HOW ALBERT SLOAN USED COLLABORATION TO DEFEAT THE FORD BRAND IN 1923

HOW ALBERT SLOAN USED COLLABORATION TO DEFEAT THE FORD BRAND IN 1923

         Social media creates the wisdom of crowds.  The wisdom of crowds insulates a marketer from error. The purpose of social media is engagement. This engagement is between customer and brand.  Engagement also within the organization itself. This is why General Motors succeeded in creating a brand in 1923. It is the reason why Ford Motor Company failed. Markets change fast in a social media world. This is because there is so much scale. Social media is the tool that modern marketers use to adjust to this speed and scale. There is much material in modern business.  There is great wisdom in crowds. Alfred Sloan, the CEO of General Motors in 1923, understood this. He organized a system in which department heads had a say in how strategy would be developed. Alfred invented modern management. How he ran General Motors is a benchmark, and it is the reason why modern social media strategists should study Alfred Sloan of 1923, today. In 1923, nine out of ten cars on the road were Model T Fords. By 1926, General Motors gained the lead in market share. The reason why this happened is because Mr. Sloan created collaboration through the social media that was available to him in that era.

            In contrasting Albert Sloan and Henry Ford, and explaining why General Motors created a brand, let me quote Dr. Yogi Berra.  Yogi once said, “You can see an awful lot just by watching”.  Mr. Sloan created a brand at GM because he saw that Mr. Ford was making a significant mistake.

                   To be successful in social media marketing a professional has to be both humble and flexible. Albert Sloan of General Motors in 1923 was both of these. Henry Ford was neither and this is why his story had such a tragic ending. Henry Ford was autocratic. One man made the decisions in that company. Anyone who had an idea different than Mr. Ford’s was fired. This is why the Ford Motor Company missed the vast paradigm shifts in the American auto market in 1923.  

            Mr. Sloan was a brilliant man and the reason he was so brilliant is that he understood that he didn’t know everything. To offset this, to create policy and strategy, and to insulate himself from error, he created an executive committee in which the heads of the departments would get together and discuss things. This was the beginning of modern management. It was the beginning of modern social media. Mr. Sloan did not have Facebook or Twitter, but he used the social media of the day. He engaged his employees who had engaged their employees, who had engaged their employees. Today, people would send Mr. Sloan a wall post, or a tweet. In his day, Mr. Sloan’s Facebook page was talking to people face to face.. Mr. Sloan collaborated with his “friends”.  Issues were discussed; there was a meeting of the minds.

            From these committee meetings, Mr. Sloan realized that a strong middle class was developing in the United States. Women and African-Americans were now a significant market for a car producer. Mr. Sloan understood this through group discussion.   Mr. Ford wasn’t aware of these changes, and everyone at Ford was afraid to tell him.

            General Motors created a strong brand among women and blacks. This demographic was an important reason why General Motors became the market share leader in 1926. The committee set-up allowed Mr. Sloan to function in a world of change. Mr. Sloan made this observation about Mr. Ford, meant in honest and respectful manner. “The creator of change didn‘t realize when change had come”. Every modern social media strategist should understand how Mr. Sloan created a brand in 1923. I would like to end with a quote from Dr. Yogi Berra, “The future sure ain’t what it used to be”.

Dean Hambleton

dnhambleton@gmail