Tuesday, March 7, 2017

No business can succeed unless it is constantly revising its product...

Here's another example of the importance of companies needing to continually innovate, and be willing to invent something that will upend a current successful product when the future is going to require something new (think Apple with the iPhone upending the iPod, Netflix with streaming upending DVD-by-mail, Amazon with Kindle and AWS to an extent, and others in more recent times). In this case, it was the tire business back in the early 20th century. From Men and Rubber: The Story of Business:
The easy course was to take for granted that, having established a fair solid-tire business, that business would expand and continue, and there would be no need to go into new fields. But the gasoline car was developing rapidly—although only Mr. Ford at that time had any notion that the automobile would be what it is today. It seemed to me inevitable that the automobile would come into wide use. That would mean an enormous tire requirement, and these tires would be pneumatics. By no means all our stockholders agreed with me, and one man holding a large block of stock disagreed in so personal a way that I had to arrange to buy out his stock. I saw clearly that, if we limited ourselves to solid tires, our business would slowly die. No business can succeed unless it is constantly revising its product, not only to meet the actual demands of today, but also the potential demands of tomorrow.  
A product can never really be standardized—that is not in the nature of things. The real point is that changes should not be made lightly or for catch-penny purposes. They should be made only to improve convenience or durability or appearance. Some changes may be made in the interests of more economical manufacturing, but this is dangerous ground, for it may lead one into thinking more of the factory than of the public.