NEW CEO MULALLY'S CHALLENGES

[DSenstad]

He won't be dealing with the UAW, that will belong to Mark Feilds. Feilds has already done what he needs to do with announcing the closing, turning out the new lines and killing what he deemed Ford couldn't afford in the pipeline, and is on the way to killing off the union.

 

Mulally's job will be the Glass house. What Feilds has done to the rank and file Mulally will do to the management side. He is brought in a few years before he is ready to retire, will sift through the Glass House with his BS sniffer, and then start the heads rolling. Once the blood bath is over and the company is downsized to the point of growth he will receive his golden parachute and Mark Feilds will take over with Billy still in the background.

[mikem12]

He won't be dealing with the UAW, that will belong to Mark Feilds. Feilds has already done what he needs to do with announcing the closing, turning out the new lines and killing what he deemed Ford couldn't afford in the pipeline, and is on the way to killing off the union.

 

Mulally's job will be the Glass house. What Feilds has done to the rank and file Mulally will do to the management side. He is brought in a few years before he is ready to retire, will sift through the Glass House with his BS sniffer, and then start the heads rolling. Once the blood bath is over and the company is downsized to the point of growth he will receive his golden parachute and Mark Feilds will take over with Billy still in the background.

 

 

sounds about right

[Biker16]

1) Mulally worked in increasingly responsible roles on the 727, 737, 747, 757, and 767 projects and led development of the 777.

 

2) So he owns a Lexus, so he says it's the finest car in the world. That does not disqualify him from running Ford. Lou Gerstner probably could not tell you how System 360 turned into AS/400, he was far from the expert on computer technology that people believed were required to turn around IBM. The only perspective he brought to IBM was a customer's perspective. This industry is full, from stem to stern, with 'car guys' many of them stroking egos the size of Town Cars, many of them convinced that their 'gut instincts' are infallible, and a whole chunk of them willing to play politics and lie in order to get their way. The last thing that Ford needed was an industry insider. There are enough people at Ford that know what's going on, so that he just has to know how to filter out the BS. Given that he's climbed his way up to the top, I'm guessing his BS detector is a heck of a lot better than Bill Ford's. And BS detection is pretty much a universally applicable skill.

plus The ALL-NEW 787 Dreamliner

 

http://www.boeing.com/commercial/787family/

 

Newer 737

 

the 787 is the type of product Ford needs one that Kicks the competitions ASS in every area it matters.

 

with a posible 4000 orders over 20 years replaces.

[RichardJensen]

the 787 is the type of product Ford needs one that Kicks the competitions ASS in every area it matters.

Y'know that's a bit simplistic.

 

The A380 is in many respects a superior plane.

 

However, it was not the right plane for the market.

 

Rather, it was not the 'best' plane for the market as things turned out.

 

The 787 was a more conservative choice, it was far less daring, and the payoffs while nice, did not initially promise to exceed the payoff to Airbus for the A380.

 

In that respect, the 787 is what Ford needs, not the A380.

[Biker16]

Y'know that's a bit simplistic.

 

The A380 is in many respects a superior plane.

 

However, it was not the right plane for the market.

 

Rather, it was not the 'best' plane for the market as things turned out.

 

The 787 was a more conservative choice, it was far less daring, and the payoffs while nice, did not initially promise to exceed the payoff to Airbus for the A380.

 

In that respect, the 787 is what Ford needs, not the A380.

the A380 was airbus's 747 killer. but the 380 will never kill the 747 it can't it is so big and most airports are sized for th 747 not the 380, there is a spot the 380 will destroy the 747 but there is space between the 300 passenger A350 and the 550 passenger A380 The 747 carries 450 passengers.

 

 

The 787 has a 20% efficency advantage over it' airbus competitor, the 380 has a 13% advantage over the 747-400 not the 747-8 which is 7% lower than the 747-400.

 

Like your thinking why launch a product offensive when there is not need for one. if there is a great demand for > 550 passenger airplanes boeing can respond, but for now the market is looking like it can only support one mega jet. While the market for the 787 is in excess of 4000 units.

 

The true daring design in airliners was the proposed sonic cruiser.

 

fuel csts and 911 killed the concept, but iit would have reborn a supersonic airliner. by reducing the travel times it could have increased the number flights over tradional airliners.

[RichardJensen]

fuel csts and 911 killed the concept, but iit would have reborn a supersonic airliner. by reducing the travel times it could have increased the number flights over tradional airliners.

That was a 'plane guys' plane.

 

The smart decision was to go with the 787 as the best response to a move to decentralize air travel (less reliance on hub networks, more point to point travel).

 

I admire Mulally for being pragmatic, and going with what his customers wanted, and not for some pie-in-the-sky uber-jet (like the A380) that would be 'cool', but would also have a much riskier business case (more reliance on factors outside Boeing's control, such as carrier financial resources, fuel prices, demand, airport authority willingness to remodel terminals, etc.)

 

The 787 as conceived speaks well for Mulally's decision making skills. He probably had to buck a lot of engineers that wanted to build the super sonic cruiser.

[dr511scj]

This industry is full, from stem to stern, with 'car guys' many of them stroking egos the size of Town Cars, many of them convinced that their 'gut instincts' are infallible, and a whole chunk of them willing to play politics and lie in order to get their way. The last thing that Ford needed was an industry insider. There are enough people at Ford that know what's going on, so that he just has to know how to filter out the BS. Given that he's climbed his way up to the top, I'm guessing his BS detector is a heck of a lot better than Bill Ford's. And BS detection is pretty much a universally applicable skill.

 

And that paragraph made my "BS detector" go off.

 

A manager in a technical manufacturing/marketing concern doesn't know how to filter out the BS unless he's got some independent knowledge of engineering and market realities, as well as a firm grounding in the relevant technical processes, and a customer-driven perspective on ultimate outcomes. Such "education" comes only from relevant experiences (academic, professional and informal).

 

That is why "bean counters" make poor decision makers, notwithstanding all their numerical reports and reams of empirical data.

 

At least when FoMoCo's products obviously don't measure up to world-class standards (e.g. the 3.5 Duratec vs. the latest Nissan 3.5 VQ) or there are mistakes and delays in design, engineering or manufacturing, Mulally ought to have sufficient engineering background to see through the excuses.

 

 

That being said, milestone automobiles don't come from the minds of BS-detecting bureaucrats, budget-slashers, or penny-pinching accountants. They come from creative "car guys" who can master the integration of "hard data" with affective "gut instincts." They come from people with vision and the ability to marshal complexity toward a clearly-defined outcome.

 

On the other hand, it's doubtful that he will be qualified by his experiences to ride herd over marketing, advertising, product promotion, brand "DNA" or motorsports concerns. If he lacks basic knowledge in these areas, how would he be able to sift the "wheat from the chaff?"

 

BS detection is hardly a "universal skill." It is highly dependent on one's frame-of-reference

[RichardJensen]

Mulally, as CEO, will not be managing engineers. He will be managing managers. Just as he did at Boeing. Different industry: same set of BS detection skills required. He needs to be able to recognize the people in the Glass House that know what the heck is going on, vs. those that obviously don't.

 

He does not need a fine grasp on processes, etc. That was the initial knock against Lou Gerstner. It didn't apply then, it doesn't apply now.

 

Mulally said at the town hall meeting, 'we have all the talent we need here'. It will be his primary responsibility to find and free that talent. That calls more on skills as a manager of human beings, than as a manager of the intricate processes involved in vehicle development.

 

As to the paean of the car-guy, as the balancer of hard-data and gut instincts--well, guess what, there's only a handful of people at Ford, probably enough to fit in my office, that truly have those qualifications. Those skills are not widely found in this business.

 

Ford also likely has no shortage of people that assume they have those 'car guy' chops, that claim they do, that tell all their buddies they do, that sit at bars of an evening and boast about how they would fix Ford. Just look at this board. It's full of 'car guys' that claim they know what would fix Ford.

 

Mulally needs to be able to recognize people in Ford with skills like Hau Thai Tang, based on what they've done, not their ability to talk the car-guy talk.

 

BTW statements like 'bean counters make poor decision makers' dings the BS detector. It's a prejudiced reflexive statement with no reference to outside reality. When put to the test, it simply says that some, if not all, 'poor decision makers' are bean counters, and that anyone labeled a 'bean counter' is by definition a poor decision maker, which necessarily involves either labeling a proven poor decision maker a bean counter after the fact (which makes such a designation both prejudicial and useless), or it involves making predictions about future performance based on no independently verifiable standards.

Edited September 7, 2006 by RichardJensen

[ZanatWork]

At least when FoMoCo's products obviously don't measure up to world-class standards (e.g. the 3.5 Duratec vs. the latest Nissan 3.5 VQ) or there are mistakes and delays in design, engineering or manufacturing, Mulally ought to have sufficient engineering background to see through the excuses.

 

I'm wondering how an engine that's barely had any response in the auto media yet is already "failing".

 

Is this about outright hp numbers? Torque? Boring. The engine's use in real-world environs is far more important. The 6.8 mod V10 outran the 8.0 Dodge V10 in trucks because of its power across a wide band, as opposed to an engine tuned more for numbers than for use.

 

Nissan has shown very little ability to reign in those motors in their fwd offerings...funny stuff, if you ask me. Oboy, a 280 hp sedan that changes lanes when the throttle's punched!

 

265 hp with a simpler valvetrain and on regular unleaded measures up fine, I have no idea why anyone would feel differently. This motor is just debuting now, and performance variants don't have far to go to stand with the VQ or others. Full variable-timing and/or direct injection certainly make 300+ hp a strong possibility.

[bolita]

Ford also likely has no shortage of people that assume they have those 'car guy' chops, that claim they do, that tell all their buddies they do, that sit at bars of an evening and boast about how they would fix Ford. Just look at this board. It's full of 'car guys' that claim they know what would fix Ford.

 

I really agree with your statement. Its so true, and sometimes we are quick to judge actions only that we have the advantage of hindsight.

 

I think that this change in Ford will be postive and will help establish a new scenario - perhaps only at management level.

 

Time will tell, and whatever we se in the next 18 months will not be thanks to Alan's input...these things take time!

[RichardJensen]

Actually, Mulally can change performance metrics real quick. He can impose accountability where it's needed real quick too.

 

His purview is not product, that goes to the various group CEOs and their product VPs, and those product VPs' team leaders.

 

His purview is accountability, and believe me, you can change that in an awful big hurry.

[dr511scj]

Mulally, as CEO, will not be managing engineers. He will be managing managers. Just as he did at Boeing. Different industry: same set of BS detection skills required. He needs to be able to recognize the people in the Glass House that know what the heck is going on, vs. those that obviously don't.

 

Begging the question: how will he know if they "know" without knowing something about what they're talking about?

 

Driving a boringly antiseptic Lexus LS430 around Seattle and supervising development of a carbon-fiber airliner doesn't exactly transfer to understanding why someone buys a 7,000-lb turbodiesel pickup or a 500 horsepower sports car, or a RWD sports sedan, or a hybrid SUV, and what sorts of things will attract them or keep each them coming back to Ford.

 

Mulally said at the town hall meeting, 'we have all the talent we need here'. It will be his primary responsibility to find and free that talent. That calls more on skills as a manager of human beings, than as a manager of the intricate processes involved in vehicle development.

A nice campaign statement that any "smart CEO" would spew at the start of a new relationship (I've heard plenty of this "feel good" rhetoric in my day).

 

Sure, interpersonal skills, identification of "stars," and team-building are essential to Mulally's success. But as CEO (or even COO, depending on how much leash Bill Ford gives him) he will need to be one of the "final authorities" charting the direction of Ford's product side. Much of this work will be indirectly through getting the right people in the right places with the right resources for success, and by ratifying their decisions.

 

But it's overly simplistic to reduce the CEO position down to "finding and freeing talent." Somebody has to referee the disputes--even technical ones-- that rise to the top. Someone has to make the tough calls on strategy (hopefully we've seen the end of "consensus management") and to "evangelize" new Bold Moves before the board.

 

One would hope Mulally engages in those activities as well.

 

As to the paean of the car-guy, as the balancer of hard-data and gut instincts--well, guess what, there's only a handful of people at Ford, probably enough to fit in my office, that truly have those qualifications. Those skills are not widely found in this business.

 

Written as a true "car guy" hater. Of course there aren't very many who deserve to be at the top of most professions. That such people are in short supply in no way indicts the concept.

 

Ford also likely has no shortage of people that assume they have those 'car guy' chops, that claim they do, that tell all their buddies they do, that sit at bars of an evening and boast about how they would fix Ford. Just look at this board. It's full of 'car guys' that claim they know what would fix Ford.

How does that track with the "all-you-need-to-know-about-the-car-"bidness"-you-learned-as-a-Lexus-customer" theory? Obviously, the people Mulally will go to -- who are ALREADY AT FORD (they have all the "talent" they need, remember) -- will all have records of experience in the automobile business or in a relevant technical discipline. He won't be recruiting from www.blueovalnews.com, the blogosphere, the automotive press, or Detroit-area watering holes! So the critical question is whether Mulally's specific experiences provide him a sufficient frame-of-reference to properly evaluate these folks and their work product (past, present and proposed) on objective and subjective bases. If he doesn't, all the "BS detectors" in the world won't save him from being snowed by a sophisticated con-man using the superior knowledge and buzzwords of an insider.

 

Mulally needs to be able to recognize people in Ford with skills like Hau Thai Tang, based on what they've done, not their ability to talk the car-guy talk.

 

Isn't Hau a "car guy?" (albeit a somewhat conservative one)

 

BTW statements like 'bean counters make poor decision makers' dings the BS detector. It's a prejudiced reflexive statement with no reference to outside reality. When put to the test, it simply says that some, if not all, 'poor decision makers' are bean counters, and that anyone labeled a 'bean counter' is by definition a poor decision maker, which necessarily involves either labeling a proven poor decision maker a bean counter after the fact (which makes such a designation both prejudicial and useless), or it involves making predictions about future performance based on no independently verifiable standards.

 

Wrong.

 

It simply recognizes that people who dedicate their lives to being accounting and "universal" business process wonks generally lack the technical and "real world" perspective to fully view and appreciate complex systems and technological problems beyond spreadsheets, cost reports, ratios, financial statements and other numerical data. Such folks often fail to appreciate long-term investments in intangible concepts and messy, imprecise or risky outcomes, unless it can be reduced into an accounting formula. After all, bean counters decided it would be better on a cost/benefit basis to pay a few judgments rather than adequately protect Ford Pinto's fuel tank. In retrospect, that was not only a very poor business decision but a morally horrifying one.

 

Bean counters are like lawyers and other personal service professionals. They keep you in the game by playing an essential role, but they seldom have sufficient grasp of the "big picture" or the critical technical nuances therein, to run the whole shebang. (To illustrate, it's sort of like how I can't seem to explain to you why the high performance, muscle car and "tuner" niche markets view cast hypereutectic pistons as crap in a purported "tunable" performance car, because you lack sufficient technical understanding of what I'm talking about or independent knowledge of these niches, thereby clouding your view of the "big picture.")

 

BTW, there are plenty of poor decision makers who aren't bean counters (most guys are married to one). And plenty of "car guys" have no business running the corner filling station, much less a Fortune 5 corporation. Still, the idea of the "universal" manager simply doesn't track with reality.

 

As I said before, BS detection is highly dependent on one's frame-of-reference.

Edited September 7, 2006 by dr511scj

[Sizzler]

That was a 'plane guys' plane.

 

The smart decision was to go with the 787 as the best response to a move to decentralize air travel (less reliance on hub networks, more point to point travel).

 

...

 

The 787 as conceived speaks well for Mulally's decision making skills. He probably had to buck a lot of engineers that wanted to build the super sonic cruiser.

 

So, was it Mulally's decision to do the 787? Or was he the guy put in charge of the project once that direction had been established by Boeing's then CEO?

 

Was he the 'Ford' middle-management guy who'd finished his 777 project and was looking to just keep on keeping on, or did he push for the 787? Is he a leader, or a good project manager?

 

That is why "bean counters" make poor decision makers, notwithstanding all their numerical reports and reams of empirical data.

 

That being said, milestone automobiles don't come from the minds of BS-detecting bureaucrats, budget-slashers, or penny-pinching accountants. They come from creative "car guys" who can master the integration of "hard data" with affective "gut instincts." They come from people with vision and the ability to marshal complexity toward a clearly-defined outcome.

 

I take personal umbrage at the classification of "bean counters" as evil. I have a drawer full of receipts going back decades for various car-related parts and services. That does not mean I was stingy in the 'development' costs related to my vehicles. It just means that I know what I paid, who I paid, and that I tried not to pay more than the going rate for whatever.

 

Let's stop knocking people who track expenses and expect a reasonable return (either physically or pyschically (sp?)) on their investment. Let's knock the real evil-doers, the ones who don't understand that leaving out 1 of 3 bolts in a frame is not being cost-aware, it is being quality-unaware and not being business-savvy enough to understand the impact on future sales of such a 'plan'.

 

Ford needs people who don't do just one thing and don't think about the impact of what they do on the current and future results of the company. They need people who are aware of the WHOLE picture.

How many MBA's have I seen fail to plan, planning to fail? They study charts, do the MBA thing, and wonder why just going through the motions doesn't work in that particular situation. Every situation is different, what worked 10 years ago in Japan may not work today in Minnesota. Ford needs aware thinkers, not rote reciters.

 

Ford is a business. They are in business to make money. They need controls to ensure that their cash flow is invested wisely. They are not in business to produce vehicles that satisfy a very limited market for an underwhelming price. They are also not in the business of producing such low-cost, shoddy vehicles that they destroy their future ability to woo customers.

 

As for Mulally? I'm coming around to the theory that he's a hatchet man. He's Bill Ford's hired hit man for the glass house because B. Ford doesn't have the stomach to make the cuts amongst his family's entrenched cohorts that everyone seems to feel is needed. He'll let Mulally do the dirty work, retire, and then either step back up, or bring a new generation up to the big podium.

[RichardJensen]

A nice campaign statement that any "smart CEO" would spew at the start of a new relationship (I've heard plenty of this "feel good" rhetoric in my day). ...

 

"all-you-need-to-know-about-the-car-"bidness"-you-learned-as-a-Lexus-customer" theory?

 

BTW, there are plenty of poor decision makers who aren't bean counters (most guys are married to one).

1) Well, it's hard to separate sincerity from insincerity this early, so it's pointless to argue about whether this was just feel-good stuff, or an honest recognition that a company with as many employees as Ford probably has more than its fair share of unrecognized talent.

 

Gerstner, at IBM, oversaw some tough decisions (selling off certain assets, abandoning OS/2, and approving the 'game changing' services/software model over hardware sales). However, there is no indication that he got personally involved in technical matters of the sort you are predicting.

 

2) Thanks for reading the blog, and yeah, I think Mulally's experience buying a Lexus is directly applicable. Unlike the people that have grown up in the auto industry in Detroit, the guy has spent almost all his life as a customer using the sucker's entrance at car dealerships. He's not been beholden to any car maker, he hasn't had his loyalty demanded of him, by unwritten expectations at his place of work. He's just bought cars period, like all the rest of us working stiffs (except, of course, he's bought more and better ones).

 

That's far more applicable than you give credit for, IMO. He's the first customer to run Ford--EVER. Ditto GM and DCX. The change in perspective is fantastic.

 

The caveat in the blog remains, the LS430 is not the 'best car in the world', it's just the answer to the question, "what's the best car in the world", when asked of a few thousand people. Mulally needs to impose on Ford's PD, accountability for determining what Ford customers consider 'the best car in the world', and delivering that as nearly as possible every time.

 

3) You ought to be ashamed of yourself.

[RichardJensen]

So, was it Mulally's decision to do the 787? Or was he the guy put in charge of the project once that direction had been established by Boeing's then CEO?

 

Was he the 'Ford' middle-management guy who'd finished his 777 project and was looking to just keep on keeping on, or did he push for the 787? Is he a leader, or a good project manager?

 

...

 

As for Mulally? I'm coming around to the theory that he's a hatchet man. He's Bill Ford's hired hit man for the glass house because B. Ford doesn't have the stomach to make the cuts amongst his family's entrenched cohorts that everyone seems to feel is needed. He'll let Mulally do the dirty work, retire, and then either step back up, or bring a new generation up to the big podium.

Mulally had to sign off on it. He was CEO of that division when the Sonic Cruiser concept was dropped, and Boeng went ahead with the 7E7. As far as whether or not he pushed for it, Boeing's inhouse media says that the company was looking into both the Sonic Cruiser and a super-efficient 757/767 replacement. The decision was made to go with the 757/767 replacement, with some added technology from the Sonic Cruiser.

 

I think Mulally's being brought on to examine bureaucratic processes and impose accountability. I don't think he's here to cut stuff for the sake of cutting it, but to demand accountability for the stuff that goes on at WHQ.

Edited September 7, 2006 by RichardJensen

[RichardJensen]

(To illustrate, it's sort of like how I can't seem to explain to you why the high performance, muscle car and "tuner" niche markets view cast hypereutectic pistons as crap in a purported "tunable" performance car, because you lack sufficient technical understanding of what I'm talking about or independent knowledge of these niches, thereby clouding your view of the "big picture.")

I believe those pistons are not universally regarded as crap.

 

http://www.alternativeauto.com/prodserv/05...ch-alcohol.html

[J-150]

That is why "bean counters" make poor decision makers, notwithstanding all their numerical reports and reams of empirical data.

 

 

 

Rick Wagoner is a bean counter and he's had a much larger juggernaut to turn around with much stonger union forces, stronger dealer network and more cliques than Ford.

 

 

I guess your argument against bean counters has been proven wrong

[DSenstad]

I really don't think anyone is going to cut for cut's sake. I think Fields and Ford already have a rough number in mind as to what is needed to run Corprate effectively, Mulally will use that as a guideline but will have the ability and authority to add or subtract. Mulally probably has some direction even if it is indirect.