Executive Briefings

Ford Demolishes Silos That Stalled Its Drive to Profitability

Soon after Alan Mulally arrived as Ford's chief executive in 2006 he organized a weekly meeting of senior managers and asked how things were going. Fine, fine, fine, came the answers. "We are forecasting a $17bn loss and no one has any problems!" an incredulous Mulally exclaimed. When he asked the same question the next week, Mark Fields, head of Ford's operations in the Americas, admitted that a defective part threatened to delay the launch of an important new car. The room fell silent, until 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 recognize its faults. In the old days management at Ford was preoccupied with executive rivalry, recalls Fields. "Now it is about who's helping whom," he says. When Fields won Mulally's approval, colleagues soon began chipping in with helpful suggestions to overcome the problem with the new car. It was more than a symbolic moment for a business which used to be run like a collection of principalities rather than a global enterprise. As far as Mulally is concerned, demolishing those management divisions has been the most important factor in turning Ford around.

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Soon after Alan Mulally arrived as Ford's chief executive in 2006 he organized a weekly meeting of senior managers and asked how things were going. Fine, fine, fine, came the answers. "We are forecasting a $17bn loss and no one has any problems!" an incredulous Mulally exclaimed. When he asked the same question the next week, Mark Fields, head of Ford's operations in the Americas, admitted that a defective part threatened to delay the launch of an important new car. The room fell silent, until 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 recognize its faults. In the old days management at Ford was preoccupied with executive rivalry, recalls Fields. "Now it is about who's helping whom," he says. When Fields won Mulally's approval, colleagues soon began chipping in with helpful suggestions to overcome the problem with the new car. It was more than a symbolic moment for a business which used to be run like a collection of principalities rather than a global enterprise. As far as Mulally is concerned, demolishing those management divisions has been the most important factor in turning Ford around.

Read Full Article