By Ivan Yong Wei Kit. Ivan is an organisational psychologist, engineer, and author living in Taiping, Malaysia. Please read his article and leave thoughts and comments below.
Contrary to popular belief, Henry Ford wasn’t denying the fact that customers know best when he famously said, “If I had asked people what they wanted, they would have said faster horses.” If one were able to read between the lines of that famous saying, one would be able to see that the perspicacious Ford had indeed found the solution to a faster horse for his prospects.
The only hurdle was to get everyone to agree that the “faster horse” he offered would have a mechanical heart, running legs made of steel and with interchangeable parts for torn muscles.
Ford realised that he had to make the Model T ubiquitous.
This he cleverly achieved by mass producing the automobile, making them identical in every way, including colour; he kept the cost low and affordability high. The Model T was truly economical, selling at only US$825 in 1908 ($23,010 today). Furthermore, Ford made certain that the price would continue to fall every year, that by 1920s, the Model T could be seen everywhere in America.
Fordism or the school of thought wherein goods can be produced inexpensively through mass production whilst keeping wages high for workers, was the new black.
Clearly, Ford knew his customers well. The 1920s was a difficult period, and with the Great Depression affordability was key. Only a person with his customers at heart would be willing to sell an engine marvel, to which he had given the best years, so inexpensively.
Today, most companies who are able to innovate new products and solutions, would first engage lawyers and file Intellectual Property protection with the sole purpose of fetching a high price for them. A typical example would be that of the pharmaceutical companies which had, for many years, been selling prescription (Rx) drugs at exorbitant rates, leaving them out of the reach of many needy patients of poorer standings.
Born on a farm in 1863 to a migrant father in Greenfield Township, Michigan, Ford hated it. However, when Model T was first rolled out of its Detroit assembly line, Ford was eager to sell the automobile to the farmers because he knew how useful that Model T would be to them. Ford was not refusing his customers a “faster horse” but simply bringing a solution that was ahead of its time. The Model T was designed to produce 20 horse power at the top speed of 45 mph (72 km/h), which in layman term meant that Model T was able to produce power of an equivalent of 20 horses for an extended period of time.
The farmers would have a machine of the power of 20 horses which would not be beset by fatigue, thus increasing their harvest and ultimately their livelihood. Again, Ford demonstrated a deep understanding of his customers at large and also the unique requirements of a certain niche segment of them.
Last but not least, Ford, a renowned pacifist, believed that consumerism was the key to peace. The world of his time, was constantly at war and he was strongly against it, as it was to him a “terrible waste”. While he had been unsuccessful in trying to avert World Wars I and II with consumerism, he managed to introduce the concept of “mass consumption” to the world.
Mass consumption is, in its simplest form, consumerism at its peak. It is a symbiotic relation whereby a large market of consumers is able to afford to consume the products manufactured, thereby boosting the manufacturer’s profit and keeping them in business. Vice versa, manufacturers would continue to produce affordable products for the market. In Ford’s case, he was able to achieve that with “Fordism”.
Through the pursuit of mass consumption, Ford was instrumental in shaping the socioeconomic of modern day America, heralding an era of prosperity. The reason for this is that a key criteria of mass consumption is the rising prosperity of the consumers, and that he achieved by paying higher wages to increase productivity, which in return would keep the cost of Model T low.
In short, a prosperous society would, in Ford’s mind, avert war and channel that energy into building a wealthier and flourishing country.
Ford was a maverick who was ahead of his time. Not only had he changed the way we travel, work and consume products, he also had created the means and the system to allow consumerism to sustain itself. Above all, it was also a means to keep the world at peace.
Undoubtedly, Henry Ford understood his customers intimately, and was prescient of the modern world that we live in today.