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 »  Home  »  Business & Finance  »  Henry Ford's Idea
Henry Ford's Idea
By Gordon Newman | Published  12/20/2009 | Business & Finance | Rating:
Gordon Newman
Gordon J. H. Newman, CPT - Gordon is President of The Newman Learning Group Inc. an organization dedicated to providing value add learning and development solutions to improve the bottom line performance of organizations and individuals.  Gordon may be reached at or 905-790-2944 or

Gordon's recently published book There Has To Be A Better Way can be purchased on-line. 

View all articles by Gordon Newman
Brampton - Henry Ford is purported to have offered $25,000 to anyone who could show him how to save a bolt on a car.  Considering wages when Henry made that offer, the amount was an astronomical sum.  Discount the dollar figure for a minute and let's look at the philosophy behind the offer.

First, Ford recognized a key fact; people doing the job probably know better than anyone else how to improve their tasks.  Some will argue that this is fine if you are in the manufacturing industry.  However, those who do not manufacture things, often comment that they do not have a process that could be improved by such an offer.

The truth be known, everything that is made/every service provided follows a very basic model:

Input →Process → Output

The input, raw material may take the form of steel, rubber, glass, needed to build a vehicle.  The input could be data / knowledge used to process a financial transaction or answer questions at a hotel registration desk.  The common fact; everything requires input to start the process.In some instances that input can be a complaint from a dissatisfied client.

In manufacturing putting all the component materials together to form a product is the process.  In our other two examples, the application of regulations, guidelines and perhaps some paper or electronic form to the information shapes the output or result of the interaction.

Clearly in a manufacturing operation it is easy to identify the output from the process, the visible product that one can see, feel, touch and perhaps smell or even hear.  However, in a non-manufacturing environment the output may be less tangible.It could be the response to a customer's inquiry.  It may even be a change in someone, such as skill development.  Not easily seen but output just the same.

Secondly Henry recognized it is necessary to spend money to make and/or save money with any process.  Henry was offering a large sum of money for one small change.Consider that one small change multiplied by the number of times it would reoccur and you have savings in production costs far exceeding the incentive offered.

In today's economic climate many businesses are cutting back on incentives to improve their product / service.  However, those that are forging ahead with continuous improvement programs are saving more than enough to cover the cost of their programs.  As a result they are reaping benefits that will allow them to ride out this economic cycle.

Are you using the knowledge of your employees to improve your efficiency and effectiveness?  If not, what are you going to do about it?No doubt you still want your organization to be around after these hard times have passed us by.

Copyright: Gordon J. H. Newman, CPT

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