Giant Killer to Giant

September 30, 2024

Dear Leaders,

October in the USA is more than just fall, Halloween, and pumpkin spice in everything, as for many years, it meant the arrival of new cars in dealer showrooms.? The automobile is as ingrained in the American culture as anything, and while the excitement of yesteryear has faded, we still see in them the enterprising spirit, daring, and leadership that brought cars from curiosity to ubiquity. ?Yet in turning back the pages of history, we learn how some industry titans were themselves the little guys who had the audacity to challenge the establishment, and ultimately became that establishment.?

Like many in the American heartland, Henry Ford was a farmer, but his interest was in things mechanical, so he left for Detroit and went to work in engine building.? Experimenting for several years, he made his first successful automobile in 1896, and backed by venture capital, established his first company.? Ford was unsuccessful and lost it, but he opened a second more successful enterprise in 1903.? Known for visionary engineering, yet a mercurial temperament, his financial backers initially placed others in charge.?

As the Ford Motor Company grew, he drew the attention of the Association of Licensed Automobile Manufacturers who claimed to have a patent on the automobile and demanded that nascent manufacturers apply to them for license and pay royalties.? They denied Ford’s application, and rather than back down, he sued, claiming their patent was not valid.? After six years of court battles, Ford prevailed, and the timing could not have been better, for he was three years into one of the greatest industrial feats in history:? the Model T.

Ford realized that the future of automobile manufacturing was in mass marketing, and using a new engine and transmission he designed, began building a simple and durable vehicle.? Integrating assembly line technology, he was able to bring down his costs, and with it dropped the sale price of his car.? The buying public responded, and from 1908 to the end of production in 1927, Ford made more than fifteen million Model T cars in a wide range of styles, with the price dropping from $850 to $360 over time.

Putting America on wheels became both a blessing and a curse, for while Ford was able to expand his company into what would become a global empire, his hubris in staying with one model for so long was nearly his undoing.? Ford’s competitors focused on styling and features, and their mechanical advancements attracted buyers away from Ford.? Finally realizing he had to move on, he introduced a new car in 1927 and went on to seize the market again five years later with the V8 engine.

Like any strong leader, Henry Ford was a complex mix of vision and innovation with the willingness to take risks, while equally possessing character flaws that sometimes had him blocking his own progress.? He appointed his son Edsel as company president in 1918, yet often publicly quarreled with him, and even openly countermanded his decisions.? He was an innovator in using the assembly line for efficiency and introducing higher wages and the forty-hour work week, but he steadfastly opposed unionization of his workforce and established a program for foreign-born workers to become American citizens through assimilation and rejection of their heritage.? He wrote and oversaw publication of many anti-Semitic works, even receiving an award from Nazi Germany in 1938.

As Ford’s business empire expanded from national to global, he believed that commerce would overcome war and was openly pacifist in World Wars I and II, opposing American involvement, and doing business with adversary nations right up to the declaration of war.? He nonetheless supported the American war effort in both wars, notably producing thousands of aircraft and vehicles.? However, his son’s frequent illness allowed the elder Ford to regain nearly full control of his company, but bad management decisions and deference to long-time supporters with selfish and nefarious intentions left it in such disarray, his family and the US Government was forced to intervene and place his grandson Henry Ford II in charge.

Henry Ford died in 1947, leaving behind a global corporation that manufactures cars and trucks worldwide, and the Ford Motor Company is one of “Detroit Big Three” and fifth largest global auto company.? Like many great leaders, he is remembered more for his achievements than his foibles, and like David who took on Goliath, he went on to become an industrial king whose achievements were seldom eclipsed.? ??

As we saw in LinkedIn ’s recent Top 50 startup list, new entrepreneurs come forward every day, with many backed by other industry titans, while others like Ford, are visionaries willing to change the landscape.? In advancing ideas, taking risks, and challenging the status quo, visionary leaders who can also overcome their own limitations might not be as synonymous with a product as is the name Ford, but they can nonetheless establish themselves in the pantheon of success stories.?

Sincerely,

Tim