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I normally don’t talk about behemoth corporations, but I am standing and applauding Ford’s announcement of record third quarter profits earlier this week. Ford’s announcement is a great boost to the power of the American economy over the current political attitude of bailouts and handouts to cover the tracks of bad management.
For the first 125 years of its life, America was the land of entrepreneurs. Ironically, Henry Ford was the architect of shifting the nation’s focus from self-reliance and entrepreneurship to the focus of big companies and the government providing for its citizens. We are now witnessing Ford once again lead a big change in our nation’s thinking, but this time it’s away from excessive government control of business.
Why did Ford succeed without a dime of government money while General Motors and Chrysler continue to struggle despite massive government bailout money? Here are three reasons.
- Fresh perspectives – GM and Chrysler hung on far too long to outdated management and methods. Ford hired an aggressive outsider, Alan Mulally, who shifted the culture of Ford. GM continued to retained long-time company insiders who were unwilling to change the company to match the times. Mulally’s willingness to challenge the status quo allowed Ford to move more quickly.
- A “burn the boats” mentality – Ford realized that accepting outside money would let it continue accepting the status quo. Ford’s willingness to go it alone forced it to look within itself for solutions. GM and Chrysler did not have the motivation to work smarter and faster to solve its own problems. Like Hernando Cortez “burning the boars” in the 16th century, Ford had no choice but to shape its own destiny.
- A focus on what customers want now – Fprd, GM, and Chrysler made huge profits by selling high-margin trucks and sport utility vehicles in the early 2000s. When gas prices hit record highs, this demand dried up and the automakers slumped. Ford was able to adapt to the new consumer mindset and introduced the Fiesta subcompact car, tapping into this new source of demand.
Ford is a great example of forging your own path and becoming self-reliant. In an age where people are looking for someone else to bail them out, we need to demonstrate how Ford shows the American spirit. Funny how things seem to come full circle.
