Innovation
When I think of innovation I think of leaders who have changed the business landscape forever.
Henry Ford envisioned and created the modern assembly line, which drove the cost of an automobile down to the point where almost every family in America could afford one.
Actually, he invented the assembly line because he concluded that he could sell a lot of cars at a price point of $500. Mass production was the result,
not the cause, of his low prices.
Ford emphasized this point repeatedly, but a nation of product-oriented business managers refuses to hear the great lesson he taught.
Ford said, "Our policy is to reduce the price, extend the operations, and improve the article. You will notice that the reduction of price comes first. We have never considered any costs as fixed. Therefore we first reduce the price to the point where we believe more sales will result. Then we go ahead and try to make the prices. We do not bother about the costs. The new price forces the costs down. The more usual way is to take the costs and then determine the price; and although that method may be scientific in the narrow sense, it is not scientific in the broad sense, because what earthly use is it to know the cost if it tells you that you cannot manufacture at a price at which the article can be sold? But more to the point is the fact, that although one may calculate what a cost is, and of course all of our costs are carefully calculated, no one knows what a cost ought to be. One of the ways of discovering...is to name a price so low as to force everybody in the place to the highest point of efficiency. The low price makes everybody dig for profits. We make more discoveries concerning manufacturing and selling under this forced method than by any other method of leisurely investigation."
As Ford stated sometimes we don't know what we are capable of until we force ourselves to try.
For you and your business, it may not necessarily be about price. Perhaps it is about service. Decide to stretch your business goals and make a commitment to get there.
Be better at something than anyone else. Deliver faster! Make it cheaper! Improve quality! Devise new features!
Force your business to be better!
Henry Ford envisioned and created the modern assembly line, which drove the cost of an automobile down to the point where almost every family in America could afford one.
Actually, he invented the assembly line because he concluded that he could sell a lot of cars at a price point of $500. Mass production was the result,
not the cause, of his low prices.
Ford emphasized this point repeatedly, but a nation of product-oriented business managers refuses to hear the great lesson he taught.
Ford said, "Our policy is to reduce the price, extend the operations, and improve the article. You will notice that the reduction of price comes first. We have never considered any costs as fixed. Therefore we first reduce the price to the point where we believe more sales will result. Then we go ahead and try to make the prices. We do not bother about the costs. The new price forces the costs down. The more usual way is to take the costs and then determine the price; and although that method may be scientific in the narrow sense, it is not scientific in the broad sense, because what earthly use is it to know the cost if it tells you that you cannot manufacture at a price at which the article can be sold? But more to the point is the fact, that although one may calculate what a cost is, and of course all of our costs are carefully calculated, no one knows what a cost ought to be. One of the ways of discovering...is to name a price so low as to force everybody in the place to the highest point of efficiency. The low price makes everybody dig for profits. We make more discoveries concerning manufacturing and selling under this forced method than by any other method of leisurely investigation."
As Ford stated sometimes we don't know what we are capable of until we force ourselves to try.
For you and your business, it may not necessarily be about price. Perhaps it is about service. Decide to stretch your business goals and make a commitment to get there.
Be better at something than anyone else. Deliver faster! Make it cheaper! Improve quality! Devise new features!
Force your business to be better!