Ford’s Resurgence Due to Less Blame-y Culture?


Mark's note: It's great to welcome Andy Wagner back to the blog. Read his older posts here.

General Motors, Chrysler, and Toyota have been dominating the headlines in recent months with their financial and, now, quality troubles, while some surprising things have been happening to the Detroit Three's perpetual number two player: Ford.  The company posted profit in 2009 and expects to end 2010 with its second profit after three years of loss, despite an economy that's still stuttering.  Lincoln claimed the top spot on JD Power's Dependability Survey, sharing it with Porsche.  The  2010  Motor Trend Car of the Year  was the  Ford Fusion, a car quickly gaining on Accord and Camry in sales, boasting a hybrid version with best in class 41-mpg  fuel economy. Now Ford shares are at a five year high on Wall Street.

At the heart of the turnaround: Toyota fan and Ford CEO Alan Mulally.

There's no doubt that Mulally's turnarounds at Boeing's Commercial division in the 1990s and Ford in recent years involved a healthy dose of disrespect for people: layoffs, plant closings and wage cuts, but what has emerged in both cases is a company where people are engaged and focused on solving problems to give customers the value they want.

Listen to Mulally's own words, describing his “no blame” approach to elevating problems and engaging people in this Washington Post video (it's only about 3 minutes).

Be your own judge, but I hear echoes of Dr. Deming.

Disclosure: My father's a Ford retiree after 37-years of service.  My brother bought Ford stock at $2/share and “feels like he hit the lottery”.  I was born in Dearborn, MI and there's probably something in the water.

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  1. Jamie Flinchbaugh says

    Great post. A lot of interest was generated with Alan joined Ford, but many were expecting a lean manufacturing revolution. But in fact, Ford’s deepest problems were not in manufacturing. They were in the Glass House (HQ) and in product development and in strategy (such as buying junkyards all over the country only to figure out that the biggest part of making a junkyard successful is dealing in cash and not paying all your taxes).

    Alan focused on corporate culture. He changed reporting structures to improve communication and changed meeting protocols to focus more on listening and raising issues, rather than explaining them away. My argument was that this is the role of a lean leader in the CEO’s chair, not just to go to the manufacturing site and walk around.

    Ford’s been slowing making progress. They still have a couple of big problems hanging around their neck, because they didn’t go through bankruptcy they didn’t clear up their union contracts and they didn’t purge their dealership network. But they are heading in the right direction.


  2. Jack Lasley says

    It’s too early to judge. Lets see how Ford is doing in lets say two years. In my opinion the economy must show sustained improvement before anyone can be judged on their success.


  3. Andy Wagner says

    Certainly too early to judge, but as we learn from Toyota et al, the right process will yield the right results. This is the best sign in years that they have the right process.

    Jaime is certainly on to something here. To the extent that a Toyota factory is “leaner” than Ford or GM it has a lot more to do with the messages coming from the Glass House and the Ren Cen than a lack of gemba walks. Ford in particular has long been dominated by a culture that pitted execs against each other for the favor of “the family.”

  4. Mike Sporer says

    I saw a similar with him interview a while back. “Blameology” is not a Mulally trait. A blame environment creates big CYA. I suppose Ford finally learned that!
    .-= Mike Sporer ´s last blog ..Leveraging Limitations =-.

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