Henry Ford was an American industrialist and business magnate, notable as the founder of the Ford Motor Company, and chief developer of the assembly line technique of mass production. By creating the first automobile that middle-class Americans could afford, he converted the automobile from an expensive curiosity into an accessible conveyance that profoundly impacted the landscape of the 20th century. He became one of the richest people in the world. He is credited with what is known as “Fordism” which was 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, including a franchise system that is still used by businesses today. So, what can we learn from his leadership?
Happy Employees are productive employees
Henry Ford was a revolutionary who made production so much more efficient, but do you know what this led to? His employees were burned out and unfulfilled and so attrition became a very big problem for his business. His workers were no longer getting to build a whole car, instead each of them was just doing the same task over and over again on the assembly line. Within a year of this revolutionary new way of working the cost of constantly finding and retraining workers put the entire company at risk. The model simply was not sustainable.
To combat this, Ford realised that without people his business could not be sustained. You may have the best business strategy in the world, but if there is no one to execute it, then it doesn’t matter. So, he put employees at the heart of his strategy and introduced a concept that he called the $5 day. This was critical as at the time the average assembly line worker was paid $2.50 a day. He communicated to his workers that he knew they were working incredibly hard and the company was making a lot of money, and so very simply they should be looked after better. The second thing he did, was to also decrease everyone’s workload. Teams would typically work in one of two shifts. To reduce the hours worked, he changed this to 3 shifts a day. He actually paid his people more and had them work less!
This is a lesson that many business leaders today could learn from. Most businesses today seem to constantly be cutting costs and putting employees under strain. Teams are continually expected to do more, with less. Hire someone cheaper, who will do more is the hiring strategy of far too many businesses. Ford proved the reverse was actually the secret success formula. Having well paid, well rested happy employees led to his business outperforming all others.
Don’t show off
Something often forgotten about Henry Ford is that he was always very modest when interacting with others. Henry Ford was of course one of the richest and most successful business leaders of his time. But he would always dress very informally. There’s a well-known story of the interactions between him and his secretary who would ask him to dress more formally so that his appearance matched his achievements. His response was simple, everyone knew he was Henry Ford, so why did he need to bother trying to show them he was successful? Then one day, he was travelling abroad, and he found himself in a place where no one knew who he was. So, she again suggested he make more of an effort so that people know he is an important person. His response was again simple, why would he bother trying for people who didn’t know who he was in the first place. In the social media age, it often seems that people are more concerned with looking successful as opposed to actually being successful. This is a timely reminder that ultimately, validation and happiness come from within oneself and not from others.
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