Peter Drucker tells a story of contrasts between Honda Motor Company founder Soichiro Honda and Ford Motor Company founder Henry Ford.
When Soichiro Honda decided to open his small business in the toughest of business environments after Japan’s defeat in World War II, he did not start his company until he found the right man to be his partner and run the non-engineering parts of the company; administration, finance, distribution, marketing, sales and personnel. Honda was smart enough to know that his talents belonged only in engineering and production. That key delegation decision made the Honda Motor Company what it is today.
Contrast that outcome with an earlier example; that of Henry Ford. According to Drucker, when Ford decided to go into business for himself, he first did exactly what Soichiro did forty years later. Before starting the Ford Motor Company, he found his man–James Couzens–to run administration, finance, distribution, marketing, sales and personnel. Like Honda, Henry Ford knew that he belonged in engineering and manufacturing. For fourteen years, James Couzens worked along side Henry Ford to build up the company. It was Couzens, not Ford who implemented some of the best-known policies and practices; the famous five-dollar-a-day wage of 1913 along with Ford’s pioneering distribution and services policies. And it was Couzens who pushed these policies through despite the resistance of Henry Ford. These policies became so effective that, in the end, Henry Ford became increasingly jealous of Couzens. Fourteen years after Couzens partnered Henry Ford to build one of the great manufacturing companies of all-time, he was forced out of the company. The last straw, according to Drucker, was Couzens’ insistence that the Model T was obsolescent and his proposal to use some of the huge profits of the company to start work on a successor.
“The Ford Motor Company grew and prospered to the very day of Couzens’ resignation. Within a few short months thereafter, as soon as Henry Ford had taken every single top management function into his own hands, forgetting what he had known earlier where he belonged, The Ford Motor Company began its long decline. Henry Ford clung to the Model T for a full ten years, until it had become literally unsalable. And the company’s decline was not reversed until thirty years after Couzens’ dismissal when, with his grandfather dying, a very young Henry Ford II took over the practically bankrupt business.”
Here’s the takeaway: The question of ‘where do I belong?” needs to be answered well before the first signs of success occur for any start-up. If you’re smart, you’ll follow the path of Soichiro Honda and not that of Henry Ford.
