The Challenge of Change
by Dr. John C. Maxwell
The history of Henry Ford and the Model T illustrates a fundamental truth about leadership: leaders never outgrow the need to change.
On his way to dominating the automotive market with the Model T, Henry Ford embodied innovation and progress. By pioneering the assembly line, Ford slashed the amount of time needed to manufacture an automobile. He installed large conveyor belts in his factory, allowing workers to stay in one place rather than roaming around the factory floor. He also shortened the workday of his employees from nine hours to eight hours so that his factories could operate around the clock.
The efficiencies Ford introduced allowed cars to be manufactured at a fraction of their previous costs. In under a decade, automobiles went from being luxuries affordable only to the wealthiest Americans, to being standard possessions of the average American family. Ford profited handily from the popularity of the Model T, and Ford Motor Company grew into an empire.
However, the dominance of Ford Motor Company was short-lived. As competitors changed their operations to copy Ford's concepts mass production, Henry Ford made a tremendous leadership blunder. With cars rolling off assembly lines like never before, consumers began to demand a variety of colors. However, Ford stubbornly refused, uttering the famous line, "The customer can have any color he wants so long as it's black."
In Ford's mind, producing multiple colors was foolhardy since black paint dried the fastest and could be used most efficiently. Amazingly, Ford did not comprehend the human preference for variety. Customers flocked en masse to other producers who catered to their color preferences, and Ford Motor Company never regained its grip on the market. For so long, Henry Ford had focused on moving from inefficiency to efficiency that he refused to move in the opposite direction - from efficiency to inefficiency - even when doing so would have been wise and profitable. Ford's genius in sparking change had catapulted him to the pinnacle of American commerce, but later, his inability to change cost him dearly.
The Loan Company continues to adapt to our ever changing market as we have consistently generated a reasonable rate of return for our Limited Partners over the last thirty years. Unlike many of our former competitors (other private lenders), who have since gone out of business during this recession.
The distressed real estate market has generated loan opportunities for smaller residential investment properties, where in the past this was not the case. The Loan Company has taken advantage of this window of opportunity making smaller loans to experienced real estate investors.
The Loan Company is always looking for ways to improve the efficiency of its internal operations in order to stay competitive. For example, this year we centralized our loan document preparation service, Loan Broker Services, where it was previously accounted for separately from The Loan Company; this proved to be more profitable and transparent to our Limited Partners.
We are constantly looking for ways to change that are in the best interest of our Limited Partners.
