Grassroots Leadership - Ford Motor Co.

Ford Motor Co.

Home Base: Dearborn, Michigan
Year Founded: 1903

"How many of you feel comfortable being here? About half. Okay. Well, I hope to change that this week. I want all of you to be uncomfortable. Because if you're comfortable, you can't really be a revolutionary, can you?"

-- Janine Bay, now director of vehicle customization for Ford Motor Co.'s Automotive Consumer Services Group, speaking to participants in Ford's New Business Leader program.

Welcome to Dearborn, Michigan -- cradle of the coming revolution. It is an unlikely cradle. Dearborn is the archetypal company town, home for nearly a century to Ford Motor Co. Up and down the Southfield Freeway, along Michigan Avenue and American Road, stand testaments to Ford's enormity and prosperity: huge steel-and-glass structures, each housing hundreds or perhaps even thousands of engineers, marketers, and financiers.

Powerful specters haunt these buildings. There's old Henry Ford, the farmer's boy whose urge to create a car for the masses transformed an entire nation -- but whose autocratic stewardship nearly destroyed his company. There are the "Whiz Kids," Robert McNamara's band of honors grads, who wrested authority from local managers and amassed a powerful, professional oligarchy at Ford headquarters.

And, of course, there is the legacy of success itself -- a legacy that still resounds through the industrial economy. Massive scale yielded massive economies, which yielded competitive advantage. But, as the organization grew larger, individual jobs became granular and focused. Just as old Henry's assembly line parceled an intricate manufacturing operation into discrete tasks, executives at Ford and other companies cleaved their businesses into smaller product groups, then into functional units. If you worked at Ford, you were a Lincoln man or a manufacturing guy; your allegiance and your thinking ended there. Since the executives at the top were the only ones who could see above the partitions, they made the decisions, nudging increasingly immobile giants along their courses.

The Ford business model perpetuated stability, and, as long as the universe remained in order, it worked reasonably well. But, as Ford steers into a technology-driven global economy, its weaknesses are becoming evident. Of course, the company is still making money: Profits in 1999 hit an all-time high. But those profits resulted mostly from truck sales, and were made mostly in the United States and Canada. Elsewhere, Ford is sagging. It faces dramatic industry overcapacity and near-flat worldwide demand. As a result, its stock is now trading at less than 10 times its earnings -- just one-third the multiple accorded the Standard & Poor's 500 as a whole. Ford's CEO, Jacques Nasser, 52, argues that the company has become too rigid, too slow. To keep pace with the competition, he believes, it must find new ways to innovate -- and fast. It must drive down decision making into the ranks, to enable, as Nasser says, "nimble leaders at all levels."

So the future of Ford comes down to this: a stark classroom located off Dearborn's main drag. Here, early on a winter morning, 28 new frontline Ford managers are hatching their plans for the company's big transformation. It is radical stuff: Brian Zapinski, a supervisor at the company's Edison, New Jersey, assembly plant, proposes a fleet of mobile service units to service Ford vehicles at their owners' homes or offices. Michael O'Brien, 28, worldwide-revenue coordinator for compact SUVs, wants to create Ford-branded leisure and adventure trips. Kris Rogers, 33, who works on Ford's Common Automotive Receivable System Conversion, proposes free oil changes and other services during the warranty period.

How do you start a revolution? You train revolutionaries. Ford has always attracted and nurtured capable managers and technicians, but it has failed to do the same for change agents and leaders. So, as part of the automaker's cultural overhaul, Ford is embarking on a sweeping attempt to mass-manufacture leaders. It wants to build an army of "warrior-entrepreneurs" -- people who have the courage and skills to topple old ideas, and who believe in change passionately enough to make it happen.

This year, Ford will send about 2,500 managers to its Leadership Development Center for one of its four programs -- Capstone, Experienced Leader Challenge, Ford Business Associates, and New Business Leader -- instilling in them not just the mind-set and vocabulary of a revolutionary but also the tools necessary to achieve a revolution. At the same time, through the Business Leaders Initiative, all 100,000 salaried employees worldwide will participate in business-leadership "cascades," intense exercises that combine trickle-down communications with substantive team projects.