Is Your Strategy A Recipe For Disaster?

The other night I came across a show on CNBC titled “Ford: Rebuilding An American Icon.” ¬†As you can tell from some of my other posts, Ford is a company that I’m really excited about because of their complete company turn around. I know a bit about some of the strategies but wanted to know more, so this title completely drew me in. It was interesting to get a bit of insight into the company, especially since it has stumbled multiple times – and it’s that stumbling that inspired me to write this post.

The segment in question was called ‘Ford Family’s Boom and Bust‘ – it’s a short segment and I’ve attached the video, but here is a quick rundown if you prefer to read:

  • For every Model T, Thunderbird or Mustang; there has been a Pinto, Edsel or some other disaster
  • Great ideas become stagnant
  • Record Profits —-> Record Losses

Journalist¬†Phil LeBeau interviewed Bill Ford, great grandson of Henry Ford, and asked if it was a fair criticism to say that ‘… when Ford is on a roll, things are going well, the (leadership) takes it’s eye off the ball.’

Bill responded: ” I think that’s fair … I’ve seen the booms and the busts, and one of reasons why I think we don’t sustain our prosperity is that we stop changing – we think we have the recipe for success.”

Bill completely nailed it.

They stop changing because they believed that they figured it out – that they found the secret recipe for success and all they needed to do was just to keep repeating it.

It’s easy to over-estimate our abilities to adapt, and to under-estimate the abilities of the competition. Ford isn’t the only one guilty of this, it happens at numerous of companies – mostly large, but also small. Business strategies need to be adaptive – if they change with the times, you’re already late! There is also no overarching strategy that works for everyone, no cookie cutter formula. Ford realizes this, and some of their strategies going forward will change the marketplace. Here are three in particular that really excited me:

  • Ford Sync – I wrote about this before, but it needs to be mentioned again. In a world that is becoming more digital and connected, Ford is trying to find a way to adapt new technologies and make it easier and safer by syncing to cell phones, mp3’s, and digital devices thru voice command.

  • Ford Figo – India is one of the fastest growing auto markets. Even though Ford has been there for over a decade, they had a dismal 1.8% market share. The reason – Ford didn’t offer a pint sized compact, which is what 70% of Indian consumers want. Instead of pushing a global strategy, Ford adapted to the local environment and introduced the Ford Figo. The big innovation though isn’t in the compact, but in the doors. Crowded Indian streets = a lot of accidents. To make repairs cost effective, harnesses have been taken off the door panel, allowing for the panels to come off completely, with new ones attached, form fitted and color matched and ready to go within 24 hours. Since it’s introduction, Ford sales have increased 300%

  • Ford EcoBoost Engines – Fuel efficiency is all the rage – not only for the environment, but also your pocket (and government mandates). Ford’s innovative new designs are turbocharged with direct fuel injection, resulting in 20% better fuel efficiency and 15% decrease in greenhouse emissions. The Mustang went from 15/23 MPG in 2009 – the 2011 model gets 19/31 while maintain 305 HP and a 1/4 mile of 13.6 seconds. In fact, in one recent test, a stock 2011 V6 Mustang went 776.5 miles on 1 tank of gas while averaging 43.9 MPH, resulting in 48.5 MPG!!!!! That’s absolutely insane!!!


It’s never too late to have some humble pie and learn from your mistakes. Ford came to the realization that there is no set formula for success, and this is an important lessons for all companies to learn. As cliche as the saying is, it was created for a reason – Innovate or Die.


Trimming the Fat: Get Your Company On A Diet

In a recent interview on FastCompany, Nike’s President and CEO Mark Parker tells a story about a conversation he had with Apple’s Steve Jobs. At the time Parker was recently hired by Nike and asked Jobs if he had any advice that he could give. At first Jobs balked, but then paused and said that Nike makes some beautiful product, but it also makes a lot of crap. His advice: “Get rid of the crappy stuff” and focus on the good.

This idea drives home a point in an earlier post on Ford – are you doing the right things? Ford, Nike, and like many other companies out there, can get caught up in the idea of diversifying. By trying to please every single market segment, the company loses focus on what it does well. Money that could be spent on making good products great is instead spent on making bad or average products that no one cares about.

If you have 30+ product choices, then you’re trying to appeal to everyone and that’s almost impossible to do. If you ever watch an episode of Kitchen Nightmares with Gordon Ramsay, one of the first problems you’ll find with almost every restaurant is the menu. The restaurant owners think that offering every dish possible will get more customers, but instead it results in poor quality food, and inventory nightmares. If you want to read more about how Chef Ramsay deals with these issues, check out this blog.

Know what you’re good at, and keep making it better. If you stray off the path to satisfy the few outliers, you’ll lose your core audience. In marketing this is known as spray and pray – and even if you’re a large company, this usually isn’t the best approach. If you’re trying to please everyone under the sun, odds are that you’re following market trends instead of innovating and creating a product that people want to talk about. So get rid of the crappy stuff and focus your energy on creating something amazing.

Whats in a Mission: A Tale of Two Car Companies

The American car industry has taken a lot of slack over the past two decades, and even more so with recent government bailouts. The perception of Americans cars are at a all-time low, and customers are flocking to foreign cars. Fords’ CEO Alan Mulally knew had an uphill battle, but he created focus. His mission ‘One Ford‘ – a lean company, giving the people what they want and value, creating an exciting company that is profitable. One Team – One Plan – One Goal.

Ford Mission Statement

Has it worked? Earlier this year Ford made its first profits since 2005, and they’ve created cars for people to talk about. Cars that are more fuel efficient, has a GPS that finds the most eco-friendly routes, and even a system that sync’s with your Apps and allows for voice control. Ford is now considered one of the most innovative companies – and it all came from having a strong sense of mission.
What about the companies who are losing in the industry? Look at Saturn, whose mission was to:

“market vehicles developed and manufactured in the U.S. that are world leaders in quality, cost, and customer satisfaction through the integration of people, technology, and business systems and to transfer knowledge, technology, and experience throughout General Motors.”

It essentially doesn’t tell us anything. One of Saturn’s key core values was to create affordable, high quality cars, with high customer satisfaction. That went by the wayside when they dropped their lower cost lines (models between $8k – 14k) and instead pursued SUV’s and higher end lines (low $16k, high $30k). Instead of expanding their market share in what they knew how to do best – Saturn kept deviating off their original mission and tried to expand their brand.
How much did that effect the company? In 1995 the Saturn S-series outsold the Honda Civic by 7%; in 2004, the Saturn Ion (replacement to the S-series) was outsold by the Honda Civic by 197%. Due to the restructuring from government bailouts, GM has decided to phase out Saturn for 2010.
Do you know your companies mission?