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By Bryce G. HoffmanSenior Strategist, fassforward Consulting Group&Author ofAmerican Icon: Alan Mulally and the Fight to SaveFord Motor Company
Three things you can learn from FORD’S TURNAROUND
AMERICANICON
Divided into silos and fiefdoms; unable to take full advantage of its scale
Careerist culture puts personal advancement or preservation ahead of corporate interests
Focus on making excuses and/or assigning blame instead of figuring out solutions
Ford Motor Company
2006
AMERICANICON
No clear vision, mission or plan — or a plan that changes constantly
AMERICANICON
Employees who point out problems and/or suggest solutions are ignored or marginalized
Reports “tweaked” to support the status quo or conceal problems
How many of these describe
YOUR COMPANY?
A brief history of
FORD MOTOR COMPANY
AMERICANICON
“I will build a motor car for the great multitude...constructed of the best
materials, by the bestmen to be hired, afterthe simplest designsthat modern
engineering can devise… so low in price that no
man making a good salary will be unable to own one and enjoy with his family the blessing of hours of pleasure in God’s great open spaces.”
– Henry Ford
AMERICANICON
“A generation ago there were athousand men to every opportunity,while today there are a thousandopportunities to every man.”
– Henry Ford II
AMERICANICON
What
HAPPENED?
AMERICANICON
AMERICANICON
What
HAPPENED?
AMERICANICON
“I frankly don’t see how we’re going to meet the foreign competition.”
– Henry Ford II
100%
80
60
40
20
0
Source: Ward’s Auto
‘60 ‘70 ‘80 ‘90 ‘00 ‘10
U.S. Vehicle Sales
MARKET SHARE
AMERICANICON
2003
FORD TURNS 100
Bill Ford in charge
Declining share
Declining sales
Running out of gas
AMERICANICON
2003 2004 2005 2006
Share % 20.8% 19.6% 18.6% 17.5%
15%
16%
17%
18%
19%
20%
21%
22%
U.S. Market Share
Lets do the numbers...
2003 2004 2005 2006
Units Sold 3,476,022 3,319,484 3,153,670 2,900,911
2.6
2.7
2.8
2.9
3.0
3.1
3.2
3.3
3.4
3.5
3.6
Mil
lion
s
U.S. Light Vehicle Sales
AMERICANICON
2003 2004 2005 2006
Net Income $0.50 $3.49 $2.02 -$12.62
-$14.00
-$12.00
-$10.00
-$8.00
-$6.00
-$4.00
-$2.00
$0.00
$2.00
$4.00
$6.00
$US
Bill
ion
Earnings / Losses
2003 2004 2005 2006
Revenues $164.33 $171.65 $177.09 $156.71
$145.00
$150.00
$155.00
$160.00
$165.00
$170.00
$175.00
$180.00
$US
Bill
ion
Revenues
Lets do the numbers...
AMERICANICON
AMERICANICON
Bill Ford Jr.
AMERICANICON
William “Bill” Ford, Jr.
Aerospace Engineer
Saved Boeing from Airbus,9/11 and its unions
Lexus owner
AMERICANICON
Alan Mulally
ONE TEAM
AMERICANICON
AMERICANICON
ONE GOAL
AMERICANICON
ONE FOCUS
AMERICANICON
“We’re not asking forany federal money.We’re trying to pullourselves up by ourbootstraps and make it on our own.” AMERICANICON
2006
2007
2008
2009
2010
2011
2012
2013
Net Income -$12 -$2. -$14 $2.7 $6.5 $20. $5.6 $7.1
-$16.00-$14.00-$12.00-$10.00
-$8.00-$6.00-$4.00-$2.00$0.00$2.00$4.00$6.00$8.00
$10.00$12.00$14.00$16.00$18.00$20.00
$US
Bill
ion
Earnings / Losses
Lets do the numbers...
AMERICANICON
2006 2007 2008 2009 2010 2011 2012 2013
Revenues $156. $168. $143. $116. $128. $135. $133. $146.
$115.00
$125.00
$135.00
$145.00
$155.00
$165.00
$US
Bill
ion
Revenues
Ford (NYSE: F) Shares
AMERICANICON
Three important lessons:
Culture matters
Message disciplinecan change culture
Alan Mulally’s Secret Weapon: the BPR Process
123
Divided into silos and fiefdoms; unable to take full advantage of its scale
Careerist culture puts personal advancement or preservation ahead of corporate interests
Focus on making excuses and/or assigning blame instead of figuring out solutions
No clear vision, mission or plan
CULTURE MATTERSFORD - 2006
AMERICANICON
Employees who point out problems and/or suggest solutions are ignored or marginalized
Reports “tweaked” to support the status quo or conceal problems
“ONE FORD” CULTURE
AMERICANICON
“Working togetherworks. It always works.”“ONE FORD” CULTURE
AMERICANICON
“We’re going to merge with ourselves.”“ONE FORD” CULTURE
AMERICANICON
“Ford has the talent itneeds to save itself”“ONE FORD” CULTURE
AMERICANICON
“We are going to build carsand trucks that people wantand value”
“ONE FORD” CULTURE
AMERICANICON
“The data set you free.”“ONE FORD” CULTURE
AMERICANICON
MESSAGE DISCIPLINE CAN CHANGE CULTURE
AMERICANICON
WHAT DOES FORD STAND FOR
AMERICANICON
Aggressively restructure to operate profitably at the current demand and changing model mix
The “ONE FORD” Plan
Accelerate development of new products our customers want and value
Finance our plan and improve our balance sheet
Work together effectively as one team
AMERICANICON
AMERICANICON
ONE FORD: One Team, One Plan, One Goal
The BPR System – Alan Mulally’s
SECRET WEAPON
AMERICANICON
AMERICANICON
Business Plan Review (BPR)
“The data sets you free.”
AMERICANICON
AMERICANICON
Your Company Name & Logo
AMERICANICON
PRODUCTS, PROJECTS & PROGRAMS: mm/dd/20yy
If you want change your results, start by changing your culture
Key Takeaways
If you offer your team a clear and compelling vision, they will surprise you with what they are willing to do to achieve it
Use a system like Alan Mulally’s BPR process to identify issues before they become problems, drive accountability, foster teamwork and achieve your strategic goals
AMERICANICON
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AMERICANICON
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