The innovations of today may seem light years away from the inventions of the late 1800s and early 1900s, but the problems we're attempting to solve are no different.
Social networks and smartphones are changing the way we communicate in the same way Alexander Graham Bell did with the telephone. The first public health clinics were developed to slow the spread of TB and influenza in the same way we're researching cures to today's most deadly diseases. The list goes on.
The greatest companies, whether today or 100 years ago, solve the biggest needs or desires of their time. As the story of Henry Ford can teach us, however, it's much more than that. These companies are driven by a mission that empowers employees and consumers; they bring something completely new to the table, and their business models are dynamic and adaptable.
On a mission
Railroads in the 1800s made travel across the United States possible, but daily transportation was still one of mainstream America's greatest problems. Though cars existed, they were expensive, unreliable, and complicated to fix.
Ford saw himself as a man of the people, and believed he could create not just a better car, but a durable and affordable vehicle for the modest American.
Keep in mind this was more than 100 years ago, so the same sentiment in 2014 might read more like, "I want to build a helicopter every American can afford." The idea was revolutionary.
Great companies have a mission, and they stick to it because it's ingrained in their very core. Even when Ford's progress in developing this affordable automobile stalled, he rejected his investors' calls to build a luxury model he could sell to the wealthier classes.
Bringing something new to the table
Ford started with the Model A and created 18 more failures before launching the Model T. This would become one the best-selling cars in history, selling 16.5 million units in 19 years.
Ford revolutionized the car, and then vastly improved manufacturing and productivity by using assembly lines in which each employee was responsible for just one task.
There was, however, one big problem: Assembly line work was draining and employee turnover was high, thus increasing the cost of training new employees.
Ford solved the problem introducing the third of his revolutionary ideas, doubling employee pay to $5 a day. Adjusting for inflation, an assembly line worker's salary would have jumped from $15,000 a year to roughly $30,000. This decreased employee turnover, boosted morale, and improved sales by giving employees the opportunity to buy the cars they were building.
Not every great company is first in its industry, but they always innovate and they're always the best. Ford saw what was available and made it better. He improved efficacy by adopting ideas from other industries and did what other companies wouldn't -- paying his workers twice the typical wage.
The last piece of the puzzle
Ford's innovation changed what Americans thought was possible, and they wanted more. The 1920s brought a booming economy and an increased consumer demand for all things new and exciting.
Ford had the capability to create a more luxurious car, but the idea scraped against the grain of what Henry Ford stood for: an affordable car for the modest American. Ford had a mission, and he believed he had accomplished it with the Model T.
Ford eventually released the car consumers were demanding, but as competitors swooped in, the company surrendered its strong hold on the industry.
The last piece to the puzzle is whether a company's mission and platform are adaptable. Ford may have lost battle in the 1920s, but they didn't lose the war. Henry Ford's original mission of quality, durability, and affordability still remains today a big part of the "Ford tough" image and their success throughout history.
As an investor that's what you should look for: A business that solves a big problem, has a clear mission you can stand behind, and has the potential to stand the test of time.
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Dave Koppenheffer has no position in any stocks mentioned. The Motley Fool recommends Ford. The Motley Fool owns shares of Ford. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.