Assembly lines and mass production? There’s more to them than meets the eye! Gain IC insights from the experiences of one of the greatest innovators of all time!
According to Wikipedia, “Ford converted the automobile from an expensive curiosity into a practical conveyance that would profoundly impact the landscape of the 20th century.” Keep reading to know some of the entrepreneurial lessons you can learn from Ford as he managed the Ford Motor Company.
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Assembly lines and mass production? There’s more to them than meets the eye! Gain IC insights from the experiences of one of the greatest innovators of all time! Henry Ford: The Founder of The Ford Motor Company July 30, 1863. That day, a baby boy was born on a farm in Michigan. Who would’ve thought that that baby would grow up to be a skilled, innovative, wise, and well-mannered man? To be specific, he masterfully repaired watches, invented “Fordism”―producing a lot of goods and paying workers well―and built an empire from assembly lines and mass production. Any guesses about who we’re talking about? It’s none other than… Henry Ford! Ford is an American industrialist and business magnate who was known for founding one of the famous automobile companies we know today: The Ford Motor Company. His creation of the Ford Model T revolutionized the transportation industry. As a company owner, he became one of the richest and best-known people across the globe. Ford’s intense commitment to systematically lowering costs resulted in many technical and business innovations, as well as a franchise system that put dealerships throughout North America on 6 other continents. Early Engineering Career Despite being raised on a farm, Ford despised farm work. His favorite task was maintaining an early steam engine. Early on in his career, he trained as a machinist. He then eventually became the Chief Engineer of the Edison Illuminating Company, a power company founded by American inventor, Thomas Edison. By the time Ford had enough time and money to experiment with gasoline motors, he perfected a self-propelled vehicle called the Ford Quadricycle. The car had a simple frame with a gas-powered engine and 4 bicycle wheels mounted on it.
Due to that creation, Edison saw Ford’s potential and encouraged him to quit his job and pursue his dream as a car-maker. True enough, in 1899, Ford and his partners founded the Detroit Automobile Company. However, his business partners had other motives. After successfully founding Detroit, they pushed Ford to cut corners. That led to higher prices and lower quality of automobiles manufactured by the company. Would you expect such a company to last long in the industry? NO. By 1901, Detroit went out of business. The Coming of A New Company Despite the failure of his first business venture, Ford remained undeterred. He continued to pursue his dream of building his own cars and in October 1901, he displayed and raced a 26-horsepower automobile from his own workshop. Ford’s former investors were greatly impressed by that! It even compelled them to provide funds to set up the Ford Motor Company, with Ford as the Chief Engineer. … but then history repeated itself. Once again, Ford’s backers became impatient for profits, which led them to bring in an appraiser to set the value on the company because they were intending to liquidate it. That disappointed Ford and made him leave the company that bore his name. After his departure, his investors sold the company, which was then renamed as Cadillac. In October 1902, Ford produced another model―an 80-horsepower car that was raced as the “999.” The success of this new creation led to another opportunity to establish a third automobile company, which, unfortunately, quickly folded. Then in the winter of 1902 to 1903, Ford created a new car that was able to traverse one mile over the ice of a frozen St. Clair Lake in 39.3 seconds, setting a new land speed record of 93.4 miles per hour! At this point, we can see that Ford really has a knack for creating awesome cars! With this most recent success, he was able to raise USD 28,000 in capital for his fourth―and final―Ford Motor Company, which stands up to this day. Aside from being a genius in automotive engineering, Ford also possessed great insights into marketing. Even without any background in the field, he knew that the way to sell more of a big-ticket product such as a car was to make it affordable to the masses. How did he apply this concept in his business? When the Ford Model-T came out in 1908, he set it at a sticker price of just USD 825. If you’re expecting that the price of the car went up a bit every year, guess again. Instead of going up, the car’s price went down every year afterward! The result of that? In just 12 years, over half of the adult population of the US learned to drive the Model-T, even though none of them had ever driven an automobile before. Now that’s one great way to build one’s brand! How else did Ford build his brand? He realized people need to earn money to be able to afford big-ticket items. So, he paid his factory workers USD 5 a day (roughly equivalent to USD 120 a day in 2015). That was twice what other businesses pay their workers at that time. Ford was also one of the first industrialists to welcome African-Americans, people with disabilities, women, and Jews to the work floor. Additionally, Ford built his brand by making sure his cars were always on the news. Aside from lending his manufactured vehicles to car races, he and his company maintained a MASSIVE publicity machine so that every newspaper mentioned his brand every day. One of the insights you can learn from Ford is that it’s not necessary to be all things to every customer. He was happy to offer his cars in just one color to enable greater sales at lower prices. In the same way, you have to realize that there’s nothing wrong with focusing on narrow market segments that appreciate your products. Focus on one step at a time and later on, you’ll realize that your brand or business is slowly making its way to your target market’s hearts. Hope you’ve found this week’s insights interesting and helpful. Follow us on LinkedIn. Stay tuned for next Monday’s MicroBusiness Marvels! |
