Ridding Harley-Davidson of traditional business trappings was vital to the corporation's success, the president and CEO of the motorcycle manufacturer said last night at a speech sponsored by the Harvard Business Club.
"I generally don't wear a coat, and I don't often wear a tie," Richard Teerlimk told about 40 formally attired undergraduates a few minutes into his lecture, as he removed his blazer.
Harley-Davidson's innovative management style surfaced as a result of its brushes with bankruptcy in the early 1980s, Teerlimk said. The company faced competition from Japanese manufacturers and the quality of its products left a lot to be desired, the CEO told the students in Union Parlor B.
"If there was a bike sitting by the side of the highway, you had no trouble figuring out what kind of bike it was," Teerlimk said. "It was a Harley."
A group of 13 employees trying to save the company bought it, but the corporation continued to lose money, Teerlimk said, because of its structure and management style.
"It wasn't the unions, it wasn't Japanese culture, it was the white shirts and ties," said Teerlimk, who wore a striped shirt and a tie and socks bearing the Harley-Davidson logo last night.
Today, the company has overcome quality and public relations problems and has doubled its 1981 share of the U.S. market. And internationally, about 30 percent of its motorcycles are sold abroad.
Teerlimk said the management style of the country's only motorcycle manufacturer is based on a set of behavioral guidelines that all employees must follow when they represent the company. These values include honesty, fairness and intellectual curiosity, Teerlimk said.
The company's management is now based on "a series of interlocking circles," he said. Although the president has the final authority, most decisions are made in groups, according to Teerlimk, who joined the corporation in 1981.
The company has also overcome public relations problems. Although the notorious Hell's Angels make up only around one percent of Harley's clientele, many other motorcyclists were afraid to even enter Harley dealerships in the early 1980s, Teerlimk said.
Now, after outreach programs to motorcyclists from points ends of the spectrum--including traditionally underrepresented groups such as women--Harley has drastically increased its consumer base.
The company's owners "realized that there was something more to Harley than the hardware," Teerlimk said. "They realized that Harley was an American institution that deserved to be saved."