A Culture of Change | A $250M Mistake
Back in 1954, the Ford Motor company had a problem. It lacked the vehicle options that GMC and Chrysler offered in a mid-level package as outlined below:
A change in the economy, post WWII, provided the ability for many automobile owners to upgrade from their lower end vehicles; creating a demand for medium priced vehicles. Ford's competitors offered more choices, forcing even the most loyal customers to turn elsewhere for their new car.
As for Ford, they needed to “change” the way they did business to keep its customers from leaving.
What was Ford’s response?
They created a buzz about a soon to be released vehicle …the E-vehicle...which Ford based upon newly emerging, but not fully understood, Motivational Research.
Unfortunately, that vehicle turned out to be the Edsel; a 1957 vehicle based upon 1955 cultural needs & wants. They missed the bus, boat, train, flight & everything in between and spent $250M to do so. The culture of vehicle owners had changed during this time, but Ford’s did not. In other words, Ford built a car for their customers based upon their culture, not the customers'.
How did Ford fail to keep up with the market's changing demands? Ford Dealers didn't... senior executives did. Dealers, on the frontline, knew the wants & desires of the market. The "bean counters" in executive positions, not the individuals with a real pulse on the demand, created Ford's culture.
Who has the pulse on your customer base? Is it the "bean counters" in senior management as it was for Ford? Or is it your front line employees, like Ford's car dealers?
Just a little over two years later, Ford pulled the Edsel plug, with the last one rolling off the assembly line on the 20th of November 1959.
Does Ford get any credit in this fiasco…absolutely!
They were able to learn from this mistake. In doing so, changed the way they looked at vehicle owner culture, leading to the Ford Mustang. The Mustang is the most iconic, best selling sports car in American history.
As for change and those who like to beat the proverbial “we’ve been doing it that way for years” drum, I respond with a simple, “Well it’s a good thing we didn’t put you in charge of transportation, because if we did, we’d still be riding a horse”.
See you next week!