- He created one of the most prestigious and innovative auto companies the world has ever known.
- Although he became very wealthy in the process of building cars, his mission/passion was to make car ownership affordable by providing access to low-cost and reliable cars within the reach of all Americans.
- He re-engineered the way automobiles were made by streamlining his manufacturing processes. He went from making 8,000 cars in 1907 to making 250,000 cars in 1914, a 312% increase in productivity.
- He was relentless in his pursuit of knowledge and experimenting with various ideas to make his cars more cost efficient and reliable.
- He paid his employees $5 a day compared to the standard $2.50 a day his competitors paid.
Who was Henry Ford?
Organizations and individuals are always looking for an edge or a competitive advantage. Henry Ford figured out how to get the edge or competitive advantage as a auto maker by focusing his efforts on something more than just selling cars. He focused on helping the little guy to be able to afford a car that was normally out of his range. What opportunities or challenges are you facing that if you documented and reduced the number of steps in the process would make the resolution of a major problem easier to address and would have a major impact on your business or life?
What can we learn from Henry Ford?
1. Be curious. Be a consistent reader and learner from great thinkers:
i) What was the last book you read and how did it help you to think differently than you did before you read it? Reading for personal and professional growth is about
reading to change. Reading for entertainment is fine, but if you are in a business,
you have to grow. You need to immerse yourself in books that will challenge your
thinking and compel you to behave differently.
2. Look outside the box for new ideas:
i) We all live in an “Idea Box” and without reaching outside of ourselves we will remain in our box. FedEx based its hub and delivery process on the nation's monetary clearing framework. The owner, Fred Smith, looked outside his industry to implement processes that revolutionized the shipping industry. Henry Ford looked outside his country and found a French auto making business using vanadium steel in some parts of their cars. Vanadium steel is much stronger and lighter than the steel that was being produced in America at that time. Mr. Ford found a steel company in Ohio that he partnered with to develop selected parts for the Model T using vanadium, which resulted in a stronger lighter vehicle.
3. Develop a mission and passion that is greater than creating wealth:
i) Mr. Ford’s mission was to put a low cost automobile in the hands of every American. With this purpose in mind, he set out to create an automobile that was reliable, durable, yet, very affordable. Beginning with the end in mind forced him to look for manufacturing methodologies and processes that would allow him to create the Model T for the lowest cost possible to accomplish his dream. The solution worked and the fortunes followed.
4. Delegate to your staff and give them authority to execute:
i) Ford learned early in his career that he needed to employee competent men, delegate to them and provide them with the authority to make decisions within the area of responsibility. How are you managing your team? When you delegate a responsibility to an employee, do you also give them the authority to execute?
5. Develop a standard of excellence:
i) As the Ford auto commercials state , “Quality is job 1”. This was Henry Ford’s axiom from the beginning of his career. One of Henry Ford’s famous quotes is, “Quality means do it right when no one is looking.” How do you measure excellence in your work? If you asked a co-worker to define your work ethic, would they say it’s excellent? What would your manager say about your standards? How about your clients?
6. Think process, process, process; then think how to develop your processes with the fewest steps possible:
i) How do you go from making 8,000 cars a year to making 250,000 cars a year? You have to implement world class processes. You have to have processes that work and processes that are streamlined to be the most efficient and effective as you can make them. Identifying and implementing world class processes makes the difference from being good and being great. World class organizations and individuals operate using world class processes. How much time are you spending reviewing, analyzing and redesigning your processes to eliminate your bottlenecks? Do you study world class organizations and imitate their processes?
7. Learn to leverage other people's skills:
i) Henry Ford was talented and smart, but like all of us, he had limited time, talent, and money. Henry leveraged other people's time and talents. Let’s consider the improvements Ford Motors made to their initial piston – rod assembly. A foreman saw a problem with the process for how this device was made and figured out how to increase production. Initially the process required 28 men to develop 175 units in a day. Henry Ford allowed the foreman to create and implement a process that required only 7 men and develop 2,600 units a day. Talk about improving a process! When you let people use their talents, you will be amazed at the increase in production. Are you leveraging your staff’s creative abilities to improve efficiency and productivity in your organization?
8. When the wealth comes, share it:
i) Henry Ford was the first employer to offer his employees a $5 dollar a day salary which was twice the amount being offered by others. Ford's mission and passion had created a surplus of cash that he knew would only last so long if others were not bought into his dream. Ford also understood that it was good business to create employee loyalty through sharing the profits of his mission. Because of his decision to double the salary of his employees, they remained loyal and employee retention grew. With employee retention, organizations are about to develop a culture of excellence, institutionalize internal knowledge, and crystallize best practices. What is your employee retention plan?
- Source: “My Life and Work,” by Henry Ford
- Source: “Henry Ford’s Lean Vision: Enduring Principles From the First Ford Motor Plant,” by William Levinson.
Principles of Execution Key Concepts:
- Henry Ford
- Leadership Style
- Continuous Improvement
Share your ideas or thoughts!