Once upon a time, Hollywood rebels, actors like James Dean and Marlon Brando, reflected the Harley Davidson market appeal.
“In the late 1950s, this roster expanded to include young “Elvis types” attracting dates with their Harley motorcycles.” (Hbs.edu, 2007)
Unlike today, a handful of media channels at the time controlled the allure and distribution of Brando and Dean around the world to promote brands. Harley Davidson grew Sales as a result — it was like shooting fish in a barrel.
From the 1950s to the 1970s, while Harley bikes were leaking oil on showroom floors, here’s what was happening behind the scenes:
“In 1959, Honda accidentally uncovered a large untapped customer base of older males and younger women — a segment not well suited to the “tough” Harley motorcycles.” (Hbs.edu, 2007)
By 1980, Harley Davidson tinkered on the brink of collapse, but survived, leaving behind lessons for future generations.
This article is about that journey, mistakes and what Startups can learn from Harley Davidson’s recovery in order to grow their business.
There were seven factors that led to the demise of Harley Davidson during this time, namely:
By departing from long-held values and established brand identity AMF had inadvertently contributed to the demise of Harley Davidson. This freefall effect was amplified by failing to reinvent the organization.
Following the management buyout (from AMF) in 1984, command and control leadership was deployed, temporarily.
Unilateral decision-making enables crisis-focused steps to stabilize a company in the short-term by reducing operating costs. Two immediate actions that were enforced witnessed i) a reduction in staff and ii) production volume.
This was about survival.
Command and control leadership is not effective in the long term as it can have devastating effects (Glazer, 2019). That said, given certain circumstances, it was the only option at the time for Harley Davidson.
This leadership approach is not beyond risk but when an organization is on the brink of collapse like Harley Davidson was in the 1980s, it’s absolutely necessary for immediate survival.
Decisive (yet divisive) leadership proved hugely beneficial during Harley Davidson’s transformation, buoyed by company communications in “creating a sense of urgency.” (Kotter, 2011)
When immediate pressure was relieved at Harley Davidson the company began to grow market share. A stable financial footing was realized. The next phase to sustain this momentum was to empower and motivate employees, those who contributed to the company’s survival.
Leadership challenges remained.
A shared leadership or “participative leadership” style emerged, phasing out ‘command and control’ (HBR, 1973). New workgroups were created. In this environment, groups thrived, innovative concepts and ideas were encouraged and implemented — solidifying the transformational journey.
“An extroverted, sensitive leader who openly shares decisions and authority with subordinates — this is the profile that emerged when 318 executives were asked their opinions on the characteristics of participative leadership.” (Harvard Business Review, 1973)
Leadership traits to cultivate this new environment were promoted — High emotional intelligence (sensitive), effective communication, and listening skills ensured confidence, flexibility, decisiveness, trustworthiness, courage, and capacity to motivate amongst the ranks.
The empowerment of employees was nourished at this point.
Empowerment involved the development of quality workgroups whereby employees were given ownership of production quality. This mutually beneficial profit-sharing scheme had a direct influence on the company’s success.
The Harley Owners Group was born — HOG
By reducing the management hierarchy and embracing change Harley Davidson devised a way to motivate employee behaviour for a common goal.
Relationships between management, unions, staff, and stakeholders had a positive effect. A partnership type relationship with the unions evolved, replacing the old confrontational communication seen in previous decades.
A participative leadership approach supported the ‘continuous improvement’ ethos within Harley Davidson. Inclusion meant that the entire organization was involved, in addition to partners like unions and suppliers.
Respect for all stakeholders was nurtured, a clear vision and company values were agreed, shared and mutually embraced. Relationships flourished under this new regime.
Ironically, Harley “adjusted in part by adopting Japanese management methods”. In the years that followed Harley Davidson grew at an incredible rate (Kristof, 1985).
For Startups and Entrepreneurs, there are seven lessons to take away from Harley Davidson’s demise and near collapse:
Harley Davidson revealed seven focus areas, seven mistakes, a list of what not to do when growing a Startup. All of which can be actioned by any Startup at any time.
There is no secret sauce, secrets are visible from past mistakes, all Startup founders have to do is look and learn.