Well Made in America: Lessons from Harley-Davidson on Being the Best, gives an excellent case view of Davidson-Harley (HD), the motorcycle company which at one point was in the verge of collapse due to outdated bureaucracies and business practices.
Reid gives a good analogy of what befell the company plus the steps that were taken to salvage it. The book gives a detailed account by using examples of how the 13 managers formerly of the Harley part of the business acted swiftly to restore the company back to its level of performance and market dominance.
From the $83 debt to a star in the current global business platform, taking a notable leading role under stiff competition. This is the kind competition that the managers had to overcome during the period of trouble. A perfect example for managers facing the same situation to draw from, the book contains valuable, real life lessons not only for managers but everyone in general life and career as well.
The firm was founded in 1903 and was owned by a family firm before selling it in 1969 to AMF, a conglomerate that no longer exists in business at present. By 1981, things were so bad for the motorcycle company and it is then that 13 managers of Harley-Davidson acquired it fully from AMF.
By this time, several companies mainly Japanese were gaining ground of the domestic market. Some of these companies included Kawasaki, Honda and other foreign competitors whose products were comparatively better off for the market compared to those of the then dominating Harley-Davidson. The market share dropped sharply with as many as half of the bikes getting out of the production lines having many parts missing thus making it hard for dealers who were forced to have the parts fixed by themselves before being sold out.
Definitely this transcended down to customers in one way or another considering that fixation of parts by dealers and not the manufacturing company would have compromised standards quite easily. The Japanese were gradually gaining growth and it became hard to match them under these circumstances. Nevertheless, the fans of Harley-Davidson continued to maintain their royalty but most consumers did not care much and all they wanted was quality which after all was already being offered by the Japanese manufacturers.
It certainly became clear that if the company had to maintain its business and continue to get hold of the market, then it had to improve the quality of its products, match that of the competitors or surpass it at best. There being no many alternatives to explore other than drastic changes, the company finally acted in 1975 by putting Vaughn Beals in charge of the company. He had an enormous task of transforming the company in order to get it back to its feet (Reid, 1991).
Working closely with the chief engineer Bluestein, Beals moved quickly to have things corrected by implementing several strategies. He executed a program specifically for quality control and inspection. Though at a huge cost, these measures were necessary for the elimination of the company’s problems that had worsened deeply. This involved extra spending of up to $1000 per bike in design reformation. Power plants then in existence were given a boost through improvement with an aim to compete with the efficient, high performance Japanese models.
Managers at the top level got organized and took part in a long-term strategy for new, improved products that would meet the dynamic needs of the market in the future. Reid points out that this was surprisingly the first time the company ever took a chance to look critically into the future in an effort to predict and analyze market behavior. Noise and rules of emission took top priority with possibilities of better performance engines that would respond to the effects of noise and emissions being explored.
In the meantime, the company’s vice president, William G. Davidson had a new model created-the super Glide. This model imitated the Harley fanatics’ choppers which they had in their garages. This was achieved by combining the sporter and the Glide touring, the heavy one. Next, in quick succession were custom engineered cruiser models like the Wide Glide and Low Rider.
However, this was before the other 12 managers had come in and the company still continued to experience a dwindling market share as the competition from Japanese makers intensified. The book indicates that the miracle for the company started when the managers together with Beals paid a visit to the assembly plant belonging to Honda in Marysville, Ohio. They got a chance to understand the operations of the Japanese company by having a ground observation. This gave them the much needed insight.
It was a golden opportunity like no other. They discovered that the secret lied in management and paying undivided attention to detail, high end professionalism. Immediately the managers got down to work first by implementing a pilot system at the engine plant in Milwaukee which succeeded and showed remarkable improvement within a reasonable period of implementation (Reid, 1991).
The book has indeed demonstrated how the company manages to come from rabbles through implementation of new strategies without which the story would have been different today. The drastic measures taken by the new managers are excellent in application and they ultimately come out as unique.
When competition is stiff, it takes a swallow of pride for a defeated leader to seek example from the fiercest competitor in the market and when it happens, it is with a taste of pain but which must be borne by the victims. This is what the Davidson managers undertook in a rare demonstration of courage and determination to succeed. It is always one thing to learn a lesson in business and another to apply it successfully.
The managers passed this test by applying the lessons almost immediately with vigor. Normally, it takes time for managers to believe that a certain way of doing things will work for them and go a head to apply it. This is exactly what the managers did and the results were positive by any measure. Reid shows how the company for example started recognizing employees and involving them in every part of the business especially in the important aspect of planning and detailed analysis.
This entailed engaging them in discussions over the application of the new approaches by explaining to ensure all understood and agreed. After two months of intensive meetings, the employees were well conversant and did accept the changes. Amazingly, the changes were executed on a Monday while the consensus was struck on a Friday. This is another sign of determination and the burning desire to have the company running.
Such a move would be agreeable in any circumstance because it is always a good business practice to execute any measure as soon as it is possible to do so. Time is a factor in implementing any critical decision in management and this is what the managers obeyed. They wasted no time, a characteristic of effective management by the Harley managers.
The other numerous subsequent steps taken by the managers are equally plausible. A good example is the enormous spending they invested in developing warm relationship with their dealers. By recognizing that their dealers are an important component of their business, the managers did acknowledge the fact that no matter what quality of product a company produces, dealers must be valued.
If the dealers present a good image through the services they offer to their customers, then the overall image of the company gets in good shape and every quality product that comes out of the company gets highly appreciated. But dealers cannot achieve this alone in as much as they equally want to make the most out of the business if they cannot be mutually supported by the parent company. The managers of Harley noticed this and executed it admirably as one of their improvement measures.
One lesson that can be learned from this company is that the success of any organization or company in business is purely a subject of management. If management fails, the employees are rendered weak and this reflects in what they produce. Effective management will sometimes involve very drastic, painful changes that must be put in place. With proper execution, these changes are the secret to a success story that lives on to be told for years on like this of Harley-Davidson.
In conclusion, the book succeeds in bringing into perspective what managers need in the current world when business dwindles and the market share is threatened. The author achieves the valuable element of illustration by example. The instances he uses at different times of the company’s struggles are effective tools of relaying the message to stakeholders in different industries.
Managers from different spheres of business can find the David-Harley story a challenging business case that continues to act as one of the best points of reference whenever companies face similar challenges. In a world of stiff competition and challenges, it is a great example to draw from for everyone in business, general life and career. That when something goes terribly wrong, it can still be salvaged to go magnificently right.
Reid, C. R (1991) Well Made in America: Lessons from Harley-Davidson on Being the Best. New York: McGraw-Hill, 1991.