On May 26th, 1927, Henry Ford and his son Edsel drove the very last Model T off the factory floor. Henry declared it the 15 millionth Model T, a fairly egregious, though unnecessary, exaggeration. It would be almost fifty years before the Volkswagen Beetle would beat that number.
It’s hard to overstate the impact of the Model T. While on the market, it not only accounted for almost half of all cars sold, at one point, half of the cars in the world were Fords. Its vast reach brought life-changing mobility and freedom to tens of millions of people.
That had been Henry Ford’s mission. He had seen the dawn of the age of motorcars and was frustrated that it seemed largely a hobby for the rich. He was convinced he could make a car for the “every man” and designed the Model T to be just that.
Ford was relentless at cutting costs to make the car available to more people. Throughout the almost 20 year run of the Model T the price fell almost continuously. The 1908 model sold for over $900, about $24,000 today. By 1925 the price was down to $260, less than $4,000 today. The cheapest new car you can buy in 2020 goes for more than three times that.
To achieve his vision of the “every man” car, Ford brought many innovations to the process. The Model T was famous for the first moving assembly line, still widely used in manufacturing more than a century later. Coupled with extensive use of machinery, it cut the training required for the workers and pared the build time down to just an hour and half. Fast enough for a new Model T to roll off the line every three minutes. The Model T was also the first car to be widely sold internationally, with plants in over a dozen countries. At the peak, the company was producing nearly 10,000 a day worldwide.
But like many visionaries, Henry Ford had several blind spots. He was quite convinced that the Model T was all the car anyone would ever need. Facing stiff competition, he eventually relented, and the company released the Model A. It featured electric start and was available with a fully enclosed body; luxuries Henry thought were frivolous. Sales were good, but never came anywhere near the Model T.
In the decades that followed, Ford struggled to keep pace with rivals. In the 1950’s the family was forced to sell their stake and take the company public. Under pressure from investors the company suffered its greatest humiliation. The short-lived car named after Henry’s son that would arguably become the greatest business failure of all time. And that’s what this is all about.
This is Leading Smart, the show about Managing in the Brainpower Age. It’s a field guide to the joys and challenges of leading and working in the modern workplace. I’m Chris Williams, your guide to the stories and ideas that I hope will inspire you to be a better leader in the world of knowledge work.
This is the second of our episodes on the importance of having a vision. In this episode we’ll look at the many ways how what you say impacts what you do. This is Episode Twelve: Clear View.
The depression of the 1930s, and the second World War that followed, sent massive shock waves through the automobile industry. The depression was a crucible of consolidation. Many small firms either failed or were swallowed by larger competitors. The war focused the firms that remained on military production, and those massive investments served them well once the war ended. The war’s end also unleashed two decades of pent up consumer demand. The result was an entirely new auto industry.
Leading the charge was General Motors, which had, under the leadership of Alfred Sloan, developed an ingenious step-up strategy to keep buyers in the fold. They arrayed their five brands in a tier structure. At the low end was Chevrolet, the bare bones brand for the cost-conscious buyer. Next was Pontiac, the step-up brand with a little more style and a few more features. It continued up through Oldsmobile, then Buick, and all the way to the top, with Cadillac. For a while you could almost tell the job someone had by the car they drove. Front line workers drove Chevys, their supervisors Pontiacs. Middle managers drove the Oldsmobiles, and the senior leaders the Buicks. At the top, were the executives driving the Cadillacs.
This structure provided explicit delineation and a clear vision for each brand. The customers knew precisely what to expect. Further, it was reinforced inside the company. New styling and features like air conditioning, or later cruise control, were introduced first in the Cadillac, where buyers expected and were willing to pay for the latest innovations. In the following years, these trickled down through the brands, eventually reaching all the way to the Chevys. Here too, the clear understanding by the company and its customers worked to everyone’s advantage. You want air conditioning? You’ll have to step up to the Buick.
Ford, however, struggled in the post-war era. Their focus on cost reduction and low prices that had served them so well pre-war, resulted in stodgy designs that left buyers flat. The company tried to implement a step-up strategy, but with only three rungs on the ladder — Ford, Mercury, and Lincoln — the steps were difficult for many rising wage earners to manage. Worse yet, their flagship line, the Lincoln, was widely seen as only comparable to the Buicks, or even – heaven forbid – the Oldsmobiles.
When Ford went public in 1956, the investors forced the company to address this competitive gap. With the introduction of the Continental division, they moved up-market to compete with Cadillac. And they invented an entirely new brand for the middle, named for Henry Ford’s son, Edsel.
The creation of an entirely new brand was a bold and aggressive strategy. Edsel would have a vast array of 18 new models in a range of prices and body styles, available in 80 different color combinations. And Edsels would be sold through an entirely new network of more than a thousand dealers. All to be developed and introduced in under two years.
This wildly ambitious strategy caused problems that were evident from the start. Internal memos literally begged upper management to delay or go for a more modest introduction. But the marketing was already in full swing. A massive E-Day promotion was planned for September 4th, 1957 with a TV special, The Edsel Show, slated for the following month.
Alas, only four models were available on E-Day, and even they weren’t really ready. Many arrived at the dealership with the bumpers still in the trunk for the dealer to install.
But the core problem with the Edsel was the vision, or lack of one. It was unclear, inside the company and out, where the brand would fit. Though they needed to compete mid-market, the company couldn’t shake its cost-cutting roots. The advertising was a jumble, with white gloved models in furs in front of mansions, while the announcer talked about Edsel as a low-price leader. And the brand, theoretically slated to fit in between Ford and Mercury, cannibalized both. It was priced like a Mercury, yet Edsel’s own ads referenced Fords as competitors.
The initial marketing hype worked, and the first cars sold well. But the production glitches and confused messaging took a heavy toll. Sales plunged over the three-year run, with the one remaining 1960 model selling only 2500 cars. Less than one day’s output from a Model T plant years earlier.
The Edsel division was shuttered, and the company took a humiliating loss. The equivalent of nearly $3 billion dollars today. Largely because the company never really settled on a vision for the brand.
As we discussed in the last episode, without that clear vision, no one inside the company knew what Edsel really was. Internal executive support was reportedly very soft, especially in the competing divisions that Edsel needed as manufacturing partners. The designers got mixed messages which was later reflected in the marketing. And all that internal confusion was telegraphed to the dealers and the customers.
The result of this lack of a clear vision was that the name Edsel would forever be associated with the biggest business failure of the 20th century.
When talking about organizational goals and objectives, I use four words: mission, vision, strategy, and tactics. People often confuse or conflate them, and many smart people will disagree with my definitions. But I use them in very specific ways, to address very explicit leadership goals.
A mission is the over-arching end result that the organization is hoping to achieve over a period of many years. Missions are best when they are lofty, large, and even audacious. A great mission is one that changes the world, or at least your corner of it, and that seems at times so big as to be out of reach.
Some examples might help. The mission of Microsoft in the early years was “a computer on every desk, and in every home, running Microsoft software.” In the 1980s that was an incredibly bold, some even said ridiculous, objective. Yet it was almost completely achieved, if only for a while.
Other examples might be a real estate developer with a mission to “eliminate homelessness in the state of Oregon” which they would achieve by building low-income housing. A school might set their sights on “preparing students to be leaders in the international digital age”.
These kinds of mission are long-term, stretch goals. They won’t change with each new project; they likely won’t change with the dynamics in the marketplace or as the organization grows. Missions might change only every decade or so, perhaps to reflect a new generation of leadership.
A great mission is a valuable asset for the entire organization and will provide the foundation for the many visions and strategies used to accomplish it.
A vision is the objective for a given project, or for a given time frame. It is the specific target that a project is trying to hit. For organizations that work on a yearly cycle, perhaps a school or a sales team, the vision might be this year’s target.
Similar to a mission, a good vision should be a clear stretch for the team. Tough enough to be motivating, not so hard as to seem unobtainable. Setting the goalpost just far enough is part of establishing a great vision and is a topic we’ll discuss in the next episode.
A vision should fit well within the organization’s overall mission. It’s one more step along the road to achieving the larger mission. As I noted in the last episode, a vision that meshes well with the organization deflects criticism and helps to justify the project. With a great vision, Edsel would have had much more support internally and might have been able to meet the lofty objectives.
Visions unlike missions, however, should be narrow, very measurable, and clearly defined. Examples might be for software to be “the fastest spreadsheet on the planet”, or for a building to be “the most energy efficient office building in the state”, or for a sales year to have “the highest gross margins in company history”, or for a school to “increase college acceptances by 15%”. These are aggressive goals, clearly stated, and all are explicitly measurable. The benchmarks against which they will be compared are known, and progress can be carefully tracked. Best of all they are short, crisp, and memorable.
As discussed at length both in the last episode and as we’ve seen in the automotive industry, a great vision can be the difference between success and the most memorable failure of a generation.
Next, as we work down the ladder of detail, is strategy. Strategies are the tools used to accomplish the vision. They are a specific plan to achieve some element of that vision.
For example, a school with a vision to increase college acceptances might employ a number of strategies. They might have a strategy to increase the school’s visibility to desired colleges. And one to improve standardized test scores. And another to improve the availability of attractive extra-curricular activities.
These strategies, coupled with clear objectives and metrics, are how the school plans to increase their college acceptance rates to meet the vision of a 15% increase.
Developing effective strategies relies on industry expertise and creative thinking. But great strategies are key to project success as they are what implement a vision.
Finally, at the most detailed level, are tactics. Tactics are the specific actions used to accomplish any given strategy.
For example, to fulfill the strategy of increasing the school’s visibility, you might have a tactic of doing a broad mailing campaign. Or approaching the right schools at conferences. Or developing relationships with specific department chairs from the desired colleges. One can imagine a variety of tactics you might use to achieve the strategic objective of increasing the school’s visibility.
Like a good strategy, you plan, execute, and measure the effectiveness of each of these various tactics.
With this framework of mission, vision, strategy, and tactics, you can build an entire organization’s goals and objectives.
Tactics are the ground level work executed to implement a strategy. Strategies in turn realize the project’s vision. And a suite of projects each with a clear, concise vision are what achieve the organization’s overall mission.
This structure provides a clear way to achieve success, with each level having its own set of objectives, broader and loftier at the top, more specific and detailed as you drill down. And this same framework can be used to measure not only the projects, but the team as well.
For example, I often refer to individuals as strategic thinkers. Well, to be honest, I usually use it in the negative, as in “John’s not much of a strategic thinker.” What that means is that John understands how to get things done and might be a great tactician. He may even have the capability to see how his actions fit in the strategy. But he struggles to envision new strategies or to set broader objectives.
Similar evaluations can also be made further up the mission/vision framework. People who are imaginative strategists, but lack a broader vision, for example. We’ll talk much more about people development and evaluation in later episodes, but it’s easy to see how a clear set of terms helps not only motivate, but also evaluate your team.
As I noted in the last episode, for me, the most interesting level of this framework is the vision. I love a great mission statement, and I’ve helped to craft and fine-tune a number of them. But missions are foundational, they require a very industry-specific knowledge and they often are difficult to evaluate from afar. As such, while I might be able to help you create yours, it’s difficult for me to offer much advice in the general case.
Also, for many small organizations, the mission and vision are one and the same. For a startup, for example, the mission is simply: accomplish the first project. Sure, they might have loftier goals waiting in the wings, but for most, the first objective is the make-or-break execution of the vision for the first project.
That’s why, for me, the vision is the most crucial. It sets the goal for any given project, any given time frame. It’s the first level that requires setting specific and explicit measurable targets. And it provides the motivation for all the real work that gets done in a team.
So, next time, we’ll look at how to establish a great vision. We’ll talk through the good, the bad, and the ugly of visions. And work to help you to craft a vision that leads to that crystal-clear view.
Leading Smart is from me, Chris Williams. You can find out more about the show and discover other resources for leaders at my web site, CLWill.com. That’s C-L-W-I-L-L.com.
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That’s it for this episode. In the next episode we’ll continue our look at the importance of vision. Next we’ll explore how to create a good, clear, and measurable vision. It’s called “Mark My Words”. I hope you’ll listen. Until then, please remember that each of the several dozen decisions you make today are part of Leading Smart.