Henry Ford's Innovation Lesson

Henry Ford famously said, "If I had asked people what they wanted, they would have said faster horses." While true, Ford almost certainly had conversations with prospective customers who were clear about their daily frustrations with their transportation options.

Henry Ford didn't invent automobiles. In 1902, at least 50 US firms manufactured and sold cars mostly to wealthy customers as high end luxuries, which were generally expensive to purchase and difficult to maintain. That year, the Detroit Automobile Co. went bankrupt after selling fewer than half a dozen cars in two years, and Chief Engineer Henry Ford was fired. The Ford Motor Company was founded in 1903, but it was 1908 before the Model T was introduced.

During those five years, Ford developed an intuitive understanding that many people wanted faster horses to do practical jobs like getting to and from town quicker so more work could be done on the farm. He identified a job the car could perform for non-consumers which was fundamentally different than the job for which most early cars were being built. Rather than competing with the market leaders in automobiles, Ford was led by customers to develop a simpler, cheaper, more convenient productivity tool.

With that insight, Ford looked around for how to create a product that completely satisfied his customers needs using existing components and processes where possible. One famous innovation for which Ford is given credit, the assembly line, had actually been around for a century since Eli Whitney's cotton gin. It was William Klann, not Ford, who brought the assembly line into Ford Motor Company after viewing the "disassembly line" of a Chicago slaughterhouse and where animals were butchered as they moved along a conveyor.

Henry Ford had been up and down in the automotive industry for a long time, from which he developed a deep base of informed intuition. He had a clear insight into the needs of an emerging market of low end customers, and he was disciplined in meeting there needs with a laser like focus. He surrounded himself with talented people who were as passionate about the business as he was, and he was open to their diverse ideas from other industries about how to best develop a solution. What was most innovative about Henry Ford was not a new technology or even a new process, but a insight into the needs of a emerging market of customers for which he created a powerful, new business model.