The Turnaround at Ford

This is from a NYT review of “American Icon: Alan Mulally and the Fight to Save Ford Motor Company.”

In 2008, the Ford Motor Company seemed caught in a death spiral.

The company was hemorrhaging cash — more than $83 million a day — as the bottom fell out of the car market. In late autumn, Ford’s stock price bottomed out at $1.01.

Move forward three years. For 2011, Ford turned a net profit of $20 billion on sales of $128 billion. It distributed profit-sharing payments of about $6,200 to each of 41,600 eligible employees. On Friday, its stock closed at $12.48.

(…)

First, Mr. Mulally knew that Ford could not hope to improve its market performance without simultaneously changing its culture. Some of the book’s most interesting passages deal with his efforts — often one person at a time — to improve accountability and to foster commitment among executives.

Mr. Mulally’s chief instrument here was data-driven management, in which each executive was responsible for consistently knowing and reporting how his — very few women appear in this story — department was performing. Concentrating on consistent metrics, he argued early on, would focus managerial attention on the big picture while increasing transparency.

He eliminated all corporate-level meetings except for two he introduced: the weekly, mandatory business plan review, when the senior team reported its progress on specific goals, and the special-attention review, when executives took up issues needing in-depth consideration. Over time, both meetings — which occurred daily in crucial periods — would become the highway on which Ford’s leaders drove change.

Posted by Eddy Elfenbein on March 31st, 2012 at 7:04 pm

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