May 30, 2007

Can he do it?

As many of my blogging pals are likely to report, Ford’s Alan Mulally appeared in an article on msnbc Tuesday. David Kiley of Business Week was lukewarm about Ford’s prospects, but he revealed a few actions Mulally had taken to push Ford’s culture in the right direction. Gestures do not a transformation make, but they are encouraging to me. Resident household technician and troubadour, Mike, is depending on a Ford pension to keep us solvent in our golden years, and I’d like to be able to count on some healthcare insurance too.

So what do I like about some of the things Mulally has done recently? Here’s a sampling:

Asked by one of his inherited top people how he thought he’d understand the car business with no experience, his response was, "An automobile has about 10,000 moving parts, right? An airplane has two million, and it has to stay up in the air."

He didn’t say it, but Boeing has some of the toughest customers imaginable, so he’s not in the habit of ignoring them. Mulally and two senior engineers recently went to the Consumer Reports automobile testing facility to visit the publication's staff and get their evaluations of all Ford’s products. The testers didn’t sugarcoat their responses. Ford's engineers got defensive, and started arguing. Mulally reportedly said to them, "You know what? Let's just listen and take notes."

When Mulally was reviewing the company's 2008 product line last September, he was told that Ford loses $3,000 on every Focus sold. He asked, "Why haven't you figured out a way to make a profit?" Getting the usual excuses about the company’s CAFÉ average and that the Focus plant is a high-cost UAW factory, he said, "That's not what I asked. I want to know why no one figured out a way to build this car at a profit, whether it has to be built in Michigan or China or India."

After giving lip service to commonizing parts and sharing platforms around the world, Ford still has 30 platforms, with no common mirrors, headlamps, or even springs and hood hinges. Mullaly has told Ford executives that there’s no way the company can succeed with that sort of complexity.

He’s challenging fiefdoms by forcing every operating group to share all its financial data with every other group. Kiley says Mulally believes you can't manage a secret.

The monthly meeting of division chiefs is now weekly and every executive has to attend in person or by videoconference. BlackBerrys are banned, as are side conversations. And the big shots are “encouraged” to bring a different subordinate to every meeting. Imagine -- underlings learning what’s going on.

Executives used to come to the meetings lugging thick background binders so they could answer each and every question that arose. (Presumably attacking each other with attempts to find weaknesses.) Mulally’s not too concerned about people saying, “I don’t know.” If they don’t have the answer one week, they’ll bring it the next one.

He is also attacking the white-collar/blue-collar caste system by seeing that shop floor workers get bonuses based on the same formula as the guys with the fancy degrees. Will that forestall some tricky issues at union talks later this year? There’s no way to gloss over years of disdain or the critical problems that will affect union members, but at least he’s not joining in the typical blaming of the workers.

So far, he doesn’t seem to have replaced any of his top guys, as a former Ford manager told me he would, but it’s obvious that business as usual ain’t going to work. Kiley said Bill Ford hired Mulally because he couldn’t see anyone in the car business seeing its culture for what it is. Can Mulally budge people mired in their layers of clay? I’m going to stay tuned.

Side note: Ford people nickname the local buildings they inhabit HQ is the “glass house,”
a building in the ring around the Fairlane shopping mall is the “pink palace,” another one is “the blue lagoon.” A pair of buildings is called the “salt and pepper shakers” or, as I think Henry II called it, the “washer and dryer.” .
A low-lying one is called the “Darth Vader.” I call the new I-TEK center the “prison.” Seriously, that’s what it looks like. Do any of those sound like places full of energy and a sense of direction? Mulally’s got a lot of work to do.

2 comments:

erjorge said...

Karen, I like your blog.
But I visit it only when it is cited by another blogger (this time, it was Kevin Meyer at Evolving Excellence).
Is it too much to ask for a RSS feed?

Karen Wilhelm said...

While I look at adding the RSS feature, take a look at the blobaritm box. Put in your email address and you'll get a message whenever there's a new post.

Thanks for visiting.

Karen

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