I can’t believe I’m about to defend Ford. I’m not a huge believer in the Way Forward, it sounds like a bunch of hype and spin. What Ford (and GM) should work on is designing popular cars that customers will pay a premium for AND improve the operational efficiency through lean. Neither of these things are a 90 day or even a one-year initiative. So, if they are doing the right things, I would cut them slack. Constancy of purpose, you know?
I wrote yesterday that I wouldn’t take lean advice from a software CEO. I’d be LESS likely to take lean or manufacturing advice from Wall Street. I attended an MBA program, but I was in the minority for focusing on manufacturing and leadership. Most of my MBA classmates didn’t learn much of anything about operations. If they did, they learned that costs were bad, keep machines utilized, and get rid of as many people as you can. Oh, and sell online (this was 1998 and 1999, mind you). They were too busy studying finance and strategy (cooking the books and “strategery”, you might say).
So, when I read “advice” from Wall Street, I picture a 34 year-old analyst who has never worked in manufacturing and probably drank too much during business school because he was already “set” for just getting into a top school. That’s my stereotype, I’m sorry. They know how to crunch numbers and analyze reports, but building spreadsheets ain’t the same as building real products.
“Ford is doing a good job of talking about what needs to be done, but I don’t know that they have the same depth of commitment to it that GM does,” said Pete Hastings, an analyst with the investment company Morgan Keegan & Co.
Since announcing its own restructuring in November, GM has sold a controlling stake in its finance arm, sold off shares in Suzuki Motor Corp. and Isuzu Motors Ltd., cut executive salaries, halved the company’s annual dividend and offered buyouts to all of its 113,000 U.S. hourly workers.
GM plans to cut 30,000 jobs and close 12 facilities by 2008.
I don’t know the first thing about Pete Hastings. He’s probably a smart guy and probably works hard. But saying that GM is the model to follow because they are cut, cut, cutting their way through the corporate death spiral… that’s just a bit too much to take.
“Depth of commitment” would mean something different to me. Depth of commitment is doing the right things for your customers, your employees, and your suppliers. Depth of commitment is continuous improvement, as Toyota has taught us. “Depth of commitment” to the analysts means cutting as fast as your other bad competitor rather than trying to learn from the good one.
Isn’t there some focus anymore on being more efficient? On getting lean? Let’s just cut, slash, and burn to make Wall Street happy. Great. Wall Street was never about building great companies, it’s about the numbers and making this quarter.
It’s not just Pete, another analyst writes:
“Merrill Lynch analyst John Murphy said Ford suffered from a drop in sales, lower margins per vehicle and higher costs in the first quarter. Implementation of the restructuring plan has been too slow, Murphy said in a note to investors.”
You might just wonder what kind of education it takes to sit on the sideline and spout obvious things like “lower sales are bad” and “move faster.”
I bet Mark Fields, Harvard Business School graduate, wakes up and wonders why he’s actually trying to lead people, actually trying to run and turn around a company. Even if I take shots from the sidelines, I respect what he’s trying to do. He could probably make more money sitting on the sidelines, just taking shots at others.
So, I guess the Mark Graban hierarchy for leading a manufacturing company is:
Manufacturing MBA > General Management MBA > Software CEO > Wall Street Analyst.
Sorry for the math symbols there. I did go to MIT.
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