This year marks the 100-year anniversary of the Model T, the first widely (and wildly) successful car. What does the evolution of the Model T, and the automobile industry, say about business innovation?

The Model T will turn 100 on Oct. 8. Ford already has started promoting the car's centennial.

Henry Ford's automobile was a great innovation at the time for a couple of reasons. First, it was a good quality product at a reasonable price, which isn't so innovative in itself but when applied to a radical new mode of transportation, one destined to reshape the world's way of living, it helped kick-start (so to speak) that transformation by appealing to a wide buying public. Second, five years after its introduction Ford began producing his "people's car" on one of the first modern assembly lines, which ensured its continuing low cost and consistent quality.

Those were major business innovations then. Today, not so much. In fact, authors Prahalad and Krishnan use the Model T as an example of what not to do in the New Age of Innovation:

The Model T from Ford, the icon of the industrial revolution, was built on two premises that are the opposites of N=1 and R=G. Consumers were treated as an undifferentiated group, and hence the famous dictum "Any color is OK as long as it is black." All resources had to be within the firm to capture value. (p. 12)

They also make the point that "no business today operates along the lines of the original Ford model." As soon as it had served its purpose, that product and process gave way to the highly engineered, global-supply-chain-oriented vehicles we have today.

The Model T became the symbol of another kind of innovation, though, this one driven from the bottom up. Because the Model T was so widely available, it was extremely cheap in the second-hand market. That's one of the reasons why California car enthusiasts embraced the ubiquitous Model T as a cornerstone of the hot-rod culture that developed after World War II. Here's a little history of the Model T's transition to the hot rodder's vehicle of choice.

In the 1960s, Detroit found success following the lead of the hot rodders, producing popular products like the Ford Mustang, the Chevrolet Camaro, and the Pontiac GTO. It's important to note that those products weren't slavish imitations of hot rods, but instead new products inspired by that consumer-led trend.

This century, the American automakers lost their way. They almost completely abandoned the idea of the "people's car," preferring instead to concentrate on big trucks and SUVs that, while popular, hardly anticipated (i.e. innovated) the future needs of the public. They also tried to imitate (translation: copy) their earlier success with hot rods by reproducing retro versions of those cars, instead of looking ahead to their next generations.

Both of those bets lost big when the economy changed. Tata Motors has just produced the next iteration of the "people's car," which makes that company look incredibly prescient in today's energy-squeezed marketplace. And Detroit is scrambling to connect with consumers to produce what they want now and will need two years from now, while modifying its supply chains to find the resources to produce those products as fast as it can.

What the Model T shows is that business innovation is a product of its time and place, resources and circumstances -- a product that both serves a need and anticipates the future. Or you could describe it this way: N=1, R=G.

Here's a video of Ralph Szygenda, CIO of General Motors, talking about what the New Age Of Innovation means to him and his car company.