Two-way Communication Helps Fuel Ford's Resurgence

Linda Dulye's picture
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FordLogo.jpgWe recently read a feature in The Economist on Ford Motor Co.'s rebound and were intrigued by anecdote recounted in the article's opening paragraphs. In the fall of 2006, incoming CEO Alan Mulally held his usual staff meeting and asked the team how things were going. The response was that everything was going fine.

"We are forecasting a $17 billion loss and no one has any problems!" an incredulous Mr. Mulally exclaimed. When he asked the same question the next week, Mark Fields, head of Ford's operations in the Americas, raised his hand and—in what once would have been a moment of career suicide—admitted that a defective part threatened to delay the launch of an important new car. The room fell silent, until Mr. Mulally began to clap his hands. "Great visibility," the new boss added.

Four years on, Ford is making record profits. Its revival began with this new willingness to recognise its faults. In the old days management at Ford was preoccupied with executive rivalry, recalls Mr. Fields.

"Now it is about who's helping whom," he says. When Mr. Fields stuck his hand up at that meeting and won Mr. Mulally's approval, colleagues soon began chipping in with helpful suggestions to overcome the problem with the new car.

In an industry where change happens at glacial speeds, Mulally was asking -- if not demanding -- his team to abandon its legacy mindset, because it clearly hadn't worked in the past. This example demonstrates that an environment in which feedback and two-way interaction is expected can create a domino effect of positive change companywide.

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