Lead In 30 Podcast

Henry Ford vs Thomas Edison: The Birth of Two Leadership Styles

• Russ Hill

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It was the dawn of the American industrial and innovation boom. The corporation was on the rise. Individual craftsmen were joining teams as the marketplace transformed overnight. It was in this moment that two different forms of leadership emerged. One came from Thomas Edison. The other came from his employee Henry Ford.

In this episode I share with you some of the fascinating research we've done into the birth of modern leadership modes and the benefits and costs of the two dominant modes. Which one do you lean towards and why does it matter? 

Let's dig into it in this episode of the Lead In 30 Podcast!

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Speaker 1:

They couldn't have managed people or even their own schedules more differently. Henry Ford and Thomas Edison Did you know? These two guys were friends Like. We are so deep in researching this right now for our next book. It's fascinating, unbelievable. I can't believe what we've uncovered. Each one of these two guys, these two friends, had very different styles. You lean toward one of them. Guys, these two friends had very different styles. You lean toward one of them, and why does it matter?

Speaker 1:

This is the Lead in 30 podcast with Russ Hill. You cannot be serious. Strengthen your ability to lead in less than 30 minutes. Menlo Park and Detroit. Menlo Park and Detroit. Minlow Park and Detroit. Those are the two locations that I'm going to take you to, the two scenes, the two settings for this episode of the podcast, and you're going to be, your mind's going to be blown Like. You got to just hang with me for five or 10 minutes, cause what I'm going to dig into is just. It's just insane, it's crazy. It's going to be right now.

Speaker 1:

It is my favorite chapter of our upcoming book that's coming out in the uh in the first part of next year, 2025, at the time I'm recording this and it's going to be our best book ever. It's unbelievable, and um, and and so in you, you know where Detroit is, obviously, and you know which one of these two guys worked in Detroit? Right, obviously Henry Ford. And wait until I throw you at some of these stats. Yeah, and the. We got a hold of the first Ford employee um handbook. Yeah, we've got it like physical printed. It's unreal. 19, like 1915, I think, is when it came out. It's going to blow your mind. The investigators, yeah, no, for real. Yep, the Henry Ford had an investigation team it's talked about in. They came to your house. What were they looking for? You're going to find out in this episode. So in Detroit is Henry Ford, right, ford motor company.

Speaker 1:

Where's Menlo park? I bet most of you don't even know where, what state Menlo park is in. So you know where New Jersey is, just on the other side of the river, right? So you've got Manhattan, new York city, and a lot of times if you have, if you do business in new york, like I'm flying to new york tomorrow at the time I'm recording this so, um, and you've got all the three different airports which are jfk. You've got um, why am I blanking? You've got jfk, you've got whatever the other one is I keep thinking, dull is that it's not, dull is, uh, la guardia, you gotGuardia and then you've got Newark, and so Newark's, on the other side of the river, right near Newark, is a Menlo Park, and Menlo Park, new Jersey, is where Thomas Edison worked and we're we're going to get into into into his. It's just fascinating.

Speaker 1:

Had no idea. Like Manhattan owes like everything so much to not everything but a lot to Thomas Edison. I had no idea. Like Manhattan owes like everything so much to not everything but a lot to Thomas Edison. I had no idea, and so we're going to get into that, these two guys who were friends.

Speaker 1:

In fact, henry Ford was an employee of Thomas Edison. Did you know that? I had no idea? Yeah, he worked for Thomas Edison for nine years and he didn't interact with him every day. He worked for one of his companies. Did you know Thomas Edison had like a gazillion companies? Yeah, everything from rechargeable batteries that's.

Speaker 1:

He invented that. He invented the phonograph, which is like the record player, the precursor to the record player. Which was the difference between it and the record player? Was it recorded the record, the phonograph, right, the first time that sounds were recorded and the first thing they ever recorded was Mary had a Little Lamb, the song. And so Thomas Edison's inventing that. He's inventing, obviously, incandescent light bulb. He's inventing the power grid, the first electric company, commercial electric company, thomas Edison. Edison invented, like he's got company after company after company after company. He's got all these different companies and then he's developing patents and licenses and so power companies are firing up around the around the country. This is back at the late 1800s, early 1900s and they're licensing Thomas Edison. So he's working out of Menlo Park. And and they're licensing Thomas Edison, so he's working out of Menlo Park.

Speaker 1:

And in this episode I'm going to dissect, go through their two different leadership styles and I honestly, I've spent more hours than I can count in in all of my off hours. This is what I'm geeking out on when I'm, when I'm not with clients and not working with our, our team, and I'm just digging through and digging through and digging through and ordering this book and going to that rare collector and searching through this academic library. And just because I want. This was the age you all.

Speaker 1:

This was the period where the individual contributor became a member of a team, like everyone, just worked on their own. You were a craftsman. You knew how to do this, you knew how to do this, you knew how to do that, and it was a craftsman at that time because women weren't in the workforce as much at that point as we all know from history and um. And so you just kind of trained yourself or you got educated, um, however, you got educated from your dad or your buddy or your neighbor or the guy down the street or whomever. You built up these skills and then you went out and you marketed yourself to somebody, somewhere, right, working, working somewhere. And and then now these organizations, these companies, these corporations started to be founded in late 1800s, early 1900s. And so this is the explosion, the growth of the corporation, the size of the firm, as they call it.

Speaker 1:

We talked about this in our last book, the Great Resignation, where we geeked out on data there too, and the individual versus the organization, this battle that's gone on over the ages. If you haven't read that book, you gotta get it and read at least the chapters about the rise of the individual versus the rise of the firm, because if you're leading people, especially in a larger organization, that's a fundamental concept that we don't often think about. But through times like during COVID, the individual gained tremendous power and you're seeing it right now play out. And then the corporation's beating its chest and saying, no, we hold the power. What does that look like today? It looks like the worker saying I want to work for home. That's the individual saying I've got the power, I'm the one who's going to dictate this. And for COVID and for coming out of the pandemic, that worked and we let people do that.

Speaker 1:

And then in the last year or two, you got the corporation saying, no, we hold the power. And that's them saying no, you're going to be back three days a week or you're going to lose your job, you're going to be back in the location. That's the corporation, the firm, saying we hold it. And there's this tension that's existed ever since the corporation was born, which really was during this time period I'm talking about. And so I'm fascinated with how these ideas came about that so many of us take for granted, like the HR department. When did human resources even get invented? Where did it start? Who had the idea? What was it like? We're going to talk about that in this episode or the next one, because that's what I'm uncovering, that's what we're digging through as a team and it's just fascinating to see how this happened.

Speaker 1:

So, welcome into the lead in 30 podcast. In less than 30 minutes, we give you a framework, a model, data, research stories, best practices, whatever it might be, whether it's from 1893, or whether it's from you know, yesterday, in some zoom meeting that we were in with the senior executive of a fortune 10 company, where we're just sharing that in these podcast episodes to give you something to think about as you consider how you lead people, as you work on strengthening your ability to lead people, because there's nothing that will impact your life more significantly your ability to earn income, to be able to have happiness, feel fulfilled, have it, have an impact. All of that is determined by your, your you strengthening your ability to lead. So we do that here in the Lead in 30 podcast. If you haven't heard about our 30-day leadership training course, leadin30.com is where you find out more.

Speaker 1:

Okay, so, man, I got so much to cover. We're going to do this in two or three episodes, and today is. If I had to title this right now, it would be Detroit versus Menlo Park, ford and Edison, and then in the next episode I think I'm going to get I'm not going to have time to do it. In this episode I'm going to take you to Dayton Ohio. Oh my gosh, I had no idea. I've never been to Dayton Ohio. I don't know anything about Dayton Ohio, and maybe it's not even a fascinating place anymore, but during this time period, maybe it's not even a fascinating place anymore, but during this time period, holy crud, the amount of stuff that I ordered from that that came from Dayton Ohio in the last 48 hours is insane. I'll talk more about that in uh in just a few minutes, but I think Dayton Ohio is going to be the next episode. Okay, so let's go to Menlo park, then we're going to go to Detroit and then I'm going to tell you why this matters, because this is all about the way you lead people. So travel with me to the late 1800s.

Speaker 1:

Thomas Edison invents the incandescent light bulb, and he's just a genius, like he's just, he's geeking out, he loves working in his lab. Called it like the invention laboratory, right, the invention factory, I think they called it, or something like that. I can't remember the exact term, I don't have my notes in front of me, but it's in Menlo park. And so Thomas Edison, he's hired all these assistants and these assistants just follow him around and they take notes and they record what he's doing. Why? Because he's terrible at that, he's terrible at organization, he's terrible at at at process. He just, he just loves ideating, he loves being creative, he loves playing around, he loves talking with different people and just, you see pictures. There are these images, they're going to be in our book and they, um, they're. They're pictures of him in the lab with these assistants and these other people around him and he's inventing these things and the market's going holy cow.

Speaker 1:

So he invents the, the incandescent light bulb. Then then that creates demand for power, because now people, they want, they want light. Like there's massive demand and he's just outside new york, you know, massive population center, and so word's spreading about the light bulb, so everybody wants it, especially anybody that's got any money right. So all the rich folks down in the financial district in lower Manhattan are like we have to have this. And so well, you got to be able to power them. And there's no power grid, it just doesn't exist. And so Thomas Edison invents that. He invents the first. It's the Pearl street station, lower Manhattan. Thomas Edison is the reason why the financial district of New York City got power. He did it.

Speaker 1:

So he invented the, he created the Pearl Street Station and, and, and suddenly, and, by the way, the person who's financing this, his name, is JP, jp Guess what. Jp's last name is Morgan Guess where you've heard about it. Jp JP Morgan chase you ever heard of chase bank? Yeah, that's where it all started. So JP, living down in JP Morgan, living down in lower Manhattan, and and and has money and he gets familiar with Thomas Edison, says, hey, I'll fund all this stuff. So he's just funneling money, paying for Menlo Park, for the lab and everything else, and then going and selling this crap and building these companies.

Speaker 1:

Thomas Edison, he's got all these companies that are starting and he's not like he's, it's a mess. He's a mess. He doesn't even know what's going on in all of these, in fact, so much so there's so much I could say about this, you all, but the way I'll just break it down and kind of the headline for you to think about and the reason that it's applicable to all of us. Besides, it's just fascinating about history at least it is to me where this all came from, and this wasn't that long ago. When you get to my age you start to realize, oh my gosh, 25, 50 years, a hundred years is not long. And this, you all this was not that long ago, okay and so? So JP Morgan is funding all this and these companies are facility where Edison's stuff had been locked up forever.

Speaker 1:

I don't know who had access to it. I don't know all that history. All I know is this team of academic researchers went in in in the in the 1970s. They discovered more than more than five million pages of notes. Five million pages of notes. Grandmother, who hoards everything, who has that basement or garage or barn that you are dreading having to go clean out or you had to dig through it and she's got notebooks and magazines and these things that are ancient, called newspapers in there. And she's got all this. I guarantee you she did not have 5 million sheets of paper, 3,500 notebooks. You couldn't collect 3,500. 3,500 notebooks if you tried. So these researchers in the 1970s are going through it. They're like holy crap, there's like massive amounts of pages. That's Thomas Edison, that's Menlo Park.

Speaker 1:

So think about the company, think about the organization. It's fun to work there, it's entertaining, it's interesting. We're innovating, we've got ideas, we've got whatever, and we aren't really growing, and so Thomas Edison never had a ton of people working with him. He had these companies, but read the history, read the data, he wasn't intimately involved, it didn't interest him, and so he would just kind of hang out and just talk, and it was cool and great ideas. But then, in fact, fact, look at the history of general electric. So interesting, I had no idea, maybe you knew this, I didn't. And.

Speaker 1:

And so general electric, do you know what? Where that company, ge came from? Ge, which is this monster, right, especially in the 1980s, 1990s to early 2000s. I mean, it's still a force to be reckoned with today, but it was dominant, like it was the. I mean you take Microsoft and these companies that are all the buzz today, right, apple and Amazon, and and, uh, and Google and all that. The GE was that right in the 1980s, in the 1990s, and and and. So this is where did GE come from General Electric? It came from Edison General Electric. Did you know what that was, what the company was called Edison General Electric? Well, why did Edison's name come off of it? Because he was a disaster, he was. And so JP master, he he was.

Speaker 1:

And so jp morgan takes this company that's powering manhattan and they've got a rival, and so jp morgan's financing this and he and and running it. He's realizing, oh my gosh, like we, we can't get movement from thomas edison in the form of managing people and corporations. By the way, think about how this is going to contrast with Henry Ford, because we're going to Detroit, michigan, in a few minutes. This is all in the same general timeframe, right? Not exactly the exact, but both guys are alive at the same time. We're going to talk about that in a minute because they were friends and Henry Ford's working for Thomas Edison.

Speaker 1:

So, all this unfolding in the American industrial revolution at this time, so all this unfolding in the American industrial revolution at this time, jp Morgan's discovering that man Edison's just like he can't lead people. He's not, he doesn't know how to, he doesn't, he's not built for scaling his leadership and, by the way, edison doesn't want to do that, he just wants his little team and he wants to be over there. Now you've seen the connection to some of you, because some of you actually do want to to scale your leadership and you're wondering why you don't get promoted. It's because you've got some of the Thomas Edison in you. You're mad I'm not talking about you being an inventor, I'm not talking about you being the source of some great ideas or something. But you love to talk, you love meetings, you love dialogue, you love consensus, you love all of that. You love just being involved in the work. You love working in a hospital. You love working in the manufacturing company. You're really good at that. Your relationships with other people are good. They like you. But you can't scale and because you don't have the systems and the process and whatever else.

Speaker 1:

And we're going to talk about Frederick Winslow Taylor in a minute, who invented this way of thinking. You ever heard of SOPs? Yeah, that's Taylor's invention. Standard operating procedures. You ever heard of performance metrics and how we monitor all these metrics Didn't exist until Frederick Winslow Taylor, who came on along at the same time. He's a thinker. All of data-driven management Winslow invented it At the same time. He's influencing Ford. We're going to Ford in a minute.

Speaker 1:

So anyway, so Edison JP Morgan takes Edison's company and he's funded it right, so he's got control of it, even though it's called Edison general electric. He merges it with the other major power company that's growing at the time, the competitor to Edison general electric. They combine those two companies, and then what do call it? They drop the Edison name, ge, and Thomas Edison goes and, by the accounts, everything you read, multi, all these different sources. He's like, yeah, I don't, I just don't really have the bandwidth to be involved in that or whatever. Oh my gosh, oh my gosh, oh my gosh. How did he do that? Like how? Because he just wanted to go over there and tinker. He wanted to be, just leave him over there with his team of 20 working in Menlo Park. So that's one style Menlo Park.

Speaker 1:

I want you to think about that leadership style Menlo Park. Just let me tinker, let me work. People love to work with me. I've got ideas, we love to meet, we love to do whatever, but we can't really scale. We're struggling to scale. I don't have the systems and the process and the organization and the metrics and all of that and I'm not willing to. I don't want to hire and fire people and I don't want to. I don't want to do all that. I'm not. That's not my strength. Menlo park, it's in you, it's in your blood, you're living, you're you're in that style and there are really good things.

Speaker 1:

I mean, thomas Edison, you're going to argue with this impact Unbelievable. And yet, what could it have been, and and and, what might it have looked like? And you could even argue well, yeah, but if he got involved in the corporate side or the business side, maybe he couldn't have come up with these. Argue well, yeah, but if he got involved in the corporate side or the business side, maybe he couldn't have come up with these. I, okay, and then, and and? Did he die wealthy? Yeah, he did. And did he do great for himself? He did. And was he happy by all accounts? So that worked for him? No, no, no. No discredit to that, but it has its place and you have to understand the strengths of it and the limitations to it.

Speaker 1:

We're meanwhile over here in detroit. Let's go to Detroit. So Detroit Henry Ford's working. He's in his twenties, he's had a kid, he's married and he's working for Thomas Edison. He's working the night shift as an as, a, uh, as a mechanical engineer is somebody kind of fixing different problems with the power grid out in Detroit, and he's developing his skills. And in fact he even goes out to New York to a business meeting, a conference at one of Edison's corporations. He didn't even know what he was doing. He's speaking at Edison, thomas Edison speaking cause he's, he's older than Henry Ford.

Speaker 1:

Henry Ford travels out I was going to say flies, he obviously didn't fly. He gets to New York and he goes to this meeting and he meets Thomas Edison and Thomas Edison and he shares with him this idea of the car and all these things. And Thomas Edison's like that's unbelievable, that's so impressive. Go do that Again. Thomas Edison like why didn't you help fund it? Why didn't you get involved? Like the business opportunity. Like Thomas Henry Ford, so much younger he would have totally given a portion of the company where, like, thomas Edison was like his idol, he just thought he was so unbelievable. And Edison's like yeah, you can see that at dinner parties. Like, yeah, that's really good idea. Good luck with that. I really encourage you. Oh, like pains me.

Speaker 1:

And so henry ford goes back to detroit and, after working for edison for nine years, he starts this ford motor company. He's got 20 people. Listen to this 1903 ford 20 people. 10 years later, 13 000. 10 years later, 50 000 ford motor company 1903 20. 10 years later, 13 000. You all think about the employment pool at the time. Think about the limit. I mean 50 000 people. We look at how much amazon's grown in the last 10 years. Unbelievable ford, that was it, man. So I like to think about like thomas edison.

Speaker 1:

Thomas edison is kind of like the elon musk right in some ways, but elon's so much better in in being able to anyway, but but just kind of an interesting thinker. And elon struggles to work with other people and whatever else, but but elon's way more advanced in a lot of ways. And and then you think of henry ford, kind of like the jeff bezos right, it's difficult to work with still, but able to scale and build the systems and do all of that. Just just insane, so really interesting to think about.

Speaker 1:

And so henry ford, he, um, he, he goes to chicago and, uh, he's heard about these meat plants in chicago because now the refrigerated railroad car has been invented and so now we can actually ship meat from factories. You don't have to be just a few miles away from the meat factory, we can actually ship it to you on a refrigerated rail car. I told you I geeked out on this stuff. Now do you believe me? So so tom or henry Ford hears about that and he goes up to these meat plants that are being built in Chicago. He gets into this one. There's this big hook. The cows are coming in. This is kind of I'll leave it out because otherwise it will gross some of you out but the cows are coming in alive on one end of the factory and then they get, they're killed, and then they're hooked up to the hook and then the hook starts moving the assembly line, the cow starts moving down the line, this mechanical line, and you've got people doing what they need to do to get different parts of beef and hamburger and soap and all that sort of thing.

Speaker 1:

Henry Ford goes and looks at that and he's like, oh my gosh, that's it, that's the answer. Like we need to put cars on this sort of thing. So it goes back to Detroit and he builds it, the, the assembly line, and and this just changes everything, right, it changes everything. And so now they're producing at the, at the, at the heyday of a model T, every 22 seconds they're coming off the line, unbelievable, they're selling them for 500 bucks at the time and these things are just going everywhere. And so he's got to have manpower. So he's got all these people that he's hiring, he's building systems and he's subscribing to the thinking.

Speaker 1:

In fact he has Frederick Winslow Taylor come out, who invented this thing called scientific management, and all you need to know about scientific management which, by the way, I've ordered his book the original, I don't have it yet, but it's coming and just geeked out on it. And so this is where SOPs. Frederick invented it and basically he studied, he studied the way his, his friends played. He had a weird mind you all engineer like, just broke down everything. So he had friends in high school that were playing tennis and he would categorize how they did it. And then he broke it down into data. And so then he worked at Bethlehem Steel Company in Pennsylvania, in Pennsylvania, and he analyzed the way that they dug shovels, right, had the way they were digging the earth, and he decided he built these different size shovels. He knew exactly how many pounds of dirt or different materials should be on each shovel load, and he he I mean he's the guy that would have driven all of us insane. Right, you did not want to work for frederick taylor, because he would say this is how many pounds of dirt, how many pounds of rock, how many pounds of whatever should be on that shovel. He systematizes it and efficiency goes through the roof and he decides he advocates to anyone that will listen. He ends up going into consulting, like what I do at the time, because there's so much demand for his thinking.

Speaker 1:

He travels out to Detroit, henry Ford. He's telling Henry Ford, look, you need to have managers. This is where, like modern day, management and factory and management was invented. Because, before you would, you would hire people, but you weren't working with them every day and the skills that that particular person had were up to them. There's no such thing as training in a company. Like that didn't exist. And so you got what you got.

Speaker 1:

And so frederick taylor said henry, you need to break down these skills. You need to train people in house to be able to do certain things. You need to define how many bolts they should put on this, how many wheels should be put on per hour, how like just you need to. All this needs to be data driven. And so henry ford does that and he invents this thing called the five dollar workday and he puts out an employee which was double what any other company was making and he calls it profit sharing. Your base is 250 and then you get another 250 a day if you meet the requirements in the employee handbook, you all. This is crazy.

Speaker 1:

So he invents the, this department of investigators, like he would be sued. So bad um in today's day and age. But if you were a man over a certain age, you had to be married and they would come and inspect your home. If it wasn't clean enough, you lost half your paycheck, you lost the profit sharing if, if, if your kids weren't orderly. I mean, this is insane. It's all in the employee handbook. I'm gonna have a physical copy of it. I've already got the electronic versions and, and, and and I'm gonna have it in like any day now. And it's coming, it's coming to us, and so the originals, and, and.

Speaker 1:

So he dictates all this and he and he puts together, um, investigative units and people are willing to follow it because the money's so good. But then it ultimately leads to what was called the forge strike riot, and the pulitzer prize winning photograph from that year came from an image that was captured. Because that gave way to the birth of something called the labor union, because it ultimately got to a point to where Ford employees said get out of our lives, stop sending investigators to our homes. You can't tell us whether or not we have to be married or not, you what? How we raise our kids is up to us. And the power of the individual started to rise for the first time since the rise of the corporation and that really created challenges for Ford. So think about I'm out of time for this episode. We're going into it more in the next one, so just stay with me.

Speaker 1:

If it's not out yet it's coming out in a few days because I'm going to take you to Dayton Ohio because Henry went too far, thomas Edison too disorganized for Henry Ford too heavy handed. Yeah, I mean, it was unbelievable what he built. It was unreal, but it led to the birth of all these competitors and it fueled labor unions and it caused uprisings. Because he was too heavy handed, he totally lost out on what they discovered at a place called NCR. The birth of Silicon Valley was it in Dayton Ohio and it happened at a place called NCR with a guy called John Patterson, and you're going to meet him in the next episode.

Speaker 1:

So Menlo Park, disorganized, couldn't scale. Detroit scaled big time too heavy handed Micromanaging led to challenges with engagement and retention is how we'd say it today. The answer was being created in the exact same time period in Dayton Ohio and what happened in Dayton Ohio is going to blow your mind and we'll dig into it in the next episode of the lead in 30 podcast. Share this episode with a colleague, your team or a friend. Tap on the share button and text the link. Thanks for listening to the Lead in 30 podcast with Russ Hill.