Ford Case

Elevator Pitch

Margaret Mead said: “Never doubt that a small group of thoughtful, committed, citizens can change the world. Indeed, it is the only thing that ever has.” In our case, it’s the world of Ford Motor Company, and the small group of people that turned the crisis around was the Board of Directors together with William Ford that agreed on bringing Alan Mullaly as a new CEO of the company. The controversy around Mullaly’s candidacy arose based on his previous leadership in Boeing, and zero experience in the automotive industry, while Ford was going through a really rough patch (declining sales, weak corporate culture, poor quality, constant loss in market share). The surprising outcome of Mullaly’s lack of experience allowed him to ask simple questions, and look on the manufacturing of the product through a different lance. In his email to all employees, two weeks after running the company, he said that his 3 main priorities are PEOPLE of the company, PRODUCT that suits customer’s needs and lean PRODUCTIVITY. Mullaly realized the big secret that will bring Ford back to the market leadership – its original simplicity created by Henry Ford. He simplified it by uniforming the design of every Ford vehicle, cutting down the number of suppliers by standardizing the parts and focusing on fuel efficient and economy cars.

1. What was Mullaly’s vision for MyFord Touch? Why did it fail?

Mullaly wanted to differentiate the company by introducing new built in Sync software that was welcomed by customers, and did increase sales. But the task of first comer with the new technological feature was more complicated that the company was ready to handle. The rapid changes in technology made MyFord Touch very primitive in comparison. Multiple customer complaints proved that Ford’s innovation backfired. That is not is not really surprising, as the R&D ratio is below 5% for over a decade - lower than its competitors.

2. Was it a good decision to put the company under Mullaly’s leadership?

Mullaly has proved himself as a great leader and strategic thinker. He reinvented the simplicity in the organization and change the corporate culture by embracing the “bad news”. It is really challenging to make any changes in the company of this magnitude, but he has delivered the trust and pride back to its employees.

3. Is there anything that Ford can improve on to maintain the market share?

The company needs to invest more in its R&D sector, as the automotive industry is changing very rapidly, especially when Ford already has a kick start in the hybrid type of vehicle, the new market is shifting towards electric cars. Another important aspect that has shown once again by increased sales is that customers want simplicity when it comes down to their Ford choice.