Full Throttle Success
During the 1970s, Harley-Davidson led the world in motorcycle production, claiming 70 percent of the market share. By 1983, that figure had dropped to only 23 percent. Even the company’s loyal customer base was beginning to talk about the new bikes’ poor quality. The company was about to file for Chapter 11 bankruptcy when a last-minute buyout by the executive management team saved it. After that, Harley-Davidson’s future was clear: Do or die. It had to change drastically or go out of business. The company’s CEO, Richard Teerlink, stepped in and took a firm position: Quality wouldn’t be sacrificed. “We created a vision that was simple,” he commented. “Survival.”
Teerlink and his management team led a cultural change based upon five core values:
 Tell the truth.
Keep your promises.
Be fair.
Respect the individual.
Encourage intellectual curiosity.
These values, plus Teerlink’s commitment to total quality and continuous improvement, brought about a change in the entire employee population. Managers expected employees to ask questions, make suggestions and challenge things that could be improved. Everyone was trained in team dynamics, problem solving and other quality tools.
Teerlink took another drastic measure. He unloaded many business units that weren’t in direct alignment with manufacturing motorcycles, allowing everyone to concentrate on building the best bikes possible. The company began to focus its attention on its most important asset--its client base. It established a number of ways to get direct feedback from customers. A typical example were the Harley rallies sponsored by the company. Even Teerlink showed up at these gatherings wearing leather and riding a big, well-used Harley. He believed if he and his team didn’t use the products they manufactured, the company had no right to expect others to purchase and use them either. These rallies increased customer loyalty because customers felt they were part of the Harley-Davidson family. The organization sold more than just a bike; it sold freedom and a break from daily routines and work schedules.
Simultaneously, Harley-Davidson began to push the slogan, “We sell excitement, a way of life.” Their customers began to relate to each other, forming a community that had its own identity and promoted ever-growing loyalty.
During the early stages of its comeback, the company focused on products and responding to customers. Next, Harley-Davidson asked one of its plant managers, John Fitzpatrick, to take the responsibility of bringing a process focus to the organization. As Harley-Davidson began planning a new facility in Kansas City, Fitzpatrick was tapped to lead the nonmanufacturing process work. He understood quality had to be built into the product, and poorly designed processes usually limited quality output. He also believed empowered teams produced the best end results, at the lowest cost, and had the biggest positive impact on customer satisfaction. His efforts in Kansas City, in conjunction with other managers, demonstrated processes should be designed to align with the organization’s culture.
In parallel with the new customer trust--or more probably as a result of that trust--the organization itself changed. People took on more responsibility. An increased feeling of ownership and personal commitment to excellence was noticeable on the part of everyone in the organization. This led to more open communications, participation, higher productivity and an empowered workforce that wouldn’t tolerate poor quality. As the span of organizational control widened, the layers of management began to collapse. This transformation was reflected in the way the company referred to itself: “We’re in the business of motorcycles by the people and for the people.”
What did all this change accomplish? Today Harley-Davidson produces the best motorcycles in the world. Even Japanese cyclists place Harley-Davidson as the No. 1 choice. Sales and production have tripled, and the company has enjoyed 17 years of record sales and profit growth.
Harley-Davidson’s story is one of true transformation brought about by a leader who infused new vision, beliefs, heart and spirit into the organization. It’s also a story about how an organization can come together to bring about positive changes. The story proves that when a company is prepared for a change, and when the people who are affected by that change are involved in making the change happen, seemingly impossible feats become doable.
Now ask yourself: Is your company a Harley-Davidson type of organization or still uncommitted to being the best it can be? If the latter is the case, what can you do to help make the needed changes?
At a minimum, you can make a personal commitment to bring about the needed changes within your organization. Start there and let Harley-Davidson’s success story inspire you.
H. James Harrington is CEO of the Harrington Institute Inc. and chairman of the board of Harrington Group. He has more than 45 years of experience as a quality professional and is the author of 22 books. Visit his Web site at www.harrington-institute.com.
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