Whoa! What a strong and polarized statement! Was Henry too naïve to say like that? Too smart? Or too ignorant? How come he became the leader of Ford with this belief? What made him think this way?
These questions might have come to your mind after reading the statement, asking for clues and answers. Let me make it interesting for you. So here I go with a short yet powerful story followed by my analysis and discussion.
The hero of the story is Henry Ford- the fueling engine and steering body behind Ford Motors.
Henry Ford has made his mark in the market in the 20th century by his visionary and strategic approach way before others, which led the Ford to reach heights from its start. His smart steps towards his ‘Ford Motor Company’ made it thoroughly famous and successful and in a short time, he started to be known as the superhero in the market with his superpower phenomenon ‘Fordism’.
However, the sad part started by the end of the 20th century, when the CEO quoting this same statement of their leader Henry Ford announced that Ford was towards the verge of bankruptcy.
The numerous reasons count for:
-Overall financial crisis
-Weaker branding and foothold i.e. not considering customization for customers (as General Motors and BMW did in the past),
-Failing to capitalize on the abundant untapped customers of China, India, and Pakistan who love Ford, etc. etc.
But, most importantly, the reason was an ‘Orthodox Mindset’.
At his boom, Henry Ford is said to have articulated this statement which is often under debate for its applicability in the past and present era. According to Vlaskovits (2011), some even say that this statement has not been said by Henry Ford and is mythical (that is a different argument), however, it is quoted by many leaders in their aggressive speeches signifying Henry Ford’s ideology. Here ‘people’ is implied by ‘customers’. So I will proceed with my discussion keeping this in mind.
Henry’s statement was workable until he gave strong competition to rivals on price and the needs of customers were static. It was the time when he was not compelled to do innovation based on the customer’s choice that his idea of ‘price and cost reduction’ worked. His remarkable Model T Design remained effective from 1908 to 1927.
But, things started to take a turn when General Motors thrived in the automobile sector with its astonishing innovations and regard for customers in 1920. Now the rigid ideology of Henry Ford ‘any color, till it is black’ was terrifically taken over by Alfred Pritchard Sloan’s ideology ‘A car for every purse and purpose’. This great CEO of General Motors had a pure customer research-driven approach that catered niche market segments with customer-centric revolutions like used trade-ins of cars, selling on installments, closed models of cars along with changing models annually.
It was now proved that the highlighted statement of Henry Ford being discussed is not comprised of mere ‘words’ but a stubborn mindset. Because of this, his inflexibly introduced models were not ideal anymore. The losses showed that the customers wanted more than faster horses, they wanted great cars with prodigious features and financing choices.
If I particularly analyze the statement, it shows the extraordinary boldness and courage Henry Ford had on himself while it is apparent that he has given nil significance to a widely acknowledged concept of ‘customer feedback’. Today, the phenomenon like ‘360-degree feedback’ has been rigorously practiced by more than 80 percent of successful companies that are highlighted under Fortune 500 (like Facebook, Amazon and Toyota Motor) and the customers are valued to form a major part of their feedback (Graber, 2018).
I admit that leaders like Henry Ford are capable of thinking out of the box and have strong far-sighted impulses. Yet, Henry was mistaken to perceive customers as non-creative and unimaginative species. I do believe, being a distinct gifted inventor, he was not naïve to ignore his ‘people’. As in the beginning, he was insightful to tap the right masses of customers who wanted affordable cars. His vision accurately matched with the needs of customers at the start so he won their hearts. However, later on, it seems that he gained overconfidence and self-assurance to disregard differentiation and asking for further needs of the customers.
Ironically, Henry Ford was not the only leader with this mindset, one of the most successful leaders like Steve Jobs also had a similar orientation against customer involvement. He was against focus groups believing that participants carry different motivations where introverts do not participate much and small sample is generalized.
However, the point missed by Henry unlike Steve was the science and art of understanding customer’s values. If they said ‘Faster horses’, it means ‘fastest transportation’, they might not have directly asked for the automatic transmission or enduring engine. This is the beauty of the leader to judge the pain points of customers rightly and this can be done by walking in their shoes. So, it was never about building cars, it was about building a solution to customers’ problems by ‘asking’ them.
Correct need assessment is the first stage of any critical problem solving, innovation, and development. If the need is wrongly identified at first or the people being affected by it are overlooked, then it is a waste of time, brainpower, efforts, and money.
Comparatively, seeing optimistically and considering the intellect of Henry, I cannot disregard that his statement might have hidden wisdom and the context in which he said might make it worthwhile. Nevertheless, this statement has often been misquoted to hide product failures, to defend wrongdoing and to protect business egos.
Innovation is a continuous effort and not a one-time struggle, though it gave a monopoly to Ford for a reasonable period of time but not everlastingly. The customers want ongoing improvements, they are more demanding now due to an abundance of options available at competitive prices. Interestingly, many brand conscious customers focus least on competitive prices and ask for ‘quality’ and ‘features’. Because of this, the brands that focused on customer’s choices and opinions are adored, just like Aston Martin with customized Aston Martin’s Q, Mercedes (AMG) and BMW (M).
The secret is making the customers feel valued. Nowadays, wise leaders and companies like Unilever and Tallwave allow customers and stakeholders to give their opinions in their official brainstorming sessions (Pruitt, 2016). Formal/informal questionnaires, interviews, and focus group sessions are conducted to have first-hand knowledge about their problems, needs, and expectations. Unilever involves and collaborates with customers in more than 60% of their external research-based projects which tells a lot about its success.
Similarly, according to Innovation Games, (2018), a process ‘Wellbeing North Star’ is generated by Kimberly Wiefling which allows game-storming. In this process, the major theme/problem is highlighted in the center and all discussions regarding theme are put nearby the star. Everyone including customers is given the opportunity to be vocal in the process.
This shows that the key to developing a breakthrough innovation is customer discernment. In our story, however, the very first step of the innovator’s method including ‘questioning, observing, networking and experimenting’ was killed by ‘assuming’ (without questioning) what the customers would have said and the remaining process disastrously followed.
Although this statement is often used in the business context but seeing it from a lay man’s perspective in general life, it means no matter what you do or achieve, people always want more from you. The weight of the exceeding expectations of ‘people’ including family, peers, friends, bosses, etc. only crushes you down. Ultimately leading to affected mental health. And worst-case scenario, when this burden becomes too difficult to carry, ends up in taking your life.
So, the secret to happiness is having the self-confidence to a fair extent, knowing your goals and being somehow carefree towards the opinions of others. However, sometimes asking people for help or advice helps us tremendously when we are falling apart. After all, the world is running on the phenomenon of ‘give and take’.
Concluding the gist of my story, a leader wins his battles by taking along ‘everyone’ by means of ‘synergy’ from top to bottom workforce of the company along with stakeholders i.e. customers, suppliers, distributors, dealers, etc. He says ‘we have done it’ instead of ‘I have done it’. He believes in collaboration, empowerment, and relationship building. And, just like his vision, his heart is big. He is mindful to earn a competitive advantage for the company by capitalizing on the brainpower of employees and customers together and never underestimates anyone.
Henry Ford would have done wonders if ‘people’ he quoted were rightly understood and their problems were considered through observational, intuitional, empirical and anecdotal modes. This gives a lesson to us and the future leaders that it is important to listen to customers by continuously testing our own vision against facts.