5 Business Decisions That Changed the World as We Know It
A global marketing head of a multinational consumer bank once said to me: “If you’re looking for innovation, you’re looking at the wrong industry.” Indeed, banking or even business, in general, are known for conservative decisions, relentlessly focused on eliminating risks to their bottom line with the end view of securing long-term profit for shareholders. Whew, what a mouthful!
Fortunately for us, there were men who dared to break the mold, and as a result, changed the course of business history.
According to Verne Harnish, author of The Greatest Business Decisions of All Time, top of the list would be the moment Henry Ford, founder of Ford Motor Company, decided to double his workers’ wages even as he reduced their hours.
It was 1914 and Ford was running his company against a backdrop of widespread unemployment and yet he was struggling with a very high turnover of 370 percent. To boost employee morale and keep them from leaving, Ford announced they would pay male factory workers a minimum wage of $5 per eight-hour day (the policy was adopted for female workers two years later), nearly double the previous rate of $2.34 for nine hours’ work.
History tells us it turned out to be a stroke of brilliance. Turnover dropped to 16 percent, and productivity went up to as high as 70 percent in one year. In an interview with The New York Times’ Edward Peter Garrett, Ford explained his ground-breaking decision. “If the floor sweeper’s heart is in his job, he can save us five dollars a day by picking up small tools instead of sweeping them out.”
In the 1926 book Today and Tomorrow, Ford wrote: “The owner, the employees, and the buying public are all one and the same, and unless an industry can so manage itself as to keep wages high and prices low it destroys itself, for
And that’s exactly what happened, as Ford employees began buying the cars they made. 1914 was a record year in sales, so was 1915 and by 1920, Ford was selling a million cars a year. Yes, there were many naysayers during that time and even after but guess what? Every other car company eventually adopted Ford’s wage standard.
When we enter buildings anywhere in the world, we take for granted that an elevator can sprint us to the top. But back in 1854, riding in an elevator was
Otis liked to tinker and had invented a number of things but his company was not doing well. He had invented a safety elevator but did not think much of it. Fortunately for him, great showman P.T. Barnum did.
Barnum hired Otis to perform at the Exhibition of the Industry of All Nations in New York. With hundreds gathered at the New York Crystal Palace, Otis made a show of riding a 50-foot elevator all the way to the top and then cut the cable. The crowd was shocked, waiting for Otis to plummet to this death but the elevator stayed in place thanks to a pair of hidden leaf springs that engaged the rails, keeping the elevator in place.
Otis had to perform the same stunt several times a day for a whole month until he got his first elevator order. Today, there are at least 2.5 million Otis elevators in operation, and they continue to dominate the industry that Elisha’s circus act created.
Soon after its incorporation in 1967, Southwest Airlines was trying to launch itself and failing due to protracted legal battles with larger and more established airlines. Every time it would get a green light, another bit of red tape would reel it back in. Finally, in 1971, it offered its maiden flight between Houston and Dallas at a record low $10 and introduced the idea of low-cost airfares to flying passengers. At the time, there was no such thing as a low-cost airline in the U.S.
According to the company website, Rollin King and Herb Kelleher wanted to start a different kind of airline with one simple notion: “If you get your passengers to their destinations when they want to get there, on time, at the lowest possible fares, and make darn sure they have a good time doing it, people will fly your airline.”
In just two years, the company made
Today, Southwest Airlines boasts of having the fourth-largest fleet in the world. This year, they ranked #8 among Fortune’s Top 10 World's Most Admired
In 1995, Amazon officially opened for business as an online bookseller. Jeff Bezos left his career as a hedge fund manager to launch the online shopping site from his home garage. He initially toyed with the idea of calling it Cadabra (as in abracadabra) but decided against it when someone mistakenly heard the name as ‘cadaver.’ In just one month, Amazon had shipped books to all 50 U.S. states and to 45 countries.
Before Bezos, bookworms around the world actually had to leave their homes and go to a brick and mortar store, browse bookshelves, scan a few pages before making a purchase. Now the world’s richest man with a 12-figure net worth, Bezos changed the way books are bought and enjoyed with Amazon the website and its electronic book platform, the Kindle.
Bezos shared the genius behind his start-up decision with Business Insider’s Mathias Döpfner: “I picked books because there were more items in the book category than in any other category. There were 3 million in 1994 when I was pulling this idea together—3 million different books active in print at any given time. The largest physical bookstores only had about 150,000 different titles. And so I could see how you could make a bookstore online with
Amazon, as we know it today, is no longer just earth’s biggest bookstore, but the globe’s largest retailer. You can find nearly anything on it – from shoes to groceries to live ladybugs.
When you have two technology entrepreneurs, overnight millionaires after selling their start-ups to eBay and Akamai Technologies, stranded and could not get a ride in Paris, don’t expect them to take it sitting down.
According to Investopedia.com, rumor has it that when Travis Kalanick and Garrett Camp could not get a cab back in 2008, they thought of a timeshare limousine service that could be ordered via an app. That idea stuck with Camp who pursued it and two years later, decided to test Ubercab.com in New York using only three cars. The ease of getting a ride fuelled Uber’s popularity and soon it spread to many more cities and states in the U.S., later crossing seas and launching in Paris, then China until it became a global service company.
But what makes the Uber success story even more interesting is that this ride-hailing app that offers transportation service to global commuters does not own a single car. If you’ve yet to try an Uber, here’s all you need to know: download the App, sign up with your mobile phone number and email, activate location services on your phone, and you’re good to go. With one tap, you could book a ride anywhere.
Uber is not yet 10 years old but it is already a billion-dollar franchise and has changed the landscape of transportation across the globe. It has been plagued with controversies since it was