We looked at the leadership traits and style of Henry Ford and found that he was a great leader, however if he had to work in today’s business world he would have to adapt to the way modern leaders deal with managing change. The examples we found of Ford’s business practices suggested he had a very direct and dictatorial management style and after years of success he failed to adapt change to his business when it needed it most. As a result, rival companies seized on changing market trends, while Ford stayed true to his vision and strategy.
Henry Ford’s vision and perseverance was the reason Ford Motor Company was successful but that success would be hard to emulate in the current poor economic conditions and ever-changing market trends we are faced with today. There are, however, very few people like Henry Ford. We may assume that he won’t be as effective a leader today as he was some 90 years ago but you just know he would be successful. Ford was a visionary, and to give you an example of this around 100 years ago he gave Thomas Edison $1.
5 million to build an electric battery that could run a car (Gunderson, 2009), which proved he had a good idea how the motor industry was going to progress. That kind of idea relevant to today’s market could see Ford progress in today’s world. Contents 1) Introduction 2) The person under study 3) Leadership 4) Effective leadership 5) Conclusion 6) Appendices 7) References 1) Introduction This paper will identify the leadership capabilities of Henry Ford, looking at how those capabilities are compared to theories on leadership including the author’s definition.
We will also look at what it takes to be an effective leader, if Henry Ford can be considered an effective leader and if his leadership qualities would produce the same level of success in today business environment? 2) The person under study Henry Ford (Ford) was an extremely interesting individual, hugely successful with strong self-belief and a hard working mentality. In many articles and reports, Ford gets referred to as an innovator. Yet for all his acclaim he didn’t invent anything.
He was hugely successful in manufacturing automobiles and revolutionised the assembly line creating 8-hour shifts, ensuring his factories were operational 24 hours a day. He was publically acclaimed for paying his workers above average pay and after two failed businesses launched the hugely successful Ford Motor Company. He made sure that he owned the factory’s that built raw materials that were required to build automobiles and bought 7,000 dealers nationwide to ensure he had a direct network to sell cars.
A more in detail understanding of Ford’s life and career can be found in appendices A. 3) Leadership The author’s definition of a leader is someone that sets a direction for others to follow, developing a vision and strategically planning what needs to be done to deliver that vision. Someone that is able to influence others to believe and follow a specific path. Leaders are not just CEO’s and Managing Directors, otherwise how would new leaders be born? A leader requires self-belief, creativity, drive, a persuasive manner and followers.
It’s not just about your intellect, the training you have received, it’s also about seeing the way forward, knowing what needs to be done, getting the right people involved, creating an action plan and communicating it effectively (see Drucker, 2001). Kotter (1990) helps with this definition by suggesting that a leader is a person with a vision, who aligns people to that vision through effective communication. They build a coalition with people who can aid the development of their vision. Kotter (1990) looked at the role of a leader and how it differed from that of a manager.
The table below looks at differences in functions between leadership and management. Table 1. 1 | Leadership| Management| Creating an agenda| Decide on the appropriate direction and create a strategy| Would deal with the delivery of the strategy, action plan and budgets| Developing people| Align people – get them ready for change and make them believe their efforts will achieve the goals set | Deal with procedures and operational structure including staffing requirements| Execution| Motivating and inspiring – Looking at intrinsic and extrinsic factors to increase performance and making sure everyone knows what’s expected of them.
| Reporting on delivery against budget, making the relevant changes to ensure success. | Outcomes| Effective and successful change. | Provides a process of consistency and understanding. | This kind of comparison not only allows us to see how leadership is adapted in an organisation but how leadership is different to management. The two roles are very different, but both work towards the same organisational goals.
Where leadership will deal with change, whether that is as a result of competition or economic issues, like deregulation or change in consumer trends; management will deal with operational processes to reduce confusion and monitor development. In contrast to this, Mintzberg (1977) believed that management and leadership roles overlap. That operationally, the concepts of the two roles don’t fit neatly together. Leadership is a function within a management role and a manager has to possess some leadership qualities in order to be effective.
In Kotter’s (1990) comparison, it could be seen that the process leads from a leader to the manager, i. e. the leader looks at what needs to be done and implements a strategy, and then a manager deals with the planning and operational procedures to fulfill it. That being said, it could be the case that an individual in a management position is already a leader. To be a leader all you need is followers, therefore, leaders could be found at any level in an organisation (see Goffee and Jones, 2000).
After identifying the functions of a leader the question has to be asked, is there a specific set of traits that define a leader? Cannell (2008) believed the qualities of a successful leader were generally high intelligence, high level of knowledge in their field, excellent with people, ability to inspire, excellent communication, and self-awareness of strengths and weaknesses. Some thirty to sixty years before Cannell, Stogdill (1948, 1974) had undertaken many trait studies trying to discover the qualities of a leader, which came to be known as ‘great man theory.
’ This theory argued that great leaders were born and it didn’t matter what the circumstances were, this individual would rise to power, take control and lead. The traits discovered are as followed; Table 1. 2 STOGDILL| Desire for responsibility| Completion of task and jobs| Strong pursuit of goals| Problem-solving| Very initiative in social environment| Self-confidence| Understanding of who you are| Responsible for decision-making| Does not let stress effect their role| Extremely tolerant| Able to influence others| Manage people to move in direction desired|
After identifying various character traits of a leader we should look at how they reflect on our chosen leader, Henry Ford, as well as looking at his capabilities as an effective leader. 4) Effective Leadership; Goleman (1998) gives us an insight into what it takes to be an effective and great leader. His research suggested that in order to be an effective leader you needed more than a vision, followers, high intelligence and technical skill. All great leaders needed a high-level of what is referred to as emotional intelligence.
Goleman describes emotional intelligence as the way that great leaders maximise their performance, and the performance of the people that follow them. Emotional intelligence has five components: 1) Self-awareness – a skill that allows a leader to understand their own strengths and weaknesses, and to know what drives and motivates them. 2) Self-regulation – Being able to manage your emotions, ensuring you stay in control of each situation, remaining professional at all times. 3) Motivation – Delivering on your vision because you believe in it and want it
to succeed for the sake of achievement, as opposed to monetary reward or status. 4) Empathy – Being considerate and sensitive towards other people’s feelings and balancing these factors with the necessity to drive organisational performance. 5) Social Skill – Being able to communicate effectively so everyone understands what you’re asking of him or her. Having a persuasive manner to build relationships in order to get people working in the direction you and the organisation requires. The table below (1.
3) shows the connections between emotional intelligence and Ford’s leadership traits taken from Stogdill’s (1948; 1974) ‘great man theory’ traits list. Table 1. 3 EI = Emotional Intelligence EI| FORD’S TRAIT’S| EXPLANATION| Source| Self-awareness| Desire for responsibility| Ford made most of the management decisions at Ford Motor Company as he wanted to make sure that his plan was being implemented exactly how he instructed. | Gunderson, (2009)| Self-awareness| Completion of task and jobs| Right from an early age Ford developed his mechanical talent for building and engineering things.
He was able to recruit, manage and deliver each product every time. | (Casey, Tuczek, Braden, 2011)| Self-awareness| Self-confidence| Ford’s sheer perseverance in following his dream showed great self-confidence, even when businesses failed, he believed what he was doing was right and started again. | (Casey, Tuczek, Braden, 2011)| Self-awareness| Responsible for decision-making| Often looked at what needed to be done; when a cheaper car was needed to widen Ford’s potential market he delivered it. Even when his own associates and directors thought he was making the wrong decision he asked, Was it right for the enterprise?
It proved that it was and the company sold in excess of 15 million Model T’s. Ford saw an opportunity and made a decision to do it (see Drucker, 2004). | (Casey, Tuczek, Braden, 2011)| Self-regulation| Does not let stress effect their role| Ford had an extremely strict management style but always presented himself professionally. | Gunderson, (2009)| Motivation| Strong pursuit of goals| After Ford’s second failed venture he moved on to racing cars, building and racing them. Showing that he wasn’t afraid of taking risks. The success that this brought meant that Ford was able to attract investment for a third time.
Ford Motor Company was born in 1903. | (Casey, Tuczek, Braden, 2011)| Motivation| Problem-solving| Ford wanted to keep his factory open 24 hours a day so he introduced three, 8-hour shift patterns. Exploiting every opportunity to increase organisational performance. | Gunderson, (2009)| Social Skill| Able to influence others| From a very young age he was able to recruit others to be involved his projects. In the early days to help him build waterwheels and simple steam engines and later in his career, investors. This developed through his career, as three times he was able to secure investment.
| (Casey, Tuczek, Braden, 2011)Leadership With You. com (2011)| Social Skill| Manage people to move in direction desired| Through his above average pay for workers, Ford found it very easy to recruit top talent. His believed that paying them well and reducing shifts to 8-hours could keep his factories working 24-hours, which meant his company could produce more cars, while the workforce were highly committed working in the direction Ford required. | Gunderson, (2009)| This information shows that Ford has many qualities linked to components of emotional intelligence, allowing us to term Ford a capable leader.
However, we should look at his weaknesses as well. Table 1. 4 shows Ford’s weaknesses connected to emotional intelligence. Table 1. 4 EI = Emotional Intelligence EI| FORD’S TRAIT’S – negative| EXPLANATION| Source| Self-awareness| Understanding of who you are| Although Ford learned everything he could about manufacturing things his poor business knowledge was the main reason for his two failed business ventures. | (Casey, Tuczek, Braden, 2011)| Self-awareness| Responsible for decision-making | Around 1930 Ford failed to change his strategy and adapt to new behaviours and values being shown by his customers.
He refused to adapt his product, even though his followers acknowledged these trends, in this instance the company’s executives. He did not seize on the opportunity to mobilise his organisation and thrive on potential new business (see Heifetz and Laurie, 2001). Although this had a negative impact on the business it could be seen as positive sign of leadership. | (Casey, Tuczek, Braden, 2011)Gunderson, (2009)| Self-regulation| Extremely tolerant| Ford was not always tolerant of failure. He would often punish employees for not keeping within his very tight regime for conduct, even in their social time.
| Whitney, (2011)| Social Skill| Able to influence others| Ford had a department that monitored employees, even in their social activities. He knew how vital his employees were and stamped down on hard on them if they stepped out of line. | Whitney, (2011)| We can see that there are lots of links between the ‘great man theory’ and ‘emotional intelligence,’ with just one area that doesn’t seem to match, that of empathy. Empathy is seen as a key factor in leadership, especially in understanding the best method in which to manage relationships between your customers, clients, and employees.
Empathy, though, is not just about understanding your employee’s perspective and being considerate. Neither is just about giving into what they want, it can also be about giving them what they need (see, Goffee and Jones, 2000). From our research we cannot see any signs of Empathy within Ford. Ford wanted his followers to do exactly what he wanted them to do and for that he would reward them well, financially. Ford had a very dictatorial-style of management and nothing was going to stop him delivering his vision (Gunderson, 2009). In table 1.
3 we can see that Ford has many of the traits associated with the ‘great man theory. ’ Strength’s like desire for responsibility, constantly pursuing his goals and being responsible for decisions made are strong traits found in Ford. In table 1. 4 we’ve, however, identified Ford’s lack of business knowledge, yet this cannot be considered a relevant argument. He clearly learned from mistakes in his early career and improved his self-awareness. Goleman (1998) did say that emotional intelligence was something that could be learnt and improved.
Ford clearly, as we can see in table 1. 3, did improve his ability to analyse his own strengths and weaknesses. However his inability to be tolerant and the conflict in his methods of influencing others presents flaws in his emotional intelligence, and in today’s working environment are seen as important in leadership. This kind of leadership is defined as ‘transformational. ’ This is a leader that by communicating their vision can increase the levels of motivation and commitment in their followers. Rosener (1990 p.
120) argued that leaders who follow ‘transformational’ leadership can really make its workforce feel part of the company by communicating their vision effectively, increasing commitment levels and focusing on motivation to get everyone ‘on-board’ and working in the same direction. Another way a leader can drive performance is by showing their passion to drive their vision in order for it to drive their followers (Adair, 2003), and by engaging with their people, to unlock their talent and inspire trust and confidence. This style of leadership is known as ‘Inspirational.
’ However, from what we have discovered with Ford, he is more of a ‘transactional’ leader, someone who uses rewards and punishment to dictate their follower’s behaviour. This can be seen in Ford’s traits, where he had a department to control and monitor staff behaviour and if they fell in line with Ford’s requirements they would benefit from the above industry average $5 a day wages, but if they didn’t they would punished or even sacked (Whitney, 2011). We are getting to understand the character traits and style of Ford but we still need to find out whether he was an effective leader.
Drucker (2001) described an effective leader as someone that looks at what needs to be done, asking ‘what’s right for the organisation. ’ They would then develop action plans and be responsible for the decision they made. A great leader treats change as an opportunity focusing on those opportunities to produce results. It is interesting that Drucker should include managing change in effective leadership. If we go back to Kotter’s (1990) functions of a leader, he described the outcomes as successful change. Therefore, to be an effective leader do you need to have more than just a vision and followers?
In an interview with the CIPD (2011), Professor Gary Hamel, a consultant for Microsoft and Proctor & Gamble among others, spoke about effective leaders being able to adapt to each situation. A strong leader would look to create an adaptable and engaging environment and look to increase innovation. With the poor economic environment we have at the moment, Professor Hamel went on to suggest that long-term strategy was about implementing short-term goals. Therefore, effective leadership was about identifying the changes the business required and putting small steps in place to improve productivity.
These times require innovation, a new way of thinking, even if that meant that some of the small steps failed. At least then, you’ve learned something and can do something about it and move forward. This kind of adaptive change was something Heifetz and Laurie (2001) discovered in their research, which presented strong evidence that effective leaders dealt with adaptive change very well. An example could be to adapt behaviours within the workforce to a new direction the business was taking, whether that is focusing on new business areas or growth in existing ones.
Heifetz and Laurie’s research suggested that leaders could manage relationships with their followers to influence their approach to work, by establishing what was expected of them and the value they had to the organisation. We can see that Ford did not do this and therefore, gives us further understanding of the type of leader he was. We have looked at his methods compared with those used today and we can see that Ford was a successful leader in his time but may struggle with the constant change required in organisation’s today. 5) Conclusion
We identified that Ford had a vision and he was able to attract followers who understood and supported his vision. Ford’s vision was not just about building automobiles, he wanted to improve the quality of automobiles and make them more affordable to more people. He succeeded. We have learned many things from Ford’s leadership. 1) You can learn from failures as much as success. Ford didn’t let his first two business failures effect his belief and drive for success. 2) That radical decisions can be prudent business decisions. He showed his employees that if they work hard for him, he would reward them with high earnings and shorter hours.
For that they became loyal and committed and as result his factories were able to run longer by having three, eight hour shifts. 3) Persistence in pursuing goals. Ford may have fulfilled his vision, yet he continued to expand it. By buying the factory overseas he made sure he was in complete control of the manufacturing of his cars and by buying 7,000 dealers nationwide gave the company a direct network to sell his cars. 4) You don’t need to invent something to be successful. You just need to be the best. Ford did not create the automobile but he did revolutionise the way in which it was built.
We know what it is to be a capable leader. A capable leader is intelligent and has good technical ability, and through Cannell (2008) and Stogdill (1948; 1974) we can see the traits of a leader and agree that Ford has many of them. To be effective, a capable leader needs to have high levels of ‘emotional intelligence. ’ Ford had many strong factors when analysing his emotional intelligence but he lacked in empathy. A factor that became apparent when he decided not to build more expensive, better quality cars when the market, and fellow Directors, were calling for this.
Referring back to Drucker (2001) who wrote, “about doing what was right? ” And “doing what was right for the enterprise? ” Ford certainly did things right. He learned from the failures of his first two companies and used that experience and increased knowledge to source investment for a third time. He did many things right in taking Ford Motor Company to number 1 in the US motor car sector, but when competition was growing and changes were required to adapt to changing trends in the market, did Ford in this instance do what
was right? Ford ignored the change in market trends, he ignored his fellow directors and associates and his business suffered because of it. After listening to Professor Gary Hamel (CIPD, 2011) and research from Heifetz and Laurie (2001) regarding adaptive change, successful leaders are able to lead change and it’s difficult to see how Ford could be an effective leader in today’s business environment as he refused to adapt change to his business.
Let’s not forget though, that the long-term strategy of Ford had worked and when looking at the business growth cycle (‘Black Box’) he had led the company through start up, growth and into maturity, and yes, then into decline but Ford did fight back and use entrepreneurial spirit and innovation in his strategic leadership style as a ‘Champion’ to create Ford Motor Company into a massive success and up until this time ahead of all their competitors (Clarke and Pratt, 1981; Rodrigues, 1988).
Ford believed in his vision and he was hugely successful but maybe he should have put the company into someone else’s hands in order for it to continue to grow (see Rajan, 2002). What successful leaders do in today’s business environment is adapt to the current situation, always looking to thrive on opportunities. Leaders develop young talent and are able to build commitment and loyalty while valuing knowledge as a commodity. Allowing their followers to bring innovation and creativeness to work.
Effective leaders create adaptable and engaging environments so that everyone knows what is expected of them and how their roles impact the organisation’s goals. Henry Ford was an effective leader for his time; he believed in his vision and stuck to it. It was maybe this rigidness that allowed competitive company’s to overtake Ford Motor Company towards the end of Ford’s reign but he was extremely innovative and you can be sure that someone with that much creativeness and eye for an opportunity would succeed in today’s business world.
He would have had to adapt to the changing economic conditions, he would have to show more empathy to his workforce and revise his employee engagements including his reward schemes but most businesses today would want Henry Ford in their business as opposed to against him. Therefore, not only is he a great innovator, he is a capable leader in any era. 6) Appendices Appendices A. Henry Ford (Ford) was born on a farm in Michigan in July 1863. In his youth he had a love of steam engines and discovered he had a mechanical talent.
With the assistance of other boys built waterwheels and simple steam engines before becoming an apprentice at the Michigan Car Company, who build railroad cars. This was the beginning of Ford realising his creativeness and desire to build and engineer things as well as the ability to recruit and lead others. Over the next few years he frequently moved jobs when he thought he had learnt all he could before, in 1882, returning home to operate and repair steam engines for farmers. Ford showed that he had a thirst for learning; a desire to learn everything there was to know about engineering.
Ford here showed a great deal of self-confidence and intelligence be ensuring he knew everything he knew about what it was he was doing. These two leadership traits can be found in numerous models including that of Kreitner and Kinicki (2001). In 1888 Ford married and moved to Detroit where he would for and become long term friends with Thomas Edison at Edison Illuminating Company. By 1896 he became a Chief Engineer but by this point had other interests and wanted to build a horseless carriage. Ford, after recruiting friends to assist, built his first automobile in 1896, with the second bring built two years later.
Ford finally had the chance to realise his vision. Ford then secured investment to begin making and selling horseless carriages. He had the vision but his lack of experience of running a company meant that the company failed. As did his second venture. Ford had to learn from his mistakes, as he believed in his vision, and therefore looked at ways of re-inventing his vision and again finding others to follow it and more importantly invest in it. Ford moved on to racing cars, building and racing them. Showing that he wasn’t afraid of taking risks. The success that this brought meant that Ford was able to attract investment for a third time.
Ford Motor Company was born in 1903. This new venture gave Ford the opportunity to sell his vision to others and he began recruiting high quality young talent who understood his vision and believed in it. Over the next decade Ford Motor Company would produce cars like the Model A, Model N and then the Model T. After getting the Model A and N to market, Model N being the best selling car in the US, Ford gained knowledge from his market and realigned his vision and strategy. The outcome was the Model T. A car that was better than anything he had built before and cheaper, so that far more people that didn’t have a car could afford it.
The Model T was hugely successful. Ford had shown to be an effective leader. He had looked at what needed to be done, a cheaper car to widen the potential market. Was it right for the enterprise? It proved that it was selling in excess of 15 million Model T’s. Ford saw an opportunity, he made a firm decision and made sure everyone knew what was needed (See Drucker, 2004). This success gave Ford an attitude that he knew exactly what the industry wanted. However, when Ford Motor Company executives and customers were requesting vehicles with more quality and comfort, Ford did not listen. Sales began to decline.
At this part, Ford had proved that he had a formula to be successful but he failed to change his strategy and failed adapt to new behaviours and values being shown by his customers and recognized by his followers, in this instance the company’s executives. He did not seize on the opportunity to mobilise his organisation and thrive on potential new business (see Heifetz and Laurie, 2001). However, in 1932 Ford did lead a top-down management change where he controlled a change in product line, as he launched the industry-changing V8 engine. Ford once again showed his creative ability to adapt to the evolving market.
Was Ford at this point holding on to power and exploited his innovation to keep control? Ford had in the past recruited very young but wasn’t open to a bottom-up approach where he could listen to that talent, no matter at what level, to move the company forward (Gioia and Thomas, 1996; Lupton, 1991). This chosen approach did improve sales over the next fours years but in Ford’s advancing years he did struggle to keep Ford Motor Company ahead of their competition and by 1936 fell to third in the US automobile manufacturing rankings. 7)
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