By January 9, 2007 5 Comments Read More →

Mulally: Toyota Good (Once Again)

Mulally Pans `Paranoid’ Ford, Pushes Toyota-Style Production

I criticized Alan Mulally earlier, via my criticism of Boeing. To be clear: I respect Mulally. I am really rooting for Alan Mulally. Mulally is such an outspoken promoter of the Toyota Production System, I want him to succeed. I want him to become the Jack Welch of Lean… having success with Lean and helping it hit the mainstream (where hopefully people adopt lean the right way, but that’s a different post for another day).

Mulally praises Toyota every chance he gets. The problem is that he’s the CEO of Ford (or “Ford’s” as we said back in southeast Michigan). I’m rooting for Mulally, the CEO, more than I’m rooting for Ford, the company. I’m rooting for Lean via my rooting for Mulally.

I think he has the right gameplan, focused around Lean, but I just hope that Mulally doesn’t make too many enemies within the Ford power structure, or I’m afraid he won’t have a chance to succeed. Will Ford employees rally behind him or turn on him? When Mulally says “Toyota Good” do Ford workers only hear “Ford Bad?”

When Mulally says things like this (from the Bloomberg article), he might be right, but he might also stir up a lot of resentment within the Ford ranks if he’s not careful.

  • ‘Alan Mulally didn’t mince words in describing the guarded flow of information inside Ford Motor Co. as he left a media dinner in Dearborn, Michigan, last week. The company, he said, “is so paranoid.”’
  • At Boeing, Mulally admired Toyota’s production system more than 30 years ago. He’s following the same pattern at Ford.

    The phrase he repeats most often about Toyota is that the automaker strives to “deliver the customer what they want with minimum time and minimum resources.”

    “You can take that to the bank,” says Mulally. “Everything ought to be based on that.”

  • “The finest machine in the world, the finest manufacturer in the world, is the Toyota production system,” Mulally says.

At least this quote was from Jeff Liker (check out my podcasts with him here), not Mulally:

“In terms of lean production, Toyota is like a luxury cruise ship, and Ford is like a dinghy with a leaky floorboard,” said Jeff Liker, a University of Michigan engineering professor and author of “The Toyota Way,” published in 2004. “Ford doesn’t have a chance to catch Toyota.”

Again, that last quote was NOT Mulally. Nobody is mincing words right nowadays, eh? At least Mulally won’t go as far as Liker, in his rhetoric. As CEO, he has to publicly believe that Ford can turn around. But, he doesn’t have all the time (or cash) in the world.

It fascinates me to see how CEO’s and leaders talk. Most CEO’s never talk about what’s wrong, they puff their chests out and talk about how great things are (and what great leaders they are). I remember Kodak’s old CEO, George M.C. Fisher, told a group of us MIT students in 1998 that he NEVER would mention a competitors name. That was his policy. Mulally not only mentions Toyota, but he praises them. Fisher never talked about how great Fuji’s film was (yes, this was in the film era, I’m getting old). I don’t know how much stock to put in Fisher’s advice since he didn’t see digital coming fast enough and he has been on GM’s board for many years.

Anyway, the talk from Mulally reminds me of our NUMMI-trained plant manager who was brought into the GM engine plant where I worked. He came in back in 1996 and surveyed the plant, walked the “gemba”, talked to people, and looked at data. He called an “all hands” meeting (union AND salaried) to make the case for lean, ahem “competitive manufacturing” (“lean” was a dirty word with the UAW).

He laid out the data… safety, quality, cost…. he had hard data that showed:

  • Our plant was the worst in the engine sector
  • Engine sector was the worst part of GM Powertrain
  • GM Powertrain was the worst part of GM NAO
  • GM NAO was the worst performing part of GM Global
  • GM was the worst performing auto maker
  • The auto industry had the worst financial returns of major industries.

We were (and he said it like this, with an overhead slide spelling it out):

“The worst of the worst of the worst of the worst.”

There might have been another “worst” in there. The data were right. The plant manager was right, intellectually. Allan Mulally says he is “data driven.” Mulally’s data is right (I believe).

The meeting wasn’t even over yet and the UAW had fliers printed for the masses.

“Your management just called you the worst workers in the world.”

For one, that’s NOT what was said. Management was laying out an honest case and they blamed… THE MANAGEMENT SYSTEM. He talked about how the new “lean” management system would take the same workers and the same factory and we’d all be successful together. But, the union twisted it… and it took quite some time to recover from the political fallout.

The good news is that the plant was quite successful with lean over the next few years, although the plant has had its recent hard times documented in the NY Times.

My point with Mulally? He may be data driven. He may be right. That doesn’t mean that his praise for Toyota won’t come back to bite him at Ford.

I hope he’s successful. I hope he’s successful with lean. I just wish he’d shut up about Toyota already (with all due respect). Mr. Mulally, I think you’ve already made your point.

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Mark Graban's passion is creating a better, safer, more cost effective healthcare system for patients and better workplaces for all. Mark is a consultant, author, and speaker in the "Lean healthcare" methodology. He is author of the Shingo Award-winning books Lean Hospitals and Healthcare Kaizen, as well as The Executive Guide to Healthcare Kaizen. His most recent project is an eBook titled Practicing Lean that benefits the Louise H. Batz Patient Safety Foundation, where Mark is a board member. Mark is also the VP of Improvement & Innovation Services for the technology company KaiNexus.

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5 Comments on "Mulally: Toyota Good (Once Again)"

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  1. Anonymous says:

    The fact that you’re “rooting” at all is the problem. Taking opinions in the politics of Lean is a blogger’s role, but its a luxury that a successful consultant doesn’t have.

    Think “What Would Ohno Do?” I dont think he’d root for/against anyone, he would root for more productivity, no matter who it is.

  2. Mark Graban says:

    I’m writing here as a blogger, not as a consultant. What’s the problem with me rooting for Lean success? For Mulally? That clouds my analysis? My judgment?

    You’re in a position to say WWOD? What Would Shingo Do? What’s your answer? Ohno wouldn’t root for a lean company? Why? Because he was a Toyota guy? I don’t understand.

  3. Anonymous says:

    I think Mulally needs to keep pounding this message to the ranks and fellow leadership. Remember the mindset or personality. Automotive is an old industry with an old culture. They don’t like criticism. ‘If there were a better way to get things done why wouldn’t we be doing it!’

  4. Mark Graban says:

    As a friend emailed today, people fear change and they fear criticism. Sure, Mulally needs to shake up the status quote, but he can’t afford to have Ford people tune him out either.

    Did Ford people NOT know that Toyota is the best in the world?

    Is that what’s been holding back Ford, lack of knowledge? More likely, it’s unwillingness or inability to change. Quite a challenge for Mulally and for Ford.

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