tl;dr: In a riveting discussion, Ford CEO Jim Farley and Uber CEO Dara Khosrowshahi delve into Lean principles, cultural shifts, and operational challenges. From crisis management to employee respect, discover how these transportation industry leaders are transforming their companies. A must-read (or watch) for those interested in Lean, leadership, and innovation.
It's time to review and discuss another video from the event put together and shared by GE: The Lean Mindset.
In this post, I'd like to share some highlights of a session that was a conversation between two transportation industry CEOs — coming from companies with a very different history and focus: Jim Farley from Ford and Dara Khosrowshahi from Uber.
Jamie and Flinchbaugh also discussed this video (and one other from the event) in our upcoming Episode #42 of our “Lean Whiskey” podcast series. It should be out Friday.
Highlights and Thoughts
Dara was there on stage in New York, but Jim chose to stay in Dearborn because of the ongoing labor talks with the UAW (and this was on September 6, before any of the strikes began). But Dara and Jim had a good rapport as they have clearly worked together on collaborations to get more Ford electric vehicles to Uber drivers.
I'm only working from my notes, not a transcript.
Crisis at Ford and the Differences From Toyota
Dara asked Jim, who worked for 17 years at Toyota to start his career, “How did you have to adjust Lean coming into Ford?”
After discussing the “divorce from my family” over joining Toyota (since he came from a family of Ford workers, including a grandfather who was an hourly worker), Jim felt drawn an opportunity to save the company during the 2008 financial crisis era. He's also a cousin of the late comedic actor Chris Farley, by the way.
Jim said he couldn't “just impose the Toyota system on Ford… it would take too much time.” He described Toyota as a “bottom-up company” where “… as you get more senior you actually do less because the bottom runs the place.” In comparison, Ford was “the complete opposite” in being “a total top-down culture.”
“Lean is such a big bet for us, it's non-negotiable.”
As CEO, part of Jim's job is to “define operating behaviors that are not natural for the Ford team,” to “ask the Ford leaders to model these behaviors and live it.” He is “evaluating the top 500 leaders to see if they can do this… or leave.”
Jim then asked Dara, “How did you get culture change going at Uber?”
Crisis and Culture Change at Uber
It was a “huge crisis moment” when Dara joined, with a company mired in scandals and a founder / CEO who had been fired (or forced to resign).
Dara instituted a mantra and driving principle:
“Do the right thing, period.”
He added that leaders are putting our trust in each of you (employees) to understand what doing the right thing means – with that responsibility, we're giving that to you – there's no handbook of what the right thing means in every situation.
Dara noted that the old culture was focused on growth. One example of the “right thing” was to slow down the new driver onboarding process to institute better background checks. An emphasis on safety slowed growth and “hurt the business financially,” but it was a leadership demonstration of doing the right thing. Uber would be better off, I'd say, for it in the long term.
It wasn't cited, but it makes me think of Principle #1 of “The Toyota Way“:
“Base management decisions on a long-term philosophy, even at the expense of short-term financial goals.”
Many companies say they are “implementing Lean” or maybe even that they're copying Toyota, but fewer are able to really embrace the first principle. And we wonder why many companies struggle with Lean?
Respect for Workers at Ford
Dara mentioned Lean and respect for your workers, asking Jim, “What does respect look like at Ford?”
Jim talked about visiting every factory and honoring workers, going to the “Gemba” in non-superficial ways”–to “really learn.”
“Without our workers, we are nothing… and they don't have a say in the big decisions we make.”
He described how it was 130 degrees F the day before inside the Ford Kansas City plant. Surprisingly, I found nothing in the news about that. Jim said it “sounds really weird to talk about” the conditions of the bathrooms and cafeterias, but the “dignity of the workplace wasn't acceptable,” including dirty bathrooms and a lack of hot food in the cafeteria post-Covid.
Instead of blaming workers for quality problems (as GM used to do when I worked there in the mid-1990s), Jim asked, basically, why it's so difficult to do it well:
“Why do we have so many rework bays for the Bronco tops and why are those so hard to assemble?”
Jim seemingly points to the broad system that leads to quality (or not), including product design and the interface to process design. It would be easier (but incorrect) to blame the workers instead of taking responsibility for it.
Dara as Undercover Boss at Uber
Jim asked Dara what inspired his “Undercover Boss” moment, where he started delivering for Uber Eats on a bike and driving Uber riders in a Tesla.
Jamie Flinchbaugh and I discussed this (or what we had read about in the news) in a recent episode of “Lean Whiskey”:
Earlier, I thought that the time spent working on the frontlines was either a P.R. stunt or, at worst, a distraction from his real job as CEO. Why must the CEO discover problems that are being reported by the real front line workers?
I got a more positive impression from Dara's remarks at the live event. He pointed out how very few Uber employees actually used the apps for driving or delivering. There wasn't as much pride in the contractor apps as there was in the consumer apps for ordering or riding. So Dara was trying to set an example. It wasn't just about him as CEO doing this, but inspiring others to follow his lead and to better understand the situation of their contractors (and not just managing by KPIs, as Dara added).
From Defensiveness to Improvement
Jim said that people at Ford were “defensive at first” and protested, “There's no waste in our plants.”
That's, of course, very unlikely. That's the case even though Jim might be the fifth Ford CEO who has kicked off some sort of Lean effort. Maybe it works and sticks this time with a CEO who came from Toyota.
“People don't say that [there's no waste] anymore.”
If admitting problems, such as the waste, leads to help and improvement instead of blame and punishment, it would be easier for people to admit such things.
“Our Lean journey has been relatively new.”
Dara added that Uber has “processes for reducing waste” aimed at processes like making the driver onboarding process more smooth. “What's harder is eliminating processes that no longer serve the company well,” said Dara, adding that “the process should be serving the company, rather than the company serving the process.”
Uber also has a process for auditing to see if processes should still exist. Why improve something that should be eliminated?
Sharing a final theme, Jim talked about Ford's efforts to benchmark their plants not by managing KPIs, but by actually taking groups on bus tours to go and see — and to learn. That's “been transformational” for Ford, Jim said. He added, “Our current stuck moment is problem solving. Ford is world class at describing the problem. But actually finding root cause… over time, people are not getting better at that over their careers.” So they need to work on that.
If a team is not denying problems, talking them to death can be another problem. As Jim advises,
“Don't describe the problem beyond the sufficiency of Root Cause Analysis.”
What do you think about all of that? Please leave a comment on the post below. And thanks again to GE for this event and the invitation to be there!
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