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Thursday Meetings and Saving Ford
Ford Motor Company has received many plaudits for a stunning turnaround, going from losses of nearly $13 billion in 2006 to an $8.6 billion profit in 2013. This remarkable turnaround came under the leadership of Alan Mulally who was hired away from Boeing in 2006 to keep the iconic Ford from going bankrupt. The reasons for Ford’s success are fairly simple – great management and leadership.
By 2006, the ills of the domestic car industry were well known even to those at GM, Chrysler and Ford. First, they had high levels of debt, in part due to overcapacity. This caused a destructive cycle of pushing sales at large discounts – the sales necessary to feed the resource-hungry plants and overhead. Second, the big three were dependent on SUVs and trucks, a segment about to be ravaged by rising gas prices. Third, the domestic firms could no longer compete with foreign car makers like Toyota and Honda, who could make profitable small and mid-sized cars. Finally, mismanagement led the big three to suffer from devastating legacy costs and union contracts that made the cost to build their cars uncompetitive.
Mulally is credited with many things you would expect for leading a successful turnaround, such as, sound strategic planning, flawless execution, leadership, and culture change. It is the way he changed the culture that can be most instructive for managers of all levels. In fact, the technique used by Mulally is surprisingly simple. It was not only used previously by Mulally at Boeing, but has been replicated by dozens of managers in numerous fields. The weekly Thursday meeting Mulally set up when he first joined Ford was the key process leading to positive change in what had been a very dysfunctional culture.1
Before describing the Thursday meeting, it is useful to consider what Mulally did not do:
Typically, a dysfunctional culture is about behaviors and sentiments that are not focused on getting exceptional results. The context for interactions tends to be primarily competitive or political. A key tool for managers is creating processes to align people cooperatively.
- He did not come up with a new, exquisite plan or vision. Planning was critical for Mulally and he was maniacally insistent on letting it direct efforts and accountabilities throughout the firm – but the basics of his “One Ford” plan had been conceived by Mark Fields before Mulally took over. The dysfunctional systems and processes simply made it impossible to implement the changes necessary to execute plan.
- He did not bring in a lot of new people to his executive team. We hear a lot about having the right people on the bus; Mulally met lots of resistance, but he used processes like the Thursday meeting to overcome this. While some executives left and Mulally was able to poach one Toyota executive to fill a hole, he mostly executed the turnaround with Ford veterans who had been part of the old culture.2
For example, at Ford, corporate meetings were notorious for gamesmanship and side conversations. They were also political in that bad news was rarely shared, and vague communication was rampant. Mulally used his Thursday meetings as a key process to get the real facts of the whole business out in the open, so that the group could work cooperatively on the most important problems facing the company. This enabled the executive team to work together more effectively in tackling company-wide issues that would most aid the turnaround.
What management processes do you employ to help people focus and cooperate so that exceptional results are being achieved? Can you install your own “Thursday” meeting? Here are some guidelines:
Will Ford continue to succeed against stiff competition in the car industry? (As of this writing, Mulally recently retired.) Ford's ability to stay competitive will depend considerably on the ability of its executives and employees to cooperate in ways exemplified by Mulally's insightful Thursday meetings.
- This process can be implemented at about any level. At any level where people must cooperate effectively to achieve results, the person in charge can set up processes such as a Thursday meeting to effectively organize people. The clearer the focus, the more effective the interaction. Note that Mulally was in charge of his executive team and he changed their culture. Interestingly, many of those executives started having their own weekly meetings that were focused on specific areas of the company.
- In conceiving your meeting, think about the essential elements of cooperative organization. First, think about the goals or common end for the meeting. For Mulally it was to get his executives to look at the whole enterprise, non-functionally, to share real information (no secrets), and to help each other. Your purpose should be well thought through and commonly understood.
Second, seek commitment and reinforce the behaviors you seek. Expose behaviors that interfere with the common end as deviant – like Mulally's sanctioning of side conversations, Blackberrys and derisive jokes. At first, you will have to be persistent in reinforcing a cooperative context, because people often resist. Finally, make sure effective communication is taking place – when people get vague and abstract, cooperation should demand clarification. Ask the questions that will point people to greater clarity.
- Don't organize people in a vacuum – planning and purpose must occur first. The manager must know what the desired results are and what outcomes need to be accomplished. Mulally would preface every meeting with the shorthand strategy that they were implementing.
- If you are seeking to change culture, expect that it will take some time, maybe several meetings, before you see changed behaviors. But the process can be very effective, and others will soon begin reinforcing the more effective behaviors – it does not require you to change the company. While Mulally changed the culture of his corporate executives, it was those managers and other managers who helped change how other units operated. You can change the culture of your unit regardless of the “company” culture.
- Obviously, the meeting does not have to be on Thursday! Choose a day and time that make the most sense. Surprisingly though, Thursday is a popular day for many successful managers (consider the pseudonymous MacGregor!).
1See “G.M.’s rival could teach it a lesson” by Joe Nocera, New York Times, June 27, 2014.
2See Bryce Hoffman’s excellent book, American Icon: Alan Mulally and the Fight to Save Ford Motor Company (2012). He gives great detail on how Mulally ran his meetings.
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