Background

• 1901– In Milwaukee, William Harley, 21, and Arthur Davidson, 20, began experiments on “taking the work out of bicycling.” They were soon joined by Arthur’s brothers, Walter and William.
• 1903– manufactured first 3 motorcycles
• Next Leaders – 2nd generation of each families
• 1941-1945-Almost immediately after the Japanese attacked Pearl Harbor, Harley-Davidson’s entire motorcycle output was produced for Allied use. By the end of World War II, 90,000 WLA army-version motorcycles had been built and shipped.
• 1969-After going public for the first time in 1965, Harley-Davidson took a new turn in 1969 by merging with the American Machine and Foundry Company (AMF). Rodney Gott, AMF’s chairman, had been a Harley fan since pre-World War II
• 1975– AMF-Vaughn Beals Head of Harley Davidson
• 1981-On February 26, 1981, a group of thirteen senior Harley-Davidson executives, led by Vaughn Beals, signed a letter of intent to purchase the company from AMF. Settled by June 16, 1981, the executives celebrated with a ride from York to Milwaukee. 1981 production: 41,586 motorcycles.
• 1980’s– William G. Davidson was VP
• 1982 – President Reagan imposed tarrifs on foreign bikes
• 1986-Harley-Davidson returned to public ownership by offering two million shares of common stock and a concurrent offering of $70 million principal amounts of subordinated notes due 1996.
• 1987– Harley asked to lift tariffs

Leadership

• HIGH LEVELS OF PERSISTENCE
• OVERCAME SIGNIFICANT OBSTACLES
• ATTRACTED DEDICATED PEOPLE
• INFLUENCED PEOPLE TO ACHIEVE GOALS

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• 1901- William Harley and Arthur, William & Walter Davidson.
• Next Leaders – 2^nd generation of each families
• 1965, Harley-Davidson took a new turn in 1969 by merging with the American Machine and Foundry Company (AMF)
• 1975- AMF-Vaughn Beals Head of Harley Davidson
• 1980’s- William G. Davidson was VP
• Current CEO – Richard Teerlink, who was previous CFO

 

Core Ideology

• STATEMENTS OF IDEOLOGY
• HISTORICAL CONTINUITY OF IDEOLOGY
• IDEOLOGY BEYOND PROFITS
• CONSISTENCY BETWEEN IDEOLOGY AND ACTIONS

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• Quality comes ahead of quantity
• Harley-Davidson’s Worldwide Mission Is To:

Preserve and perpetuate the Harley-Davidson institution through continuous improvement in the quality of our products and services and achievement of our financial goals.

Provide motorcycles, accessories, and services to motorcyclists in selected niches.

Provide the general public brand identified products / services to enhance Harley-Davidson’s image and attract new customers.

Engage in manufacturing or service ventures that can add value (not only profit) to the motorcycle business.

• 18 year involvement with MDA. Have given over 25 million dollars over that time.
• Harley-Davidson Foundation: contributes to community projects and match volunteer hours with monetary to those organizations
• Purely brand oriented: American-made
• “Harley family”
• External focus

BHAGS

• USE OF BHAGS
• AUDACITY OF BHAGS
• HISTORICAL PATTERN OF BHAGS

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• Alternative to Japanese

Cultism

• INDOCTRINATION
• TIGHTNESS OF FIT
• ELITISM

 

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• Mystic/Experience/Passion
• Chains
• Long hair
• Tattoos
• Barbie doll
• Harley cologne
• 80 hours of training on quality/productivity improvement
• “Hog” user groups
• Employees own “hogs”
• Focus on Employee “Value-added” idea, primarily from customers
• Worshipping the ground the “hogs” are manufactured on
• Willing to wait a year to get new “hog”

Purposeful Evolution

• CONSCIOUS USE OF EVOLUTIONARY PROGRESS
• OPERATIONAL AUTONOMY TO STIMULATE AND ENABLE VARIATION
• OTHER MECHANISMS TO STIMULATE AND ENABLE VARIATION AND SELECTION

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• Engines to bikes
• Motorcycles
• Clothes- Harley Experience, restaurants, and collectibles
• Licensing agreements
• High end products only: Zippo vs. Bic lighter

Management Continuity

• INTERNAL VERSUS EXTERNAL CHIEF EXECUTIVES
• NO POST-HEROIC-LEADER VACUUM OR SAVIOR SYNDROME
• FORMAL MANAGEMENT DEVELOPMENT PROGRAMS AND MECHANISMS
• CAREFUL SUCCESSION PLANNING AND CEO SELECTION MECHANISMS

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• Buyouts: AMF brought in external mgmt.
• Harley-Davidson Saviors
• Little attention to Mgt. Development
• Little evidence of careful succession or planning

Self-Improvement

• LONG-TERM INVESTMENTS(PP&E, R&D, EARNINGS, REINVESTMENTS)
• INVESTMENT IN HUMAN CAPABILITIES: RECRUITING, TRAINING, & DEVELOPMENT
• EARLY ADOPTION OF NEW TECHNOLOGIES, METHODS, PROCESSES
• MECHANISMS TO STIMULATE IMPROVEMENT

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• Dividends
• Expanding Mfg. – Kansas City
• Buell Spinoff
• R & D – Marketing
• $200 million to expand capacity
• Recent ideas copied from Japanese