My Life and Work
believe a man can ever leave his business. He ought to think of it by
day and dream of it by night. It is nice to plan to do one's work in
office hours, to take up the work in the morning, to drop it in the
evening--and not have a care until the next morning. It is perfectly
possible to do that if one is so constituted as to be willing through
all of his life to accept direction, to be an employee, possibly a
responsible employee, but not a director or manager of anything. A
manual labourer must have a limit on his hours, otherwise he will wear
himself out. If he intends to remain always a manual labourer, then he
should forget about his work when the whistle blows, but if he intends
to go forward and do anything, the whistle is only a signal to start
thinking over the day's work in order to discover how it might be done
better.
The man who has the largest capacity for work and thought is the man who
is bound to succeed. I cannot pretend to say, because I do not know,
whether the man who works always, who never leaves his business, who is
absolutely intent upon getting ahead, and who therefore does get
ahead--is happier than the man who keeps office hours, both for his
brain and his hands. It is not necessary for any one to decide the
question. A ten-horsepower engine will not pull as much as a twenty. The
man who keeps brain office hours limits his horsepower. If he is
satisfied to pull only the load that he has, well and good, that is his
affair--but he must not complain if another who has increased his
horsepower pulls more than he does. Leisure and work bring different
results. If a man wants leisure and gets it--then he has no cause to
complain. But he cannot have both leisure and the results of work.
Concretely, what I most realized about business in that year--and I have
been learning more each year without finding it necessary to change my
first conclusions--is this:
(1) That finance is given a place ahead of work and therefore tends to
kill the work and destroy the fundamental of service.
(2) That thinking first of money instead of work brings on fear of
failure and this fear blocks every avenue of business--it makes a man
afraid of competition, of changing his methods, or of doing anything
which might change his condition.
(3) That the way is clear for any one who thinks first of service--of
doing the work in the best possible way.
CHAPTER III
STARTING THE REAL BUSINESS
In the little brick shop at 81 Park Place I had ample opportunity to
work out the design and some of the methods of manufacture of a new car.
Even if it were possible to organize the exact kind of corporation that
I wanted--one in which doing the work well and suiting the public would
be controlling factors--it became apparent that I never could produce a
thoroughly good motor car that might be sold at a low price under the
existing cut-and-try manufacturing methods.
Everybody knows that it is always possible to do a thing better the
second time. I do not know why manufacturing should not at that time
have generally recognized this as a basic fact--unless it might be that
the manufacturers were in such a hurry to obtain something to sell that
they did not take time for adequate preparation. Making "to order"
instead of making in volume is, I suppose, a habit, a tradition, that
has descended from the old handicraft days. Ask a hundred people how
they want a particular article made. About eighty will not know; they
will leave it to you. Fifteen will think that they must say something,
while five will really have preferences and reasons. The ninety-five,
made up of those who do not know and admit it and the fifteen who do not
know but do not admit it, constitute the real market for any product.
The five who want something special may or may not be able to pay the
price for special work. If they have the price, they can get the work,
but they constitute a special and limited market. Of the ninety-five
perhaps ten or fifteen will pay a price for quality. Of those remaining,
a number will buy solely on price and without regard to quality. Their
numbers are thinning with each day. Buyers are learning how to buy. The
majority will consider quality and buy the biggest dollar's worth of
quality. If, therefore, you discover what will give this 95 per cent. of
people the best all-round service and then arrange to manufacture at the
very highest quality and sell at the very lowest price, you will be
meeting a demand which is so large that it may be called universal.
This is not standardizing. The use of the word "standardizing" is very
apt to lead one into trouble, for it implies a certain freezing of
design and method and usually works out so that the manufacturer selects
whatever article he can the most easily make and sell at the highest
profit. The public is not considered either in the design or in the
price. The thought behind most standardization is to be able to make a
larger profit. The result is that with the economies which are
inevitable if you make only one thing, a larger and larger profit is
continually being had by the manufacturer. His output also becomes
larger--his facilities produce more--and before he knows it his markets
are overflowing with goods which will not sell. These goods would sell
if the manufacturer would take a lower price for them. There is always
buying power present--but that buying power will not always respond to
reductions in price. If an article has been sold at too high a price and
then, because of stagnant business, the price is suddenly cut, the
response is sometimes most disappointing. And for a very good reason.
The public is wary. It thinks that the price-cut is a fake and it sits
around waiting for a real cut. We saw much of that last year. If, on the
contrary, the economies of making are transferred at once to the price
and if it is well known that such is the policy of the manufacturer, the
public will have confidence in him and will respond. They will trust him
to give honest value. So standardization may seem bad business unless it
carries with it the plan of constantly reducing the price at which the
article is sold. And the price has to be reduced (this is very
important) because of the manufacturing economies that have come about
and not because the falling demand by the public indicates that it is
not satisfied with the price. The public should always be wondering how
it is possible to give so much for the money.
Standardization (to use the word as I understand it) is not just taking
one's best selling article and concentrating on it. It is planning day
and night and probably for years, first on something which will best
suit the public and then on how it should be made. The exact processes
of manufacturing will develop of themselves. Then, if we shift the
manufacturing from the profit to the service basis, we shall have a real
business in which the profits will be all that any one could desire.
All of this seems self-evident to me. It is the logical basis of any
business that wants to serve 95 per cent. of the community. It is the
logical way in which the community can serve itself. I cannot comprehend
why all business does not go on this basis. All that has to be done in
order to adopt it is to overcome the habit of grabbing at the nearest
dollar as though it were the only dollar in the world. The habit has
already to an extent been overcome. All the large and successful retail
stores in this country are on the one-price basis. The only further step
required is to throw overboard the idea of pricing on what the traffic
will bear and instead go to the common-sense basis of pricing on what it
costs to manufacture and then reducing the cost of manufacture. If the
design of the product has been sufficiently studied, then changes in it
will come very slowly. But changes in manufacturing processes will come
very rapidly and wholly naturally. That has been our experience in
everything we have undertaken. How naturally it has all come about, I
shall later outline. The point that I wish to impress here is that it is
impossible to get a product on which one may concentrate unless an
unlimited amount of study is given beforehand. It is not just an
afternoon's work.
These ideas were forming with me during this year of experimenting. Most
of the experimenting went into the building of racing cars. The idea in
those days was that a first-class car ought to be a racer. I never
really thought much of racing, but following the bicycle idea, the
manufacturers had the notion that winning a race on a track told the
public something about the merits of an automobile--although I can
hardly imagine any test that would tell less.
But, as the others were doing it, I, too, had to do it. In 1903, with
Tom Cooper, I built two cars solely for speed. They were quite alike.
One we named the "999" and the other the "Arrow." If an automobile were
going to be known for speed, then I was going to make an automobile that
would be known wherever speed was known. These were. I put in four great
big cylinders giving 80 H.P.--which up to that time had been unheard of.
The roar of those cylinders alone was enough to half kill a man. There
was only one seat. One life to a car was enough. I tried out the cars.
Cooper tried out the cars. We let them out at full speed. I cannot quite
describe the sensation. Going over Niagara Falls would have been but a
pastime after a ride in one of them. I did not want to take the
responsibility of racing the "999" which we put up first, neither did
Cooper. Cooper said he knew a man who lived on speed, that nothing could
go too fast for him. He wired to Salt Lake City and on came a
professional bicycle rider named Barney Oldfield. He had never driven a
motor car, but he liked the idea of trying it. He said he would try
anything once.
It took us only a week to teach him how to drive. The man did not know
what fear was. All that he had to learn was how to control the monster.
Controlling the fastest car of to-day was nothing as compared to
controlling that car. The steering wheel had not yet been thought of.
All the previous cars that I had built simply had tillers. On this one I
put a two-handed tiller, for holding the car in line required all the
strength of a strong man. The race for which we were working was at
three miles on the Grosse Point track. We kept our cars as a dark horse.
We left the predictions to the others. The tracks then were not
scientifically banked. It was not known how much speed a motor car could
develop. No one knew better than Oldfield what the turns meant and as he
took his seat, while I was cranking the car for the start, he remarked
cheerily: "Well, this chariot may kill me, but they will say afterward
that I was going like hell when she took me over the bank."
And he did go.... He never dared to look around. He did not shut off on
the curves. He simply let that car go--and go it did. He was about half
a mile ahead of the next man at the end of the race!
The "999" did what it was intended to do: It advertised the fact that I
could build a fast motorcar. A week after the race I formed the Ford
Motor Company. I was vice-president, designer, master mechanic,
superintendent, and general manager. The capitalization of the company
was one hundred thousand dollars, and of this I owned 25 1/2 per cent.
The total amount subscribed in cash was about twenty-eight thousand
dollars--which is the only money that the company has ever received for
the capital fund from other than operations. In the beginning I thought
that it was possible, notwithstanding my former experience, to go
forward with a company in which I owned less than the controlling share.
I very shortly found I had to have control and therefore in 1906, with