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Henry Ford Leadership Paper

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A Leadership Analysis of Henry Ford
Brief Historical Sketch
Who knew that a young farm boy that loved tinkering with pocket watches and simple farm equipment would lead a manufacturing revolution. Henry Ford did. Even from an early age Ford understood that he wanted to change the world. His dream was to design and build a “horseless carriage,” a dream that he accomplish in 1908 (Ford, 2008). However, not even Ford could have predicted the magnitude at which both his invention and his business strategies would have on the world.
Henry Ford was born in the small town of Dearborn, Michigan on July 30, 1863. The town was better known as the Greenfield Township. Ford’s parents were both European immigrants. His father, William Ford, emigrated from Ireland and his mother, Mary Ford, though born in the United States had strong ties to Belgium. (Henry Ford, 2012) The Fords were a successful farming family and never had to worry about money. While Henry Ford knew at an early age that taking over the family farm would have been a safe and advantageous decision, his ambition kept him focused on other possibilities. (Ford, H 2008)
Ford’s teenage years were instrumental in helping him develop is dream and his career. There were two important memories that Ford could recall that sparked his interest in motor vehicles and engineering. Around the age of twelve, the Ford’s were traveling to Detroit with family when they passed a “road engine” delivering farm machinery (Ford, H 2008). This was the first non-horse pulled vehicle Henry had ever seen. From that moment Henry knew he wanted to develop a vehicle that was not pulled by horse, and that would increase the means of transportation between country farms and major cities. (Ford, H 2008) The other significant event happened in the same year, Ford’s father gave him his pocket watch. What seemed like a simple gesture but, by the age of fifteen, it had developed Henry’s passion for mechanics. He loved to take the watch apart and put it back together. He became so good at fixing watches that most of the town’s people were using him for their repairs. (Ford, H 2008) For a time many thought that watch manufacturing would be Henry’s chosen career. However, the dream of a “horseless carriage” never faded. Even though his father did not support his dream, he began building his first prototype in the family barn. (Ford, H 2008)
At seventeen he began working as an apprentice machinist and quickly climbed the ranks despite his age. (Ford, H 2008) In his twenties Ford was inspired by a meeting with Thomas Edison. Edison told him even though many believed that the future was going to surround electricity, he stressed to Ford to continue with his engine and the idea of bringing cheap and reliably transport to the masses (Ford, H 2008). Ford did just that, after being offered a major promotion, he quit his job and went into the automobile business (Ford, H 2008)
Ford was forced to join a group of investors to form the Detroit Automobile Company. Ford had no personal funds and had to rely on his investors. After the first year, Ford resigned, they had only produced 20 cars and Ford quickly realized his investors were only interested in quick profits and not engineering a reliable vehicle for the world. (Ford, H 2008) In 1903 at the age of forty, Ford started the Ford Motor Company; he was a 25 percent owner, again having to rely on others for financial help. In the company’s first year the model T was introduced and quickly gained a reputation for reliability. In the first year alone they produced over 1700 cars (Ford, H 2008). In their second year Ford again fell to the pressure of inventors and was forced created three new models. The prices of the vehicles also increased and because of a higher price, sales declined. After this had happened to Ford for the second time he knew what he had to do. He had to gain total control of the company. He began buying out the other inventors with profits each year, eventually gaining 100% of the ownership. From 1908 to 1909 the company sold 10,000 Model T’s (Ford, H 2008). With production and sales taking off, many tried to get Ford to change his thinking on body style, color, and model type but, instead of expanding the product line Ford chose the opposite direction. In 1909 Ford made his famous speech stating that from now on they would only sell one model, the model T and that “any customer can have a car panted any colour that he wants so long as it is black.” (Ford, H 2008) Ford and his company went on to make over 15 million model T’s by the end of the decade. They were producing at an alarming four thousand cars a day. (Ford, H 2008) By 1918 Henry Ford could claim that more than half of the cars in the United States were his model T. (Henry Ford Biography)
Later in Ford’s life he developed an interest in politics and with the support of President Woodrow Wilson he ran as a democratic senate candidate in Michigan in 1918. Wilson liked Ford’s position on the U.S. economy, labor laws, and his views on peace and the League of Nations. (Henry Ford, 2012) Ford went on to lose the race to Truman Newberry. That same year Ford turned the presidency of the Ford Motor Company over to his son Edsel Ford (Ford, H 2008). Even though Henry Ford was no longer employed by the company, he still held a majority of the ownership and often retained authority on final decisions and even reversed some of his son’s decisions. Edsel held the presidency until his death in May of 1943, at that time Henry Ford again took control of the company. Becoming gravely ill Henry Ford ceded the presidency to his grandson Henry Ford II in 1945. (Henry Ford, 2012) Ford was only retired for two years before his death in 1947 due to a cerebral hemorrhage at age 83. (Henry Ford, 2012)
Summary of Major Contributions & Effectiveness
Henry Ford’s contributions to the world are among some of the greatest in all mankind. He engineered the first reliable and affordable car for the masses, which brought about a number of changes not only in the business world but, also impacted the entire way of life. Every idea that Ford dreamt of was executed to its fullest. His passion, intelligence and follow through are to thank for these accomplishments. It is safe to say that both the United States and the World is a better place because of Henry Ford.
The Automobile The automobile was not invented by Ford, as some people think, however he did have an overwhelming influence on the way they were designed and built (Henry Ford Biography). Ford’s vision for creating a “horseless carriage” was only the beginning to bringing the world the first reliable and affordable automobile. Ford would continue to work with his engineers through a number of different models until finally they produced the Model T. (Ford, H 2008) The Model T design was first introduced in 1908. During the next decade the Ford Motor Company sold millions. Ford’s pricing and sales philosophy were simple, “The best possible goods at the lowest possible price.” (Ford, H 2008). The reason that price was so important is because Ford was determined to “democratize” the automobile. (Ford, H 2008) And he did just that by working hard to maintain costs and continued to lower prices. In 1909 the Model T sold for $950 and fell to as low as $355 by 1920. (Ford, H 2008) This would amount to about $4100 day. “When I'm through, everybody will be able to afford one, and about everybody will have one." (Ford, H 2008) Ford demonstrated that a strategic, by systematic lowering of prices could boost profits, as net income rose from $3 million in 1909 to $25 million in 1914. (Sample Material)
Manufacturing
Ford’s continued pursuit to increase the efficiency of the car manufacturing process helped keep costs as low as possible. He also sought out a way to improve the speed of production. Ford and his company found a solution to all their problems and introduced the assembly line to their manufacturing facilities. The assembly line moved semi-complete cars from work station to work station where parts were added in a sequential pattern (Assembly Line). The assembly line was a big part of Ford’s success. In 1914, the company opened Highland Park factory. It expanded production capacities from 6,000 to 35,000 (Ford, H 2008). At its peak, 50,000 employees where producing over 4,000 cars a day. In 1921 alone, five million cars were produced. The cost of making cars decreased, so Ford also was able to decrease the price of the model T (Ford, H 2008). The process was genuine and cost effective. It helped drive the expansion of manufacturing production in United States.
Transportation and Travel
By the 1920’s over half of the cars in the U.S. were Ford’s Model T (Henry Ford Biography). Now that the automobile was easily available and affordable to the common American there was a great need to improve road infrastructure. This would include improving road conditions and creation of new interstates, highways, and even county roads. Mary Bellis stated in an article about Ford’s life that, “Ford’s affordable Model T irrevocably altered American society” (Bellis). This was evident by the change in urbanization patterns across the U.S. It also launched growth of suburbia and was a key part in promoting the need for a national highway system. (Bellis) Americans were now free to go anywhere at any time.
Workforce and Employment
Ford and Ford Motor Company were growing quickly. They needed to make sure they had employees to work on the lines. To increase the interest in working for the Ford Motor Company, Henry introduced the “Five-Dollar Workday.” A five dollar work day was twice the wage that others were paying (Ford, H 2008). This was designed to improve the size of the work force and help cut down on turnover. It worked and not only stopped turnover but, lead to mechanics from all over the U.S. moving to Detroit to work for Ford. The move was very profitable for the company. Higher wages lead to a large human capital pool, raised productivity and lowered training costs. (Henry Ford, 2012)
Henry Ford did more for employment than just raise wages. He moved away from the standard nine hour work day, making his employees only work 8 hours. It made the days shorter for the employees but, was more beneficial to the Ford Company. Moving to an eight hour shift allowed the plant to operated three, eight hour shifts around the clock. Ford also had an unusual hiring method for his time. Ford hired blind, deaf, dumb and even men with missing limbs. To the surprise of many, Ford made sure they were paid the same wage as any other (Ford, H 2008). This idea of equal employment opportunity was way ahead of his time. Ford felt like it was a company responsible to reflect the town in which it was a part of, “I think that if an industrial institution is to fill its whole role, it ought to be possible for a cross-section of its employees to show about the same proportions as a cross-section of a society in general.” (Ford, H 2008)
Summary of their Strengths and Weaknesses as a Leader
Henry Ford was many things, he was a farmer, inventor, a philanthropist, but he is best known as a successful business man. Growing up on the farm there was always work to be done. His strong work ethics and curiosity were established here. He also liked to tinker with farm equipment, simple machines and watches which seemed to promote his intelligence and natural engineer abilities. Even in his first job as a machinist he used these skills to move through the ranks of the company. These traits are also important when starting your own company but, work ethic and intelligence alone do not make you a good leader. The trait that made Ford a good leader was his ability to dream about changing the world. He was a visionary and paid extreme attention to detail, not only towards his inventions but, also for his company. He was never settling for less than prefect, always looking to improve his car model and manufacturing process. His pursuits often lead to failure. Ford had to leave two other companies before finally buying a controlling share of Ford Motor Company. He did not fear failure but, did fear losing control. Even after passing on the presidency to this son he still constantly over turned decisions and was said to always be spying on his managers (Ford, H 2008)
Although his attention of detail was said to be strength, it is that attention to detail paired with lack of trust and stubbornness makes it a weakness. Caring so much about doing things his way Ford was left no choice but, to leave other companies that were controlled by high paying investors. He knew right away after starting the Ford Motor Company that he needed to buyout the other investor to get complete control. Ford was closed minded, he never wanted to make different models, raise prices, or consider new features like paint color or body style. In today’s buyers’ market Ford’s approach may not have been as successful. Ford held a number of patents that keep competitors at bay which was a big portion of his success. If Ford had not been first to the market with a number of ideas his stubbornness and inability to change could have doomed his company.

Leadership Style: Concepts, Laws, & Theories

The Law of the Lid Ford would probably agree with many of John Maxwell’s Irrefutable laws of leadership. The Law of the Lid can easily be applied to Ford’s leader style although Ford lived before Maxwell’s time. The law states that a leader’s ability has a lid or a limit to how effective one can be and the potential impact it can have on your organization. There are two factors that are used to determine the magnitude of one’s leadership: success dedication and leadership ability (Maxwell, 2007). Ford even from a young age was dedicated to success. He lived his whole life though one vision of bringing an affordable car to the masses and would not stop until it was done. Ford’s dedication to success would most likely be plotted somewhere between a nine and a ten. However it is the other factor that is a key is determining one’s ability to lead. Ford was also looking to improve this company processes and at the same time, he continually adjusted his leadership processes as well. Along Ford’s journey and takeover of Ford Motor Company he had to make changes in order to stay ahead of their fast paced growth. His company was only successful at first because of his dedication to success but, as the company grew so did Ford’s leadership abilities. When Ford first took over, his leadership ability was probably close to a three. Each year passed and success for the company continued to grow, so did Ford’s leadership. With a high level of dedication and high level of leadership ability it is no surprise Ford was a great leader.

Power and Influence Henry Ford influenced the world in many different ways, the automobile, pricing philosophy and the assembly line to name a few. Many of these influences all were derived by expert power. Expert power comes from a task-relevant knowledge and skills. In Ford’s case his unique knowledge about the way to build cars, how to sell them and the fastest and cheapest way to make them, provided him the influence he needed over others (Yukl, 191). Ford’s passion for engineering and continually looking to improve processes helped to maintain his power through his time with the Ford Motor Company. The expert power he held over others in the company keep them at bay and left Ford to decide what was best for the company because he had the technical skill and experience to influence others away from change (Yukl, 191).

Machiavellianism
It is easy to see that Henry Ford matches many of the traits associated with a Machiavellian’s style of leaderships. Some of these traits include control and manipulation, ends justifying the means, narcissism, and cunning. He controlled his company from the top down; he made the important decision, micro-managed and was not open to change. He manipulated his employees by increases their wages in return for very hard working days and mindless repetitive work. Increased wages also reduced turnover and helped his company save money. Ford also tends to show many narcissist behaviors. His continued need for control of his company and his automobile often seemed like it was promoting his own self-interest. It could even be said that Henry was the King of the automobile and head of the American manufacturing revolution but in Ford’s defense he did seem to care about his employees. He said that paying high wages gives his employees stability, helped take care of their families, and gave them means to be consumers in the economy.
The Law of Addition Although Ford was continuous in total control of these company one could make an argument that Ford was a leader that added by serving others. Ford employed the handicap and paid twice the wages as other manufactures. John Maxwell’s law of addition states that by investing in your employees you are investing in the success of your company (Maxwell, 2007). Ford also knew that his employees needed to feel like they are valued. Ford did not care if you were an expert in your field, he actually preferred the opposite. He wanted his employees to stay opened minded and question the process. He stated that experts were a problem because they only knew what could not be done (Ford, H 2008). Maxwell’s law says that people become good leaders through serving others (Maxwell, 2007). Ford did this and in return he developed more loyalty and trust from his employees.

Managerial grid Robert Blake and Jane Mouton’s idea of a managerial grid is another great tool to help determine what kind of a leader Ford was. The theory uses plots on a graph to determine if a leader has more concern for production or more concern for people. The ideal being 9, 9, and the low 1, 1. Trying to place Henry Ford at only one point on this graph is difficult. Ford was a man who really cared about production. He needed to mass produce cars to keep up with the demand of the American people. His car making process was always changing and improving in an attempt to drive costs down. However, we cannot plot Ford at a 9, 1 because he also had very high concern for his employees. Ford paid high wages to help out the employees and their families. He worked to improve working condition and tried to empower them to dream about how they could improve processes at work. Ford had his flaws, lack of trust and stubbornness among the biggest, which did limit help from ever reaching a 9, 9. Ford’s plot points seemed to move from time to time. He showed concern for his employees when needed but, was always focused on the process of production. It would be fair to plot his concern for production between a seven and a nine and plot his concern for people between a five and a seven. The big takeaway here is that Ford’s style is in the upper right hand corner of the graph and Blake and Mouton would agree that is were successful leaders should be placed. (Blake, Mouton 1994)

What can we learn about Leadership from Henry Ford? Ford had a passion for his vision and never stopped his pursuit of bringing an affordable car to the masses. Ford would speak a lot about having a dream or vision and doing what means necessary to make sure it is carried out. He also spoke a lot about being self-reliance. It is up to the individual to make sure their visions become a reality. In Ford’s autobiography he talks about not worrying about money. He said you need to invest your money in yourself. It will increase your own potential for productivity and not doing so you are taking away from our own ultimate capital. Investing in you will always net the best return (Ford, 2008).
Ford’s employees did not just work for his company because of the higher wages. They wanted to be allowed to think for themselves, having the ability to think things through is why they choose to work there. This principle is at the root of all inventors and relates to what Ford says about investing in yourself, your ideas, and your passions. However, I think we also have a lesson to learn from Ford and his stubbornness. Ford never let go of controlling his company, he never trusted anyone to make a decision and he lacked trust even in his own son. This amount of control over his company and a very closed-minded opinion on what was the next step forward is something that Ford lost focus on in his later years. If the market place would have had more competition it would have been interesting to see if Henry Ford could have keep up his single model vision or if he could have changed his own vision to continue to be successful. The greatness thing we can learn from Ford’s life is be passionate, invest in your dreams and invest in your employees. But it’s also important to push away stubbornness, stay open minded to change, and work on developing a successor so one day you can step away and enjoy life.

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