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.