The industrial revolution icon Ford turns to a post-industrial business model.
In the early 1900s, the Ford motor company was once one of the leaders of the industrial revolution. They demonstrated how a well planned production process could lead to the mass consumption of a physical product. The business model of the industrial age was to produce more, reduce costs, and sell more. Who would have thought that 110 years later that business model could be itself in need for a revolution. This is why the news of Ford launching car sharing services is so symbolic. They aren’t going to give up the production, dealerships are still going to lease cars, but they will add a third means of engaging with their brand and value proposition. Maybe the takeaway from this change isn’t that the industrial business model is dead, but that running a single business model won’t allow a transition into the next century.
Now this idea of running multiple business models is not new. I read about it in one of my favorite HBR article called Two routes to resilience. They report on how Xerox didn’t shift over night from selling photocopiers solutions to providing document management services. In light of all this I believe that the central challenge is to accept that the industrial business model has its limits and therefore companies need to start building their future business model today!
Questions remain. It’s great that vertically integrated companies (Ford, Xerox, Apple, IKEA) could pull all the strings to move from industrial models towards more sustainable business models, but what about the mid-sized manufacturing company that relies on a distribution chain? How can they change the relationship with their client base? Or inversely, what will be the role of the retailers who buy from thousands of manufacturers? How can they modify their relationship with their suppliers and their clients at the same time?
This is a historical review of how car products evolved from their mechanistic functions to answer more emotional and social requirements. Imagine by analogy the same level of change for business models.
This is a fun graphic design exercise that can help envision the future of a brand by visually hinting to potential transformations.