My Life and Work by Henry Ford - Summary
Below you find my notes of Henry Ford's book: My Life and Work.
- The beginning of business
- What I learned about business
- Starting the real business
- The secret of manufacturing and serving
- Getting into production
- Machines and men
- The terror of the machine
- Why not always have good business?
- How cheaply can things be made?
- Money and goods
- Money - Master or servant
- Why be poor?
- The tractor and power farming
- Why charity
- The railroads
- Things in general
- Democracy and industry
- What we may expect
- Business choosing its customer is bad for business. Businesses should compete to get customers to improve service.
It is the function of business to produce for consumption and not for money or speculation. Producing for consumption implies that the quality of the article produced will be high and that the price will be low—that the article be one which serves the people and not merely the producer. If the money feature is twisted out of its proper perspective, then the production will be twisted to serve the producer. The producer depends for his prosperity upon serving the people. He may get by for a while serving himself, but if he does, it will be purely accidental, and when the people wake up to the fact that they are not being served, the end of that producer is in sight.
Money comes naturally as the result of service.
- Limit outside dependencies and improve manufacturing to reduce risks and costs.
- Embrace failure and learn from it which is also talked about in The law of success.
- Foster competition.
- Service before profits.
- Don't buy goods and sell them higher. Buy them fairly and with little cost improve them and sell them at a reasonable price.
¶The beginning of business
- No work is hard if you are interested in it.
- Having friends and family believing in oneself helps a lot.
- Experts only know the limitations of a subject. They don't think of any other use cases where an idea could thrive. They lack imagination.
¶What I learned about business
- Significant other behind one's back even though someone quits their job
- Money is worth nothing. Only worth as much to buy tools as it doesn't do anything on its own.
- Refinancing: sending good money after bad money
- Refinancing often necessary because of bad management
- The only foundation of real business is service
- Business men go down because they like the old ways so much that they don't want to change
- There are always people who want to buy for good service and a fair price. Focusing on competition is nothing less than a distraction.
- Not placing money before service
- Money before work brings fear or failure, being afraid of competition or being afraid of change
- Do work in the best possible way
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¶Starting the real business
Emphasized manufacturing points:
A good machine of any kind ought to last as long as a good watch.
Building products for the sake of releasing something new every year is bad service. Strive to build the best product in the first hand by making parts interchangeable for future updates.
Pay highest salaries for highest service
¶The secret of manufacturing and serving
Don't change a good product for the sake of changing if only 5% of the customers complain about something like style.
Nobody has the right to say "I built this business" if it has required the help of a 1000 workers
¶Getting into production
The product pays the wages, the management employer only handles the money
As soon as someone goes in the "expert" state of mind, people start thinking that something is impossible. this is a no-go as an employee.
¶Machines and men
No titles in an organization as they restrict one to one's own matters exclusively.
Every person has more than enough work so no unproductive tasks exist to fill the time.
Titles result in:
This man has nothing to do but regard himself as important and all others as inferior.
Responsibility gets lost in subdividing departments and the granting of specific titles.
Oh, that doesn't come under our department. Department X, 100 miles away, has that in charge.
Don't care about a person's history. New employees start at the bottom so no credentials needed. Just the desire to work has to be there.
Having a work culture in which good work has to be seen to be recognized causes bad work when work isn't seen. Work before personal advancement.
Let the worker find his work and not find the position (title) he wants
Everything can always be done better than it is being done.
¶The terror of the machine
- Not everyone hates monotony
- Only people who suggest to be assigned to a different job because of monotony should be switched
- Partnership between employer and employee
- Pay best wages so that the employee's ambition is to make this possible
How can this industry be made safe and profitable, so that it will be able to provide a sure and comfortable living for all of us?
In a partnership of skilled management and honest labour, it is the workman who makes high wages possible
- Wages are partnership distributions
- A low wage business is always insecure
A man who is living aright will do his work aright.
Paying good wages is the most profitable way of doing business
¶Why not always have good business?
There is no bad or good business. There is only bad manufacturing or bad financing.
Pay workers on the basis of work
Purpose of an enterprise: create ever increasingly better product at an ever decreasing price and paying ever increasing wages
Prices to high and consumers don't have money to pay: Whose fault is it? If there is no business, the manufacturer has to go out of business.
Instead of decreasing wages, rather tackle the real problem by reducing profits now while getting a better return in the future.
Rather take less profit and keep business moving than keep stock at high prices and bar the progress of a community. A person like that is an asset to a town.
¶How cheaply can things be made?
- Consumption varies to the price and quality
- Buying ahead of requirements does not pay. It's a guessing game not worthwhile.
Do not buy less if the price be high and we do not buy more if the price be low
- Start at the price the buyer is willing to pay and work your way back to manufacturing to make this price possible.
¶Money and goods
Don't spend too much time with finance but rather on your product
Reducing prices doesn't not imply less income. It assume the same amount is sold.
Uninterrupted service is key to keep skilled workers
¶Money - Master or servant
- Be lean to avoid boring money
¶Why be poor?
- Production is so inefficient that it hinders the fair distribution of wealth
The cure of poverty is not in personal economy but in better production.
- Saving instead of investing in one-self deprives one from someone's future true value. It reduces future income. (Note: Interested in economics? Read Howard Mark's "Mastering the market cycle".)
Money has no more value than the people put into it by production. It can be so superstitiously worshipped as a substitute for real wealth as to destroy its value altogether.
¶The tractor and power farming
- 25% down payment
- Even in war reasonable prices of machinery
Professional charity is bad
Self-reliance is key
Philanthropy has to be productive
"universal training" in economic facts for everyone
The habit of failure is purely mental and is the mother of fear.
There is a difference between being beaten or failing in an endeavour.
Success is always hard
- Reduce internal legal costs
- Break up internal titles
- Foster internal economic thinking
¶Things in general
- Believe that all things are possible
- Learn out of failures
- An educated man is someone who doesn't just carry a few dates in his mind but someone who can accomplish something
- True education is learned through the discipline of life
- There are fashions in knowledge too.
Great piles of knowledge in the head are not the same as mental activity. A man may be very learned and very useless. And then again, a man may be unlearned and very useful.
¶Democracy and industry
- Public (consumer) pays for all mismanagement
¶What we may expect
- Hoarding money is a fools errand for accumulating power
- Transferring money from the rich to the poor doesn't help it
- Business exists for service
- Service comes before profit
Everything is possible ... "faith is the substance of things hoped for, the evidence of things not seen."