanwhile, although mass produced, that product did not come at the expense of quality or the welfare of people delivering it.
He is famously quoted as saying: “A business absolutely devoted to service will have only one worry about profits. They will be embarrassingly large”.
The devil is in the detail
“Quality means doing it right when no one is looking”.
Ford believed people could feel quality, and he was right. A customer will quickly understand when shortcuts have been taken or when an entrepreneur’s passion is not in the product or service they deliver.
Even if they cannot see it, a consumer can feel it when the attention to detail is lacking, and the execution fails to meet the promise.
The Model T motor car rose to fame on the reputation it was simple to drive and easy to repair.
It also became increasingly affordable. When first introduced in 1908 a Model T cost $825 (US$23,010 today) and each year it became cheaper. By 1916, the price dropped to $360 ($7828 by today’s standards) and sales reached 472,000.
By the ‘20s, the majority of American drivers had learned to drive in the Model T.
Treat failure as opportunity
“Failure is simply the opportunity to begin again, this time more intelligently.”
Call it a growth mindset or optimism, but Ford has many quotes that speak to his ability to turn failure into learning, and ultimately opportunity.
He was renowned as quick to move on from a setback, and as part of his company culture he eschewed the need to assign blame, instead noting: “Don’t find fault, find a remedy”.
Look to your strengths, not your competition
“The competitor to be feared is one who never bothers about you at all, but goes on making his own business better all the time”.
Ford firmly believed the true strength of his product lay within his own company and people. He was less concerned with competition than he was with efficiency and constant improvement.
This allowed him to innovate, improve and excel within his industry, breaking many conventions along the way.
Know your business philosophy and espouse it
“A business that makes nothing but money is a poor business.”
Possibly one of the greatest attributes of Ford and his company was that they implicitly knew who they were, the market they serviced and the value that they offered.
Coupled with this deep insight into how they catered to that market, they became a brand synonymous with quality and value.
This allowed them to offer a promise to their market and consistently deliver it, in a product that was about far more than making money.
The customer first
“Employers only handle the money – it is the customer who pays the wages.”
Ford was acutely aware his business was only successful because of the customers who had faith in his product. Rather than catering to the rich and hiking up his prices, he offered a vehicle that was affordable and reliable for all.
In the interim, he offered wages that ensured his employees could afford the products he was making. By engendering such loyalty in both his staff and consumers, he established a motor company that is still a recognisable brand today.
Leadership takes many forms
“You don’t have to hold a position in order to be a leader.”
In addition to being renowned as an entrepreneur and industrialist, Ford carved out an exceptional reputation as a leader.
Aside from offering high wages, he also introduced the eight-hour work day, and long before it was a socially trend, he offered equality in the workplace.
Ford employed women, people of different nationalities and people with disabilities, as the Center for Work Life explains.
“In 1916, Ford employed individuals representing 62 different nationalities. At that time, the company also employed over 900 people with disabilities. Through the years, Ford went on to set standards of non-discrimination and equalize opportunities in many ways”.
Importantly, not only was he in tune with the financial needs of his staff, he also sought to improve the lives of his customers, allowing them to feel valued in the quality products he offered.
Keep learning
“Anyone who stops learning is old, whether at 20 or 80. Anyone who keeps learning stays young.”
Ford started his lengthy career of innovation at the age of 15, after being given a pocket watch by his father. He disassembled and reassembled it, soon gaining a reputation amongst friends and family as a watch repairman.
At 12, he first saw a steam engine in operation and then set about replicating it in the workshop at is farm, building both a steam tractor and a steam powered car.
Over the years he continued honing his love for innovation, working as a machinist, steam engine repairman and then creating his own two-cylinder car.
Eventually his experimental nature would capture the imagination of Thomas Edison and other business magnates, and the Ford Motor company was born.
It takes a team
“Coming together is a beginning; keeping together is progress; working together is success.”
Much has been written about Ford’s revolutionary approach to his workforce.
He astonished the world in 1914 by offering a $5 per day wage ($130 today), which more than doubled the rate of most of his workers. The move was a huge success, reducing employee turnover and allowing his workers to buy the cars they created, which ultimately boosted profits.
Meanwhile, he also believed workers would be more efficient if given leisure time. After implementing the eight-hour work day, he introduced the 40-hour work week, noting workers put more effort into their work time after sufficient leisure.
“It is high time to rid ourselves of the notion that leisure for workmen is either ‘lost time’ or a class privilege,” he said.
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