Sunday Strategist: Lee Iacocca’s Middle-Management Magic

"(Bloomberg Businessweek) -- By the time Lee Iacocca died last week at age 94, Ford, his former charge, had sold more than 10 million Mustang sports cars..The Mustang lore varies, but it was Iacocca’s baby according to many accounts, principally his own. Much of the man’s eponymous autobiography details the pony car’s origin story and it still reads as a masterclass in middle management..Iacocca had been at Ford 14 years and was slowly slogging his way up the chain in Detroit when the Mustang project got underway. First, he freed up some capital by killing off the Cardinal, a compact German-built concept that Iacocca quickly dubbed “a loser.” Senior executives were happy to let him, according to his account, so they wouldn't have to shoulder any of the blame for what came next..Iacocca then dug into the data a bit in ways the company wasn’t inclined to. He noticed more younger customers and crucially more highly educated younger customers. Single people, and women in particular, were coming into the market in volumes not seen before. .Having found a market, he set out to make a product. In what would eventually become textbook disruption strategy, Iacocca rounded up a small crew of overlooked and underappreciated talent who were sure to be loyal. The HR odds and ends decamped to the Fairlane Inn— perhaps the closest thing mid-century Detroit had to a WeWork or SoHo House—and started scheming..“We were dimly aware that the car market would be stood on its ear in the next few years,” Iacocca wrote. “Although there was no way of knowing exactly how that would happen.”.Up to that point in America, cars basically could be had three ways: big, small or sporty (read: expensive). Iacocca's team came up with a something in the middle—a mid-sized machine with relatively high performance and a relatively low sticker price..“We wanted to develop a car that you could drive to the country club on Friday night, to the drag strip on Saturday, and to church on Sunday,” he wrote. “In other words, our intention was to appeal to several markets at once.”.Iacocca made the math work with clever parts-sharing and supercharged unit economics. Borrowing a platform and chassis from the Ford Falcon, Iacocca convinced his superiors he could develop the Mustang for $75 million, about one-fourth as much as a new vehicle usually commands..Of course, Ford needed to design it. With the clock running down, Iacocca split designers into teams and set them off on a two week competition. Yes, one of the most iconic vehicles in history came from a hack-a-thon..You likely know what happens from here. Ford initially assumed it would sell 75,000 Mustangs in the first year. The herd blew right by that, passing the 1 million mark in just 18 months..Six years after the launch, Big Lee was chomping on cigars in the corner office, well on his way to being one of the first celebrity CEOs..Businessweek and Beyond. If you can’t follow the money, follow the planes More cowbell: How rock stars found productivity gains An ad-man, at 74, starts again Climate hedging is hard “He said, ‘I’m going to start an auto company.’”.To contact the editor responsible for this story: Silvia Killingsworth at skillingswo2@bloomberg.net.©2019 Bloomberg L.P."

Sunday Strategist: Lee Iacocca’s Middle-Management Magic

By the time Lee Iacocca died last week at age 94, Ford, his former charge, had sold more than 10 million Mustang sports cars.

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Sunday Strategist: Lee Iacocca’s Middle-Management Magic

By the time Lee Iacocca died last week at age 94, Ford, his former charge, had sold more than 10 million Mustang sports cars.

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