Management Quote S No.20, July 21,2014 This quote is courtesy Mahendra Mohan, GGNIMT BCA alumni now working as a Senior Manager with Sky in London UK. Dont find fault, find a remedy; anybody can complain. Henry Ford.* Though a very small quote, but Henry Fords life and work is far too important and interesting to be edited, and i have tried to include what may be important from the management and leadership perspective. Henry Ford (July 30, 1863 – April 7, 1947) was an American industrialist, the founder rof the Ford Motor Company, and sponsor of the development of the assembly line technique of mass production. Although Ford did not invent the automobile or the assembly line, he developed and manufactured the first automobile that many middle class Americans could afford. In doing so, Ford converted the automobile from an expensive curiosity into a practical conveyance that would profoundly impact the landscape of the twentieth century. His introduction of the Model T automobile revolutionized transportation and American industry. As owner of the Ford Motor Company, he became one of the richest and best-known people in the world. He is credited with Fordism: mass production of inexpensive goods coupled with high wages for workers. Ford had a global vision, with consumerism as the key to peace. His intense commitment to systematically lowering costs resulted in many technical and business innovations Henry Ford was born July 30, 1863, on a farm in Greenfield Township, Michigan. His father gave him a pocket watch in his early teens. At 15, Ford dismantled and reassembled the timepieces of friends and neighbors dozens of times, gaining the reputation of a watch repairman. In 1879, Ford left home to work as an apprentice machinist in Detroit, He was later hired by Westinghouse to service their steam engines. During this period Ford also studied bookkeeping at Goldsmith, Bryant & Stratton Business College in Detroit. In 1891, Ford became an engineer with the Edison Illuminating Company. After his promotion to Chief Engineer in 1893, he had enough time and money to devote attention to his personal experiments on gasoline engines. These experiments culminated in 1896 with the completion of a self-propelled vehicle which he named the Ford Quadricycle. He test-drove it on June 4. Also in 1896, Ford attended a meeting of Edison executives, where he was introduced to Thomas Edison. Edison approved of Fords automobile experimentation. Encouraged by Edison, Ford designed and built a second vehicle, completing it in 1898. Backed by the capital of Detroit lumber baron William H. Murphy, Ford resigned from the Edison Company and founded the Detroit Automobile Company on August 5, 1899.However, the automobiles produced were of a lower quality and higher price than Ford wanted. Ultimately, the company was not successful and was dissolved in January 1901. With the help of C. Harold Wills, Ford designed, built, and successfully raced a 26-horsepower automobile in October 1901. With this success, Murphy and other stockholders in the Detroit Automobile Company formed the Henry Ford Company on November 30, 1901, with Ford as chief engineer. Ford Motor Company Henry Ford with Thomas Edison and Harvey Firestone. Fort Myers, Florida, February 11, 1929. Model T The Model T was introduced on October 1, 1908. It had the steering wheel on the left, which every other company soon copied. The entire engine and transmission were enclosed; the four cylinders were cast in a solid block; the suspension used two semi-elliptic springs. The car was very simple to drive, and easy and cheap to repair. It was so cheap at $825 in 1908 ($21,650 today) (the price fell every year) that by the 1920s, a majority of American drivers had learned to drive on the Model T.Ford created a huge publicity machine in Detroit to ensure every newspaper carried stories and ads about the new product. Fords network of local dealers made the car ubiquitous in almost every city in North America. As independent dealers, the franchises grew rich and publicized not just the Ford but the concept of automobiling; local motor clubs sprang up to help new drivers and to encourage exploring the countryside. Ford was always eager to sell to farmers, who looked on the vehicle as a commercial device to help their business. Sales skyrocketed—several years posted 100% gains on the previous year. Always on the hunt for more efficiency and lower costs, in 1913 Ford introduced the moving assembly belts into his plants, which enabled an enormous increase in production. By 1918, half of all cars in America were Model Ts. All new cars were black; as Ford wrote in his autobiography, Any customer can have a car painted any color that he wants so long as it is black. Until the development of the assembly line, which mandated black because of its quicker drying time, Model Ts were available in other colors, including red. The design was fervently promoted and defended by Ford, and production continued as late as 1927; the final total production was 15,007,034. This record stood for the next 45 years. This record was achieved in 19 years from the introduction of the first Model T (1908). By the mid-1920s, sales of the Model T began to decline due to rising competition. Other auto makers offered payment plans through which consumers could buy their cars, which usually included more modern mechanical features and styling not available with the Model T. Despite urgings from Edsel, Henry refused to incorporate new features into the Model T or to form a customer credit plan. Model A and Fords later career By 1926, flagging sales of the Model T finally convinced Henry to make a new model. He pursued the project with a great deal of technical expertise in design of the engine, chassis, and other mechanical necessities, while leaving the body design to his son. Edsel also managed to prevail over his fathers initial objections in the inclusion of a sliding-shift transmission The result was the successful Ford Model A, introduced in December 1927 and produced through 1931, with a total output of more than 4 million. Subsequently, the Ford company adopted an annual model change system similar to that recently pioneered by its competitor General Motors (and still in use by automakers today). Not until the 1930s did Ford overcome his objection to finance companies, and the Ford-owned Universal Credit Corporation became a major car-financing operation.Ford was a pioneer of welfare capitalism, designed to improve the lot of his workers and especially to reduce the heavy turnover that had many departments hiring 300 men per year to fill 100 slots. Efficiency meant hiring and keeping the best workers. Ford astonished the world in 1914 by offering a $5 per day wage ($120 today), which more than doubled the rate of most of his workers. The move proved extremely profitable; instead of constant turnover of employees, the best mechanics in Detroit flocked to Ford, bringing their human capital and expertise, raising productivity, and lowering training costs.Ford announced his $5-per-day program on January 5, 1914, raising the minimum daily pay from $2.34 to $5 for qualifying workers. It also set a new, reduced workweek, although the details vary in different accounts. Detroit was already a high-wage city, but competitors were forced to raise wages or lose their best workers. Fords policy proved, however, that paying people more would enable Ford workers to afford the cars they were producing and be good for the economy. Ford explained the policy as profit-sharing rather than wages. The profit-sharing was offered to employees who had worked at the company for six months or more, and, importantly, conducted their lives in a manner of which Fords Social Department approved. They frowned on heavy drinking, gambling, and (what today are called) deadbeat dads. The Social Department used 50 investigators, plus support staff, to maintain employee standards; a large percentage of workers were able to qualify for this profit-sharing. He believed that productivity gains that obviated certain jobs would nevertheless stimulate the larger economy and thus grow new jobs elsewhere, whether within the same corporation or in others. Ford also believed that union leaders had a perverse incentive to foment perpetual socio-economic crisis as a way to maintain their own power. Meanwhile, he believed that smart managers had an incentive to do right by their workers, because doing so would maximize their own profits. But Ford believed that eventually, if good managers such as he could fend off the attacks of misguided people from both left and right (i.e., both socialists and bad-manager reactionaries), the good managers would create a socio-economic system wherein neither bad management nor bad unions could find enough support to continue existing policies.
Posted on: Mon, 21 Jul 2014 13:13:04 +0000
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