The Model A lessons in management

[sconnors]

Here is an article I wrote for LinkedIn. I thought people here might find it interesting.

Sometimes a company that has fallen into complacency from their success will suffer greatly by resting on their laurels. Such was the case of the Ford Motor Company in the late twenties just prior to introducing the Model A.



Henry Ford, was one of the best and astute businessmen to have ever lived. From 1909 – 1927 his company pumped out 15 million Model T Ford’s and figuratively and literally changed the landscape of America. Millions who had never traveled beyond their town were now able to travel from sea to shining sea. Henry was undoubtedly the main reason for the success of his company mainly due to the introduction of the assembly line which prior to Ford had been nonexistent in American plants.


By 1926 however sales were slipping dramatically and Ford who was being urged by many including his son Edsel to come out with a new automobile met with great resistance from the auto tycoon. Henry believed that the Tin Lizzie as the Model T was affectionately referred to had a lot of life left in her. But other car companies such as Chevrolet and Buick were making inroads into Henry’s once saturated market. Ford dealerships craved a new model to compete with the burgeoning car market of the time but had to suffice with showrooms full of Model T’s that weren’t selling.


Henry’s reluctance to act, to see the market change is a prime example of management getting comfortable and ceasing to be innovative. Playing catch up is always more expensive than being a leader and innovator as Henry had been in the early years. His cars were showing their age, and timeless quote that customers “could have any color they want as long as it’s black,” have gone down in automotive history.


Edsel was young, brash, inventive, a product of the jazz age, he saw the automobile industry as a design culture where products would appeal to people’s sense of style rather than Henry’s utilitarian view. Edsel and his team began the development and design of the Model A and it is to his credit that the Ford Motor Company was saved. But the history books of the time as well as old Henry’s ego couldn’t let his son’s ideas or success overshadow his, and so for many years all the credit of the Model A was given to Henry when in fact it was Edsel who played a major role in the design and development.


Henry’s decision to hold out so long cost his company dearly. He was paralyzed by the idea of change and in the end had to shut down and retool all his factories to accommodate the Model A production for six months laying off thousands of workers. It is a testament to Edsel that he was able to survive the pressures placed on him by his father and actually build a car as great as the Model A.


Companies that refuse to see the emerging markets around them are destined to either fail or suffer greatly as is the case here. In a sense the story of the Model A is a study in both bad and good management. The bad coming from Henry’s side while staying firmly rooted in the past with old fashioned beliefs while the good points to Edsel’s innovative thinking and keen eye towards design and marketing. Both men were truly geniuses in their own right.


In the end the Ford Motor Company went on to produce over 4 million Model A’s and many are still on the road today and I am proud to say that I am the proud owner of one. The design elements of the car were even fought over. Henry didn’t want things like shocks installed until he drove the car, he fought Edsel at every turn and despite the perception that Edsel acquiesced to “father” at every turn, history shows that he and his team fought hard for many features that to this day exist on the Model A.


Without a doubt Edsel Ford could have become an auto tycoon at any one of the hundred emerging car companies of the time, but he had a loyalty to his father and family business which sadly ended up tragically killing him. The management style of both men were important to the success of the Ford Motor Company.
Henry was an autocratic leader and manager, having a my way or the highway mentality and hiring others to do his dirty work.



Henry, was the first automaker to realize the cost of turnover and as a result raised his employees pay to five dollars a day in 1914 which was unheard of at the time. That five dollars however came with a heavy price. Men were scrutinized and investigated, beaten and made to work in slave like conditions with thugs supervising the line and firings commonplace for no reason and with no union representation.


Edsel on the other hand managed from consensus with his staff. He was of the belief that the more input from intelligent folks he surrounded himself with resulted in a better product. This is a testament to his ego or lack thereof, whereas his father believed in the too many cooks spoil the broth management style. Edsel knew that design was the secret to the younger market buying cars. He was in touch with his customers because he was of their age and one of them. Very much like a Steve Jobs or Bill Gates of their day, youth was the key to their success while the old stodgy guys at IBM laughed them out of their offices.


There is an innovation in youth when it comes to new and emerging products and the Model A even after eighty years shows that youthful exuberance of Edsel Ford. The bad and good management styles of the Ford Motor Company during those dark days of the late twenties produced a unique automobile that would span decades. One wonders how much better things would’ve have been if both Henry and Edsel had been working in concert on manufacture and design. What we do know is that they both left their fingerprint on the Model A and the auto industry for decades to come.

[Pete]

Henry resisted getting rid of the buggy springs in 48 also.

[Fullraceflathead]

Great Story!
Very Well Said!

[MrBruce]

Great story!

[mshmodela]

Having been in the Computer industry for over 25 years, Steve Jobs and Bill Gates were/are more like Henry Ford with all due respect. In fact, as Henry did with the Model T, Microsoft did with the Windows Operating system and it's too late for them --Office, Surface, Mobile --dead. Apple, on the other hand, did build quality products under Jobs but as a customer of two of their few thousand dollar computers, since Jobs' death, the quality is going down hill fast.

[Goldhardt]

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The body language in the picture says it all!

[marc hildebrant]

Nice story ! And very much true.

Marc

[Joe K]

Originally Posted by Goldhardt

The body language in the picture says it all!

True this.

Green visor on that fordor.

Bolts at end of the bumpers though.

Joe K

[hardtimes]

Thanks for sharing !

[todd3131]

The current term for what henry did to the automotive industry with the introduction is called disruption, this is where he brought out a low cost high quality automobile that lowered the barrier of entry forthe common man and thusly changed an industry. The one cardinal sin henry committed was to fall in love with his product, when a company is heavily invested Ina paticlar technology they more often than not tend to fail. In fords particular case it wasn't the post ww2 that was the big hurdle for ford but the early to mid twenties and the process to convince henry that they were not meeting market conditions.

I used this same story a few weeks ago in a speach to software developers.

No matter what industry your in if you get complacent and not innovating your done.

[Pete]

No matter what industry your in if you get complacent and not innovating your done.

So true with racing.

[Synchro909]

No matter what industry your in if you get complacent and not innovating you're done.

I think an even better example is the board at Kodak rejecting digital photography when it was offered to them. Head in sand comes to mind. Where is Kodak now??

[Charlville]

I'd disagree on the Microsoft Surface and Microsoft in general. They were a little slow in catching the Internet train. But they are still the defacto standard for corporate office automation, and they are ramping this dominance up with Office 365. Google have scratched this market a little, but corporates are now adopting the Surface as it fits into the Active Directory and the general security more seamlessly than say the iPad?

In reality Apple are probably more like Henry as the whole business hinges on the iPhone as the sales of other Apple products fall away, maybe the iWatch will buck the trend?

[pooch]

I don't think Edsel did enough or was not allowed to..

The model A was 5 years obsolete already when introduced.

[C26Pinelake]

A well put together piece ! Thank you. Wayne

[todd3131]

Originally Posted by Charlville

I'd disagree on the Microsoft Surface and Microsoft in general. They were a little slow in catching the Internet train. But they are still the defacto standard for corporate office automation, and they are ramping this dominance up with Office 365. Google have scratched this market a little, but corporates are now adopting the Surface as it fits into the Active Directory and the general security more seamlessly than say the iPad?

In reality Apple are probably more like Henry as the whole business hinges on the iPhone as the sales of other Apple products fall away, maybe the iWatch will buck the trend?

Have you looked at Google's chrome for work? It is starting to catch on. My company is a chrome partner we have a html5 software thatbia aligned for use with the chrome box.
I
Google is doing some amazing things but companies like Intel are developing competing products.

[todd3131]

Originally Posted by Synchro909

No matter what industry your in if you get complacent and not innovating you're done.

I think an even better example is the board at Kodak rejecting digital photography when it was offered to them. Head in sand comes to mind. Where is Kodak now??

That is also an example that was used along with the buggy whip manufacturing.

Being first and foremost a car guy I tend to equate most things to the auto industry, the only downfall is when I'm talking to professionals under thirty it is hard for them to grasp anything relevant from examples from over a hundred years ago.

[mshmodela]

Apple today is larger than Google and MSFT combined. Apple could buy either company with cash on hand.