Wild times call for wild new visions. Ironically, Henry Ford would be right at home

by David Holt

Walk into the work area of a truly creative person in any field, and you will find it tends to be a bit messy—a bunch of little experiments going on at any given time. Everything solid we create was initially a speculation—a “what if.” At first there was a vague strategy or the hint of an innovation. In the real world, innovation and strategy blur together.

And we are all carried along by the broad tides of history. Consider our modern obsession: the automobile.

The industry as we know it was the invention of Henry Ford, who like all great thinkers and doers was often right and often wrong. He went bankrupt twice before he founded the Ford Motor Company and changed the world of transportation and even manufacturing. Such is the uneven, experimental nature of progress.

Amid the chaos of the first automobile manufacturers, quirky small-scale operators building unreliable machines for the wealthy, Ford borrowed concepts from everywhere, most famously the assembly line from the meat-packing industry. He also realized that if he paid his workers enough they could buy his products, and when the Depression hit he reduced costs, including wages.

In many ways he was a creature of our time. He created a complicated web of logistics to get the resources he needed to his huge factory “just in time.” His management team was intentionally “lean,” so the big decisions could be made around a table at lunch. It was all financed through retained earnings (a control freak, he had no patience for the shenanigans of the stock market).

In time his creation took over the cities, which became linked by great highway systems. The petroleum industry expanded to feed this endless thirst. Japanese car companies borrowed from the playbook of Edward Demming, the American statistician and management theorist who invented the “quality” movement but was largely ignored in his own land. Heeding Demming, the Japanese operated with more nimble labour contracts and a strong commitment to innovation and continuous improvement.

But like all success stories, untrammeled efficiency creates its own undoing. According to The Economist, by the 2000s the global automobile industry was producing 25% more vehicles than
the market could absorb, prompting mergers, acquisitions, and the potential bankruptcy of such industry giants as GM. This was all part of a broad but reckless strategy, one that just sort of happened: the hydrocarbon economy. Global warming from burning fossil fuels threatens the whole enterprise.

Henry Ford’s strategies and innovations had become so operationally effective and successful that few recalled that they began as speculations—with a lot of trial and error. When industries are at their peak, it is hard to remember the combination of creativity and pragmatism that created them.

Today there is a groundswell of innovation that is trying to reinvent the automobile within a new context. Strategy is once again front and centre. Engineers are re-examining even the concept of the car. The goals are to reduce energy consumption and pollution and to unclog the streets and roadways.

Some European cities, in particular, have taken the strategic stance of encouraging the use of bicycles and mass transit—putting the car in its place, so to speak. Meanwhile, as governments try to negotiate limits on the carbon economy, the automobile still plays a starring role. This, even as booming China is just beginning to discover the freedom of the open road.

When business is successful, operations and processes take over. The irony is that when industries are humming at peak efficiency, we are no longer conscious of their origins—the experimental processes of strategy and innovation that created them. This lack of awareness is a blind spot, an eventual weakness.

In recent months, the apparent stability of the global economy has come apart. Basic assumptions are being questioned. Processes we relied on no longer work. Obviously, some large but unseen forces have been in play for some time, but we did not see them. 

When crunch time happens, a higher awareness is brought into play; we are forced to wake up and re-examine how we look at the world. This is the arena of strategy and innovation, uncomfortable as some of it may be. When the way forward is unclear new experiments are needed. Henry Ford, where are you?

During stable times, we think we have it all figured out. Yet in the biological world, nothing is fixed, as Darwin pointed out in The Origin of Species 150 years ago. Every species and every individual is an experiment, competing for resources in a dynamic world. Similarly, the concepts we call strategy and innovation are experimental—well-intentioned designs that can only be proven or disproven in the doing.

At any given time, strategy and innovation are minor actors in human affairs if you measure them by activity or resources consumed. Most of our attention goes to operations—to tending and improving the systems and technologies already invented.

As consumers and businesspeople, we like our products shiny and our systems seamless. This scrubbing and polishing is important, but by the time they happen, the strategists and innovators have left the building.

David Holt is a writer and consultant on strategy and communications. He can be reached at dholt@eastlink.ca.