HAMMERING OUT A VISION AT FORD

ford

I’ve written about Ford Motor Company in both editions of ALL THE MOVING PARTS: ORGANIZATIONAL CHANGE MANAGEMENT.  In particular, I featured Alan Mulally’s arrival as CEO of Ford in 2006 and his excellent actions aimed at moving the company from one where each division head operated in a silo without consultation with others, and where the necessity was to establish a “gut-wrenching agenda” in order to turn Ford around.

In order to regain its North American market share, trim its eight brands and turn out cars that had a “Ford feel,” Mulally established a “war room” in which the data that depicted Ford’s dire circumstances was displayed: red-coded charts to show Ford’s plunging U.S. market share, its North American financial forecast and its material-cost disadvantage; yellow-coded charts showing data that reflected the American trend at  that time of moving away from SUVs and trucks; and green-coded materials showing Ford’s inroads in cutting the workforce by half through buyouts.  To finance efforts, Mulally took the action of mortgaging nearly all of Ford’s assets and also made organizational changes in marketing and sales in order to better communicate the product line and tell the product story.  And he instituted his Thursday morning meetings for all the division heads where each was expected to share their data freely even the bad showings of performance, saying “You can’t manage a secret.”  Needless to say, Mulally effected an amazing turnaround at Ford so that when he left in 2014 he was credited with saving Ford.  He was succeeded as CEO by Mark Fields from his leadership team.  Fields was pushed out by the Board when it decided that the marketing landscape was changing faster than Ford was able to keep abreast.   Board chairman Bill Ford, Jr. selected his friend Jim Hackett, then CEO of Steelcase Office Furniture ($3 billion valuation) – and without any automobile company experience – to succeed Fields as CEO of Ford ($146 billion valuation).  Hackett recently outlined plans for a broad, multi-year $11 billion restructuring plan, without specifics, and is known for his oblique discussions in leadership meetings, to the point that those present have begun asking his chief of staff to provide them with clarifications of comments and graphics following the meetings.  One of Hackett’s first moves when he took over as CEO in 2017 was to shrink his leadership team from 18 down to eight direct reports, and to cut down on the size and frequency of meetings, favoring giving his top executives “more decision-making room.”  Sounds like we’re about to travel full circle, back to the silos that Mulally combatted for several years before overcoming the isolationist tendency and bringing the company together.

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