Sometimes to go forward, it can help to look backwards. As clever and innovative as we often think we are, most of the issues we face today have been faced and overcome by others in the past, providing lessons that are still useful today.
There have been many influential leaders over the course of human history, but one who may not occur to many people as an innovative leader is Henry Ford. Although many of his personal views have been highly criticized, his forward-thinking business ideas challenged the status quo in the early 20th Century as he built the world’s largest company and captured 75 percent of the automotive market.
Ford may not have known about the discipline of organization design more than a hundred years ago, but he definitely understood its key principles. Many of Ford’s techniques correspond to the sides of our organization Cube Model.
Here are some quotes reflecting Ford’s guiding principles, (grouped by components of the organization cube) to illustrate how they can be used today to help us learn from the past.
“We now have two general principles in all operations – that a man shall never have to take more than one step, if possibly it can be avoided, and that no man need ever stoop over.”
“Along about April 1, 1913 we first tried the experiment of an assembly line.”
Henry Ford is best known for implementing the first moving automotive assembly line, which changed our concept of mass production forever. Ford focused on understanding the work that needed to be done and making it as efficient as possible. He took what was thought of at the time as necessary work and transformed it into a strategic differentiator. It didn’t happen overnight, but over a period of several years, he was able to reduce the cost of the Model T from $900 to less than $250, fulfilling his vision of a quality car for the masses.
Structure & Governance
“And so the Ford factories and enterprises have no organization, no specific duties attaching to any position, no line of succession or of authority, very few titles, and no conferences. We make the individual responsibility complete. The workman is absolutely responsible for his work.”
The main purpose for an organization structure is to provide clear lines of responsibility and accountability. To streamline the work, Ford found that making people clearly accountable for the work they did eliminated the need for complex organization structures.
Information & Metrics
“Our machines are placed very close together – every foot of floor space in the factory carries, of course, the same overhead charge. The consumer must pay the extra overhead and the extra transportation involved in having machines even six inches farther apart than they have to be.”
One of Ford’s most impressive accomplishments was using information to drive efficiencies. He tracked many operational and strategic metrics to gather data that helped him make decisions. On the factory floor, his measure of productivity was of utmost importance. He was far ahead of his time, as the quote above reflects. This was all done without computers, which is even more amazing today.
People & Rewards
“The payment of high wages fortunately contributes to the low costs because the men become steadily more efficient on account of being relieved of outside worries. The payment of five dollars a day for an eight-hour day was one of the finest cost-cutting moves we ever made, and the six-dollar day wage is cheaper than the five. How far this will go, we do not know.”
One of the most famous ideas put forth by Ford was the idea of rewarding his employees with higher wages and profit sharing. This was unheard of at the time, and his concept created loyalty that was unmatched in the industry.
“Everything can always be done better than it is being done.”
Ford was driven by constant improvement. He persistently challenged the status quo, which eventually led to the implementation and refinement of the assembly line. Without this relentless focus on improvement, his vision would not have been realized.
Leadership & Culture
“Sometimes it is the men ‘higher up’ who most need revamping – and they themselves are always last to recognize it.”
As leaders, we must be prepared for change and ready to lead it. It is easy to rest once we make it to the top, but that is not what a leader does.
“Unless we in our industries are helping solve the social problem, we are not doing our principal work. We are not fully serving.”
The culture at Ford prioritized providing for the employees above profits. Ford was adamant that organizations had a social responsibility to serve others. He was sure that if people were treated fairly, profits would follow.
“When a business becomes congested with bad methods; when a business becomes ill through lack of attention to one or more of its functions; when executives sit comfortably back in their chairs as if the plans they inaugurated are going to keep them going forever; when business becomes a mere plantation on which to live, and not a big work which one has to do – then you may expect trouble.”
We must always be improving and those that fail to adopt strategies to support that goal will not be successful. The pace of change today is far greater than it was back during Ford’s time, yet he understood this key principle. One criticism of Ford in later years is that he actually stopped innovating. That allowed other companies to copy his methods and eventually out-compete Ford.
“I will build a motor car for the great multitude. It will be large enough for the family but small enough for the individual to run and care for. It will be constructed of the best materials, by the best men to be hired, after the simplest designs that modern engineering can devise. But it will be so low in price that no man making a good salary will be unable to own one – and enjoy with his family the blessing of hours of pleasure in God’s great open spaces.”
This statement of his future vision was met with ridicule and a general opinion that Ford didn’t understand business. To be successful, leaders must define the vision and align the entire organization around that vision, even when others don’t believe it is possible. If nothing else, Ford was bold. He was not shy about what he wanted Ford Motor Company to do – even when the idea of owning a car was unheard of.
The organization design principles evident in these quotes still apply today, even though they originated more than 100 years ago. How can you use these concepts to take your organization to the next level, just as Henry Ford did in the early days of Ford Motor Company?