Henry Ford — Principles of business
Henry Ford about his success and the main principles of good service
Labor was considered by Ford as the most important factor for success of a business and of a country. He said that labor is the human element which makes the fruitful seasons of the earth useful to men. The moral fundament of life is also a labor and man’s right in it.
On a more concrete level, on a level of one company, a good service is what brings the best fruits. This was a true business in Henry Ford’s opinion. «Money chasing is not a business», said he. He was sure that a producer depends for his prosperity upon serving the people. It can happen that a producer gets by for a while serving himself, but if he does, it will be purely accidental, and when the people wake up to the fact that they are not being well served, the end of this producer is almost there.
Money is absolutely important for business, but the one has to remember that money is not the goal. «Money comes naturally as the result of service» and it’s an opportunity to make service better and to develop further.
It is very important to get stuck to a fact that a manufacturer is not through with his customer when a sale is completed. It’s only the beginning! It can be clearly seen on an example of automobile business — if the machine doesn’t give good service, then it is better for the manufacturer if he never had the introduction, because in this case he gets the worst possible advertisement, which is a dissatisfied customer.
Doing the work in the best possible way was only one principle of competition for henry Ford. As it was said before he used to put labor on the first position and in this meaning too. Due to this he disregarded monopoly and competition which leads to it. He often mentioned that time spent in fighting competition is wasted and it had better be spent in doing work.
Ford himself summarized his business principles in for the most important points: Which graphically can be presented as:
- An absence of fear of the future or of veneration for the past. One who fears the future, who fears failure, limits his activities. Failure is only the opportunity more intelligently to begin again. There is no disgrace in honest failure; there is disgrace in fearing to fail. What is past is useful only as it suggests ways and means for progress.
- A disregard of competition. Whoever does a thing best ought to be the one to do it. It is criminal to try to get business away from another man—criminal because one is then trying to lower for personal gain the condition of one’s fellow-men, to rule by force instead of by intelligence.
- The putting of service before profit. Without a profit, business cannot extend. There is nothing inherently wrong about making a profit. Well-conducted business enterprises cannot fail to return a profit but profit must and inevitably will come as a reward for good service. It cannot be the basis—it must be the result of service.
- Manufacturing is not buying low and selling high. It is the process of buying materials fairly and, with the smallest possible addition of cost, transforming those materials into a consumable product and distributing it to the consumer. Gambling, speculating, and sharp dealing tend only to clog this progression.
More detailed information you can find in his book «Today and Tomorrow» which was published in 1926 but since then haven’t lost relevance and is still a valuable source of ideas and inspiration for new generations of managers and businessmen.