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Friday, December 21, 2007

"It's My Way or The Highway" - An Inward Case Study

It's always at this time of the year where I reflect on the year's best examples of companies that have set (or tried to) implement strategies based around internal branding and team alignment. Even though this year we saw some big names take on tough internal branding issues, one of the best examples that keeps coming to my mind was one which we reported on 2 years back at Ford Motor Company. Although it involves the actions of a CEO who is no longer serving that role, the principles behind the story hold true for many companies today. In case you missed the original report, here's a copy below.

Also, I want to take this opportunity to wish everyone a very happy holiday from all of us at Inward Strategic Consulting. We wish you peace and prosperity in the New Year and hope to work with you soon.

-Allan Steinmetz

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An Inward Strategic Consulting Case Study Example:

"It's My Way or The Highway"

Ford Motor Company CEO Bill Clay Ford tells employees he's serious about changes, but is this the right strategy to get your employees enrolled and on board with a company's new vision? Inward Strategic Consulting takes a closer look at the actions and reactions of this aggressive strategy.

Last week, William Clay Ford Jr., sent a company wide email and voice mail to all employees stating that those who could not support the company's drive for innovation should find something else to do.

"Anyone who thinks or attempts to convince you that it's business as usual at Ford is wrong and would best serve us all by pursuing their interests elsewhere," Ford said in an audio e-mailed message. Ford continues in the email message, "Our heritage of innovation must be reclaimed and renewed or the greatness of our company will become part of our past. It's that simple."

According to Bryce G. Hoffman of The Detroit News, which first broke the story, Bill Ford has said he wants to marshal all of the automaker's manpower and resources to transform it into a more innovative and environmentally friendly company.

But will he encounter some skepticism from employees who have been through numerous restructuring efforts already?

Let's look at the premise, action and reactions of this aggressive strategy:

Premise:

  • Ford Motor Company is going through a major restructuring, and they need to have everybody on board.
  • Bill Ford's comments come as the automaker prepares to eliminate 4,000 salaried positions by the end of March.
  • Mark Fields, recently promoted as head of Ford's Americas division, sent an internal message to employees calling on staff members to fall in line behind Bill Ford's banner of "innovation".
  • In the accompanying e-mail, Bill Ford told employees Monday that the message was the first in what will be a series of less formal communications he has dubbed "Ford on Ford."
  • In the message, Ford stressed that the company's efforts were not a case where it would "quickly declare victory and move on." Nor was the effort simply a marketing campaign, said Ford, who talks about the push to be innovative in the company's latest television ads.

Actions by management:

  • "Getting the right people working together as a team will be one of my first priorities," according to Mark Fields. "The most successful businesses in the world have a group of individuals that know how to create as a team."
  • Bill Ford also announced a new Web-based system that allows employees to submit ideas directly to his senior management team. It asks employees to classify their ideas as technical innovations, business improvements, operational efficiencies, competitive advantages or ways to improve relations between the company and its workers, suppliers or customers. Some industry insiders report that the Web site also asks employees to rate the potential impact of their ideas. Are they on par with the sort of innovations that made Ford great? Will they change the lives of consumers? Will they open new markets? Will they lead to industry-firsts or improve Ford's competitive position? Ultimately, employees reach a screen that lets them type in an outline of their proposal or submit a previously prepared document.

Reactions:

  • According to David Cole, chairman of the Center for Automotive Research in Ann Arbor, these dispatches from the top are seen as "a renewed attempt by the great-grandson of Henry Ford to assert control over the company that bears his name."
  • Creating a system that allows employees to directly submit ideas to senior management can have obstacles. "Sometimes our bureaucracy can be ponderous and not always receptive to a different approach," Bill Ford said.
  • "The bureaucracy at any company is a tremendous challenge. You want to shake it to the roots in a period like this. That's what he's saying: We're going to change." said David Cole.

My question, "Is the Ford Motor Company doing and saying the right things?" A good part of my professional life was tied to the Ford Motor Company when I was a Senior Vice President at Y&R Detroit working on the Lincoln-Mercury and the Ford corporate advertising accounts. I have great affinity for their management and products and believe it is in our economy's interests for them to be successful.

So I decided to offer some observations, advice and insights from our seven years of change management experience to guide Ford go down this new path.

Personally, I think they are on the right track. However, like any good change management initiative, they need a framework and process to manage this communications dilemma.

  • First and foremost, Ford is correct in having their CEO, William Clay Ford Jr. lead the initiative and be the internal and external spokesman. This strategy demonstrates internally that the senior management is engaged, serious and involved in this change and has not abdicated or delegated the task to more junior executives. As a result, employees will view the change as more substantial, real and endorsed by management. However, sometime in the future Ford employees should take over from the CEO and become the spokespeople both internally and externally.
  • It is not enough to simply inform employees that the company is going through change and is embracing a new strategy focused on innovation. The next step is for Ford to have a four step sequential communications plan and change process in place that goes from:
  1. It starts with informing the employees (which they have already done), through effective internal communications. Basically, the CEO has went public first and told the employees second. If this is what he has done, it may have been a mistake. The CEO should have communicated to the staff first to tell them what the company was doing, why it was important to the company's future and what it means to the individual employee in broad terms. He should have gone public only after he has informed his own people. Going public first and then internally second generally causes mistrust and skepticism, that the change is just another marketing campaign. This may explain why his statements were so strong on Monday, perhaps to address some of that skepticism.
  2. The next step of the process is educating employees as to why this change is important for the company and to them as individuals. This requires different communications techniques such as experiential communications, training/workshops and events. Often it takes time and is too slow which is why many corporations skip this step. It would appear that Ford has taken the quick route and may have skipped over this step too. We advise clients that sometimes you have to go slow, so that you can go fast later. That is what communications process and discipline bring to the table.
  3. The third step in the process is motivating people to change their behavior and embrace new activities that support the change. This is achieved by articulating what you want them to do differently. After all, if you don't tell them how to change, people won't when left to their own volition. Bill Clay Ford Jr. has come out strongly in this regard by outlining the consequences of not changing. Public firings go a long way at demonstrating that the company means business. Also saying clearly what behavior/actions will not be accepted or tolerated makes it very clear what behavior is within the scope and which is outside of the scope. It also creates peer pressure momentum to act accordingly and do the right thing and be a team player.
  4. The fourth step is to establish a program for reinforcement and recognition. As people embrace the change, adopt new behavior and contribute to the results the company aspires to, it is imperative that the company recognizes and rewards these individuals and results through celebratory encouraging communications. At Ford, that means changing the incentive compensation system to support innovation and new ideas, promotions and advancements should be based on performance and individuals contribution to innovation. Best performers should be recognized publicly with proclamations and spot bonuses. Recognition and rewards should not be done arbitrarily, but rather, in a systematic drive and communicated fashion so that people understand what they need to do to meet these new evaluation criteria.
  • Next major area to consider is having a message architecture, which means saying the right thing to the right people at the right time. Anything the company says should be timed to the sequence of the overall framework. Here are the four types of messages:
  1. Informing messaging should be general announcements such as what the company is planning and why and when the change will occur and end. (Value Message)
  2. Educating messages should be thoughtful and provide explanations and details in regard to what is in store for the company, the group/division and for the individual. (Benefit Message)
  3. Commitment messages should specifically tell people what behavior is expected to help contribute to the change and what behavior will not be tolerated or accepted. (Attribute/Action Messages)
  4. Reinforcement/Reward Messages should be celebrations and demonstrate the logic and provide answers to why the company is doing this, why it is important to change, here is what people are doing to embrace the change and this is how we are recognizing people for their support. (Full statement messages)
  • William Clay Ford Jr. and the management team can't achieve their goal on their own. They need to build an employee's movement that empowers peer pressure to support for his agenda. Establishing a change ambassador group that represents a cross section of people around the world that has the responsibility and authority to become champions of change do this. These are the people other employees come to get answers to their questions, who are opinion leaders and respected by their peers. The faces of these employee champions should be the ones delivering the message internally and externally after the CEO.
  • Not so long ago, in 1980, Ford launched another major change initiative to improve quality of its vehicles, which were rated poorly in comparison to imports at that time. In fact, I remember hearing focus group respondents say that FORD was an acronym for Fix Or Repair Daily. The company launched a new mission to improve quality and make it their number one priority. They first met with employees, UAW representatives, suppliers and dealer groups to make them aware of the problem. Next, they had seminars and workshops with employees to instruct them on how to improve quality on the assembly line and at the dealership. They were made accountable with new metrics and quality performance standards.

After Ford started seeing real improvements in quality and felt confident it would continue, they launched a very engaging corporate advertising campaign with a slogan "At Ford, Quality is Job1". It showed employees on the assembly line and dealerships saying that it was their responsibility to insure that quality was the company's top priority with the rallying cry, "Quality is Job1". The entire change effort worked. It improved quality in reality and perceptually. The lessons of the Job1 effort should be applied today to Ford's innovation mission. Start with your people, inform and educate them about the problem. Capture their hearts and commitment to change and reward them for their hard work. Then tell the public what you have achieved. You have to win your own people over, before you win the public over.

I can go on and on but time and space does afford me that luxury. If you would like to know more about what Ford or your company should be doing to drive a major change initiative, drop me a line or give me a call. I would be happy to give you some additional ideas and insights. I think the Ford Motor Company is trying to do the right thing to remain relevant to our lives and economy. It would be a shame if they failed because of ineffective internal support and adherence to the status quos. Let's hope that does not happen.