Six Lessons for Ford
Jacques Nasser was a supernova of a CEO. He exploded on the scene, shone brighter than all the other stars in his universe, then abruptly snuffed out. It was weird. Anyone who met Mr. Nasser before he made CEO knew he was destined to rise to the top of the Ford Motor Co. He was bright, worldly and highly experienced. He could be disarmingly candid and enormously charming. He seemed the perfect executive
Jacques Nasser was a supernova of a CEO. He exploded on the scene, shone brighter than all the other stars in his universe, then abruptly snuffed out. It was weird.
Anyone who met Mr. Nasser before he made CEO knew he was destined to rise to the top of the Ford Motor Co. He was bright, worldly and highly experienced. He could be disarmingly candid and enormously charming. He seemed the perfect executive to lead the company into the 21st century.
Many others say there was another side to Mr. Nasser, that he could be cold, distant, and ruthless. So what? That's been said about a lot of great leaders.
But there was an important difference in this case. A significant number of employees and stakeholders at Ford ended up hating Mr. Nasser. And I don't use that word lightly. They truly hated him.
That alone is disturbing enough, but more importantly, Ford has to ask itself how it allowed so many things to unravel under Mr. Nasser's watch.
Quality is now last among the largest automakers, thanks to embarrassing recalls and botched new car launches. This from the company that for years used the tag line “Quality is Job One” and was the first to embrace the principles of renowned quality consultant W. Edwards Deming and his famous 14 points.
Manufacturing productivity is sliding backward. This from the company that historically led the American auto industry in all areas of the Harbour Report.
Its debt rating was just lowered by Standard & Poor's. This from the company that had the strongest balance sheet in the industry.
Market share, margins, dividends, profits — the list goes on and on. And don't even get me started on the failing e-commerce ventures or the unproductive non-core acquisitions.
Some say Mr. Nasser had too many people reporting to him, and that he felt compelled to micromanage their operations. That may be true, I don't know. But in thinking about Mr. Nasser's tenure, six observations come to mind that the board of directors ought to consider:
It's easier to fix an operation than it is to lead it.
Many executives make their way up the corporate ladder taking on assignments to turn around ailing operations. They're able to restore them to profitability in a year or two by concentrating on business fundamentals. Typically, these fast-trackers are on to their next assignment before the long-term effects of their efforts have fully played out. Many times the effects are fine, but just because someone is a good fixer-upper doesn't automatically mean he'll be a good leader.
People want to be led, not forced. If you can't lead them, maybe you have a leadership problem.
Some executives are tempted to believe that if they can't get quick results, the problem is with employees who “don't get it.” They believe that getting rid of these employees will give them a free hand. This can be true in individual cases. But when big chunks of your workforce “don't get it” they are probably not the problem.
Beware of big reorganizations, especially at successful, profitable companies.
Abrupt changes almost always affect a successful organization negatively. If it's a money-losing organization, that's one thing. But, like the saying goes: If it ain't broke, don't fix it. An expert in corporate reorganization once told me it typically takes three tries and around 15 years before most companies successfully pull one off. The GM reorganization of 1984 is a perfect example of this problem.
Changes in corporate culture don't come quick, or easy.
People are very resistant to change and take a long, long time to adjust to it. Give them time to learn their new environment and don't try to force them to change too quickly. Every time you think it's going too slow, re-read rule number two.
Pick your targets carefully, and don't pick too many.
Nasser involved too many employees in too many programs. They became distracted from designing, engineering and building great cars and trucks. He also embarked on too many new business ventures that distracted Ford management and spread it too thin.
Never, ever forget your core business.
And never siphon off resources from your core business to get into something new.
Ford is going to have to take a long hard look at how its staff system put the wrong person in the top job. Even more importantly, it's going to have to ask itself why it didn't catch the problem sooner, or do something about it earlier. These problems didn't happen overnight. As I wrote in this space two years ago, the warning signs were already there (see WAW — Jan.'00, “Jac Be Nimble, Jac Be Quick”).
I've seen Ford get into trouble in the past. I've seen it climb out of some deep holes and come out stronger than before. No doubt Ford will do it again. But the company needs to figure out how it became entangled in such a mess and then put the procedures in place to make sure it never happens again.
John McElroy is editorial director of Blue Sky Productions and producer of “Autoline Detroit” for WTVS-Channel 56, Detroit.
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