Lee Iacocca and Ford
Whenever a book on management is written about the people who managed greatest come - backs against all odds or who shook the system from the root itself, the saga can not be complete without taking note of this hero. No, I am not talking about Bill Gates, Sabeer Bhatia or anyone related to Silicon Valley. It’s not about getting quick money through dotcoms or anything like that. This comes from the good old core manufacturing industry. He is hailed as one of the best managers of our times. He is worthy of even more appreciation because he started, basically, as one of those techno savvy engineers who are not so keen about the main action part of any company - the Sales and Marketing. Yet, he blended his engineering knowledge with creativity and management in such a way that he became living legend forever. Meet Lee Iacocca…– The former president of Ford Motor Company and later on Chairman of Chrysler Motors. Today’s Gyan is about Iacocca’s stint with Ford.
Lido Anthony Iacocca was a shy, introvert boy from Allentown. His parents had emigrated from Italy to the land of opportunities in search of their great American dream. Lido’s father – Nick Iacocca was a born salesman. Starting as a mine worker, he later on owned a movie theater and a chain of hotels. One of the tricks he used to pull crowd at his theater was the scheme of giving free tickets to the dirtiest 10 kids. I’m not sure how it worked but it did. Soon, the golden days were over as the great depression hit US in 1929. Nick promptly opened hotel. The idea was even if every industry is in slump, people will have to eat!
Lido was a bright student right from his school days. He went on to pursue his Mechanical Engineering at Lehigh University. (A senior admirer used to call him “Lee High”) In his final years, a recruiting officer from Ford names Wellington McCormick Goodheart arrived at Lehigh University for the campus recruitment. The overall impression that Goodheart left and the Ford brand name made Lido passionate about getting into Ford and as it turned out, he was the only one who could make it to Ford. After completing his Masters, he officially joined Ford in 1946 as a trainee engineer. At the River Rouge Plant – the biggest automobile plant in the world, he was made to learn each and every process (right from Mining, shipping, designing etc.) of Automobile Industry over 18 Months. He had vowed that he would become the Vice President of Ford by the age of 35. But somehow, he wasn’t satisfied with the engineering work that he was doing. The aim of becoming a VP at 35 was looking pretty distant. He observed that the main action is in the Sales and Marketing.
Finally, he switched to Sales in 1953. He tried to sell the cars on the basis that they are safe. It didn’t quite work. It was in 1956 that Lido got his first break. In 1956, he sold the cars with the punch line “56 for 56” which was an instant hit. It not only increased the sales of his district but brought him under the eyes of the “Glass House” – the headquarters of Ford Motors at Dearborn in Detroit. This was a simple installment scheme in which the customer just needs to pay $ 56 first and then rest of the amount in small installments. With the instant success of “56 for 56”, he was sent to Chester where he got his real mentor in Charlie Bicham, then a regional manager, who really molded Lee in an ideal salesman and furthermore a businessman. It was Beacham who shortened “Lido” to “Lee” as the Southerners would find Lee more American than Lido or Iacocca
Iacocca always says that the basic principle is that any man, even if he had a bad or expensive deal, for some days he tells himself that he had the best deal!
His marketing strategy revolves around facts and figures but then, there is gut instincts involved, also. According to him, you may collect 95% of the information that you require to take a decision, it may take you 6 months to get the remaining 5%. And by the time, you start to implement it; it will be too late and you would have missed the bus. It’s the internal feeling or guts that are required to compensate those 5%. About his decision making in meetings he says, “I listen to all of them and finally say “OK, Guys, here is the decision.”
He always supported front wheel drive and fuel saving vehicles against the “Gas Guzzlers” which was the last thing Henry Ford II - the Ford Chairman ever wanted. Iacocca studied the market and observed that the generation born in the years of World War II was now grown up. This young generation wants a stylish, sporty but elegant car, a car which you can drive to a party, a picnic or college and still, it shouldn’t look out of place! Iacocca came up with a car with a long hood, a powerful engine, sporty look in the year of 1964. “The Mustang” was instant success. It was so much attractive that it is said that a truck driver slammed his truck into a tree when he lost his concentration watching Mustang. Another customer slept in the car until his cheque was getting cleared so that no one else can take the car away from him. Finally, Lee did become Vice president but at the age of 36. He was just about to become the president because of Mustang but suddenly Henry Ford brought Bunkie Knudsen from General Motors to become the president. Lee missed the Presidency. But, as fate would have it, Bunkie was fired within 18 months because he couldn’t make any difference to the company’s profit.
Finally, on 10th December, 1970 Lee Iacocca became the President of Ford Motor Company. He showed the most prosperous years to the company. He brought the ailing Lincoln Mercury division back into profit. Mark III and Fiesta added more feathers to his cap. But every good thing has to end. After an attack of Angina, Henry Ford started worrying about the share of his family in the company. He was afraid of Iacocca’s increasing influence. So he blamed him of having contacts with Mafias and had his enquiry set up just to harass him. This only proved Lee’s innocence, adding more fury to Ford’s wrath. So he started firing Lee’s allies like Hal Sperlich – the man who designed Mustang, followed by Bill Winn. Finally, he called the Board’s meeting to put that he is going to fire Lee Iacocca. All the directors opposed this foolish idea. Who can fire the money maker just because of personal grudge?
“It’s either him or me!” threatened Henry. The board gave up.
In this way, on 13th July 1978, after 32 years of glorious career, Lee Iacocca was fired after a heavy confrontation with Henry Ford. Ford had just earned $1.8 Billion in two years, the best ever. After he was fired, Iacocca was given a small cubicle near the warehouse. This was the worst humiliation as Lee enjoyed white – coated waiters, food from Paris and other heavenly perks in the earlier years. Henry Ford was so whimsical that he called Walter Murphy– an Iacocca ally at 3:00 a.m. in midnight just to ask whether he likes Lee. When he said “Yes” then “you are fired” was the answer. There were doubts about his integrity as well. After talking emotionally in the meeting for Development of Black people, he would abuse, curse them when drunk at home.
If you thought this is the end of it, you are wrong. There were two options Lee had, aged 54 by now, either to enjoy a retired life or take revenge of this insult.
Watch out this space tomorrow to know what he chose!
Regards,
Abhishek
Lido Anthony Iacocca was a shy, introvert boy from Allentown. His parents had emigrated from Italy to the land of opportunities in search of their great American dream. Lido’s father – Nick Iacocca was a born salesman. Starting as a mine worker, he later on owned a movie theater and a chain of hotels. One of the tricks he used to pull crowd at his theater was the scheme of giving free tickets to the dirtiest 10 kids. I’m not sure how it worked but it did. Soon, the golden days were over as the great depression hit US in 1929. Nick promptly opened hotel. The idea was even if every industry is in slump, people will have to eat!
Lido was a bright student right from his school days. He went on to pursue his Mechanical Engineering at Lehigh University. (A senior admirer used to call him “Lee High”) In his final years, a recruiting officer from Ford names Wellington McCormick Goodheart arrived at Lehigh University for the campus recruitment. The overall impression that Goodheart left and the Ford brand name made Lido passionate about getting into Ford and as it turned out, he was the only one who could make it to Ford. After completing his Masters, he officially joined Ford in 1946 as a trainee engineer. At the River Rouge Plant – the biggest automobile plant in the world, he was made to learn each and every process (right from Mining, shipping, designing etc.) of Automobile Industry over 18 Months. He had vowed that he would become the Vice President of Ford by the age of 35. But somehow, he wasn’t satisfied with the engineering work that he was doing. The aim of becoming a VP at 35 was looking pretty distant. He observed that the main action is in the Sales and Marketing.
Finally, he switched to Sales in 1953. He tried to sell the cars on the basis that they are safe. It didn’t quite work. It was in 1956 that Lido got his first break. In 1956, he sold the cars with the punch line “56 for 56” which was an instant hit. It not only increased the sales of his district but brought him under the eyes of the “Glass House” – the headquarters of Ford Motors at Dearborn in Detroit. This was a simple installment scheme in which the customer just needs to pay $ 56 first and then rest of the amount in small installments. With the instant success of “56 for 56”, he was sent to Chester where he got his real mentor in Charlie Bicham, then a regional manager, who really molded Lee in an ideal salesman and furthermore a businessman. It was Beacham who shortened “Lido” to “Lee” as the Southerners would find Lee more American than Lido or Iacocca
Iacocca always says that the basic principle is that any man, even if he had a bad or expensive deal, for some days he tells himself that he had the best deal!
His marketing strategy revolves around facts and figures but then, there is gut instincts involved, also. According to him, you may collect 95% of the information that you require to take a decision, it may take you 6 months to get the remaining 5%. And by the time, you start to implement it; it will be too late and you would have missed the bus. It’s the internal feeling or guts that are required to compensate those 5%. About his decision making in meetings he says, “I listen to all of them and finally say “OK, Guys, here is the decision.”
He always supported front wheel drive and fuel saving vehicles against the “Gas Guzzlers” which was the last thing Henry Ford II - the Ford Chairman ever wanted. Iacocca studied the market and observed that the generation born in the years of World War II was now grown up. This young generation wants a stylish, sporty but elegant car, a car which you can drive to a party, a picnic or college and still, it shouldn’t look out of place! Iacocca came up with a car with a long hood, a powerful engine, sporty look in the year of 1964. “The Mustang” was instant success. It was so much attractive that it is said that a truck driver slammed his truck into a tree when he lost his concentration watching Mustang. Another customer slept in the car until his cheque was getting cleared so that no one else can take the car away from him. Finally, Lee did become Vice president but at the age of 36. He was just about to become the president because of Mustang but suddenly Henry Ford brought Bunkie Knudsen from General Motors to become the president. Lee missed the Presidency. But, as fate would have it, Bunkie was fired within 18 months because he couldn’t make any difference to the company’s profit.
Finally, on 10th December, 1970 Lee Iacocca became the President of Ford Motor Company. He showed the most prosperous years to the company. He brought the ailing Lincoln Mercury division back into profit. Mark III and Fiesta added more feathers to his cap. But every good thing has to end. After an attack of Angina, Henry Ford started worrying about the share of his family in the company. He was afraid of Iacocca’s increasing influence. So he blamed him of having contacts with Mafias and had his enquiry set up just to harass him. This only proved Lee’s innocence, adding more fury to Ford’s wrath. So he started firing Lee’s allies like Hal Sperlich – the man who designed Mustang, followed by Bill Winn. Finally, he called the Board’s meeting to put that he is going to fire Lee Iacocca. All the directors opposed this foolish idea. Who can fire the money maker just because of personal grudge?
“It’s either him or me!” threatened Henry. The board gave up.
In this way, on 13th July 1978, after 32 years of glorious career, Lee Iacocca was fired after a heavy confrontation with Henry Ford. Ford had just earned $1.8 Billion in two years, the best ever. After he was fired, Iacocca was given a small cubicle near the warehouse. This was the worst humiliation as Lee enjoyed white – coated waiters, food from Paris and other heavenly perks in the earlier years. Henry Ford was so whimsical that he called Walter Murphy– an Iacocca ally at 3:00 a.m. in midnight just to ask whether he likes Lee. When he said “Yes” then “you are fired” was the answer. There were doubts about his integrity as well. After talking emotionally in the meeting for Development of Black people, he would abuse, curse them when drunk at home.
If you thought this is the end of it, you are wrong. There were two options Lee had, aged 54 by now, either to enjoy a retired life or take revenge of this insult.
Watch out this space tomorrow to know what he chose!
Regards,
Abhishek
posted by Gyan for the Day! | 5:15 am
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