Lean Manufacturing

We Don’t Need a Big Culture Change at Ford. No Wait, Yes We Do!

By Jon Miller Published on January 23rd, 2006

The Ford Motor Company presented their restructuring plan called “The Way Forward” today. Ford is planning to shake things up. In CEO Bill Ford, Jr’s words:
“Here is what we will not stand for: incremental change, avoiding risk, thinking short-term, blocking innovation, tying our people’s hands, defending procedures that don’t make sense, and selling what we have instead of what the customer wants. In short, we will not stand for business as usual.”
Mr. Ford is making some painful decisions that require courage. One of them is to reduce North American capacity by 25% by shuttering over a dozen plants over the next 7 years. Another is to stop playing the Wall Street short term profit game. Ford no longer issues a quarterly earnings guidance, and per Mr. Ford:
“Today, I am announcing that Ford Motor Company will no longer publish annual earnings guidance either.” Bravo, Mr. Ford. Your great-grandfather would be proud.
Mr. Ford continues: “We must be guided by our long term goals of building brand, satisfying customers, developing strong products and accelerating innovation.” My respect for him increases. This coupled with a true kaizen culture, and Ford could do great things again.
Time Magazine put Ford CEO Bill Ford on the cover for its latest issue, and featured him in an interview dated January 22, 2006. It’s a good interview that sheds light on Mr. Ford’s character as a leader. This should help build confidence in the Ford Motor Company, which is one of Mr. Ford’s stated goals in the article. In response to the question “Isn’t Toyota going to rule the world?” Mr. Ford says:
“No! My goal is to fight Toyota and everybody else and come out on top. I’m not ceding anything to Toyota. They’re an excellent company, and they’re a terrific competitor, but I look forward to taking them on.”
It’s great to hear these words. But I was surprised by Ford’s response to the interviewer’s question “How do you change your corporate culture?” Mr. Ford said:
“Interestingly, this doesn’t require a tremendous amount of change to our culture. Innovation is going to be the driving force of this company going forward. But the good news is, that is very much the history and the culture of this company, all the way back to the Model T and the assembly line.”
The interviewer points out that in the past not everyone at Ford Motor liked his ideas, and that he was called “naive” in the past. Mr. Ford’s rejoinder was: “Well, yes. Let’s see who’s naive now.”
Perhaps Mr. Ford is still a bit naive. The efforts of Mark Fields, who is Executive Vice President, Americas for Ford is featured in the Wall Street Journal today (see also his speech to the media available on Ford’s website). The title of the article is “Way Forward” Requires Culture Shift at Ford.
According tot he WSJ article Mr. Fields is bringing what I would call a tremendous amount culture change to Ford through cross-functional teams, the message of “change or die” and slogans on the wall such as: “Culture is unspoken, but powerful. It develops over time — difficult to change.”
Albert Einstein said: “The problems that exist in the world today cannot be solved by the level of thinking that created them.” Simply stated, company culture is how people think about themselves, what they think about the company and how this affects the actions people take. I’m no Ford culture expert, but if a different level of thinking is needed in order to solve the problems at Ford, they will need a culture change.

  1. Karen Wilhelm

    January 31, 2006 - 12:58 pm

    Hey – If Ford doesn’t lay you off, you get a really cool “red, white & bold” bracelet!! Who do they think they’re kidding?

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