Situation
Ford needs a plan to reinvigorate its business. The current thinking is to accelerate development of trucks, electric cars and self-driving vehicles. To launch 23 new models in 2018, Ford’s cost is significant and streamlining development is complex and expensive. Tesla, Google and Uber seem to have distracted Ford from its core business. There is a clear need to boost the higher-margin truck and SUV business, but defining the path to the future is also required. A stronger market for electric vehicles and driver-less cars should emerge, so opportunity exists but there is also a “me-too” effect. Although catching the attention of Wall Street isn’t easy the market will respond if Ford can grow value.
Challenge
With an old and diverse manufacturing culture Ford operates each plant autonomously within its own unique structure. In the past, Ford gained its strength in different regions by competing on quality and reliability. Improving collaboration and efficiencies is a novel quest. But these efficiencies must consider how information is managed and how insight is delivered for better decision-making. Building cars and trucks that people want is important, but just as critical is stripping away petty rivalries and distractions that stand in the way of progress. Ford’s future depends on focused evolution.
Opportunity
In the past, Ford concentrated on core principles to create effective workgroups, minimize waste and defects, and align its capacity to market demand. Another target was optimizing production while keeping costs in line. When information flows effectively to where it’s needed when it’s needed, it cultivates an environment where people speak up to solve problems collectively. The best way to drive Ford into the future is to develop its culture with successive step-change improvements. What strategy will Ford adopt to build solution roadmaps and action plans that create value? How will Ford strengthen resources that extend throughout all of its operations and into supply chains?
Solution
One component of a Ford solution is to beef up its SUVs, underscoring that Ford is a truck company. Yet reallocating capital in this direction is a strategy, not a future. Consumers want reliability and value. Our early days working with Ford were devoted to building the Quality is Job#1 concept. Now it’s vital to adopt deep change. At the same time, improving the quality and reliability of value and service must happen at Ford.
Global Investments would model Ford’s DNA and global EcoSystem to modernize its capabilities and practices for better decision-making. Ford must “connect-the-dots” in a new way. Being responsive is paramount to take advantage of new opportunities with innovative products and services. With disruption from car sharing and e-hailing along with mobility and enhanced data-connectivity the pursuit of new applications, remote services and upgrades is here. Ford must position its vehicles as a platform that improves the human experience and how we live and work. Ford’s opportunity depends on evolving its culture and transforming the company’s thinking to respond in an ever-changing world.
Takeaway - Modernize capabilities and practices to improve decision-making and ability to connect-the-dots.