Stretched thin, Ford shifts focus
IT chief Nick Smither declared the week of March 12 "Spring Break Week." Employees donned jeans and Hawaiian shirts. Instead of rushing to meet deadlines, programmers and technicians were asked to think how to move forward with fewer people.
In the past, downsizing meant pushing workers to do more with less. This time, the cuts were too deep and workers were stressed to the breaking point. Fearing widespread burnout and departures, Ford's executives took a different tack: a companywide review of work and bureaucracy to be eliminated.
"With a third fewer people, we're going to have to re-engineer the way we work," Ford Americas President Mark Fields said in an interview published in a recent issue of Ford World, the company's internal magazine. "We're going to have to stop doing some things."
Across Ford, managers are being asked to draw up lists of everything they do, prioritize each task and eliminate what's not essential.
Changes are already taking place. Ford is eliminating meetings and cutting the number of people required to attend those that remain. In areas such as engineering, decisions that once required the approval of a vice president now can be made by lower-level managers. Processes that were layered with steps and paperwork have been streamlined.
More than 6,000 white-collar workers took buyouts and left the company last month; another 2,000 are expected to leave by the end of the year.
"It is not likely that any department was left with enough resources to do everything," Joe Laymon, Ford's group vice president of human resources and labor affairs, said in an interview. "If you don't allocate your resources to accomplish the top things in a world-class way, we may continue to slide."
Laymon pointed to his own department as an example. His No. 1 priority is preparing for contract negotiations with the United Auto Workers this summer.
"Coaching and counseling the key talent to stay in the company, that's also in my top five," he said. "So is hiring a chief marketing officer. Those things are where I'm going to put my money, my time and my resources."
That means sacrificing many other things not considered critical to Ford's survival. Laymon has served on as many as 10 boards; now he's down to two. He's less involved in community activities that generate good will toward Ford, but do little to bolster its bottom line. While Laymon would like to continue these efforts, he and his team have neither the time nor the resources.
Letting engineers engineer
The same thing is happening in product development, where Ford's new global product development chief, Derrick Kuzak, is taking a scalpel to Ford bureaucracy and refocusing his staff on designing great vehicles.
Kuzak has organized quarterly offsite meetings for all of his managers. He used the latest session to talk to them about what they need to do to keep their team together and motivated to win.
"It's about doing it pitch by pitch, inning by inning, game by game," Kuzak said. "We're trying to inspire the engineers by getting them back to being engineers. If we do that, great products will follow."
In a memo sent to all product development employees earlier this month, a copy of which was obtained by The News, Kuzak listed 10 actions he is taking to streamline the product development process and eliminate unnecessary work.
They range from cutting some once-mandatory meetings and limiting attendance at those that remain to requiring fewer management approvals on engineering changes and letting lower level managers make more decisions.
Human resources expert John Challenger of Challenger, Gray & Christmas Inc. in Chicago said such tough choices could make Ford stronger in the long run. Big companies like Ford tend to overanalyze, spending as much time justifying a decision as they do implementing it.
"Often small and medium-sized companies are reluctant to hire people coming out of large companies because they are less self-sufficient," Challenger said.
Laymon said the changes are creating a leaner, more nimble Ford. Too often, Ford workers have squandered valuable company time doing busy work because they feared losing their job if they objected. Now, Laymon wants workers to tell their managers what's an essential part of doing their job and what's bureaucratic nonsense.
"It also allows people to connect two letters that, historically in Ford, we've had difficulty connecting -- which is the N and the O," Laymon said. "I want you to give me more time if at all possible, but not at the expense of your family or whatever else you hold dear."
The work ethic is not the problem at Ford, Laymon said. In fact, he is more worried about employees burning out during these stressful times than he is about them slacking off.
More cuts possible
Making sure employees keep their faith in Ford and its future is essential if the automaker wants them to give their all to save it. That is a real challenge in light of the marketplace realities Ford is grappling with today.
The specter of more layoffs has not been dispelled entirely. While most departments met their downsizing goals, a few did not. That means some layoffs may still be necessary. The key to avoiding more cutbacks is to stabilize U.S. market share.
"We have to halt the share slide," Laymon said. "I have faith that Mark Fields and his team are going to do that."
Boosting employee morale is a key element of Ford's restructuring plan.
Each quarter, the company surveys workers, asking them how they feel about Ford's products and its future.
The latest numbers were not reassuring. Less than half of those surveyed said they were optimistic about Ford's future, and just 38 percent said the company has the cars and trucks it needs to succeed.
Ford CEO Alan Mulally's own strategy for boosting morale centers on team building. He considers the fault lines that traditionally have divided Ford -- labor versus management, factory versus office -- an impediment to the company's revival. His motto: "One team. One plan. One Ford Motor Co."
To demonstrate that those are not empty words, Mulally recently replaced the company's disparate bonus programs with a new plan that rewards all employees -- hourly and salaried alike -- according to the same standards.
All in the family
One thing Ford has going for it is a sense of community rare in companies its size.
Fields recently told workers that Ford employees are much more of a family than their peers at General Motors Corp. or DaimlerChrysler AG's Chrysler Group. It has a lot to do with Ford's history and the fact that Bill Ford Jr., Henry Ford's great-grandson, is the company's executive chairman.
Laymon wants to make sure that spirit is not lost when Ford needs it most. He has asked all managers to review their employee records, make a list of every birthday and work anniversary and make sure that none goes unacknowledged.
"They may not want a big party," Laymon said. "They may not want a card. They may not want balloons. But if they want all of those things, figure out a way to get it done.
"We're asking managers to become walk-around leaders. You can't do this sitting in your office."
That applies to Mulally, too.
Inside Ford, the new CEO is already famous for responding to e-mail messages promptly and personally, whether they come from senior executives or lower-level employees.
One worker in Ford's human resources call center sent Mulally a note in January, commending his leadership and inviting him to stop by if he ever made it to that corner of the Ford campus. The worker assumed Mulally was just being polite when he asked where the call center is. Instead, Mulally surprised the worker when he showed up last week to thank him for the note and stayed for the better part of an hour talking to the worker and his colleagues.
According to Laymon, nothing builds confidence in Ford's future like 45 minutes with Mulally.
"Employees believe this guy can lead us out of this thing," Laymon said. "He is our thoroughbred, and we plan on racing him every single day."
A lot of good people have left Ford over the past several weeks, and their absence is bound to be felt in the months ahead.
"As they were leaving, some of the people I talked to said: 'We're really counting on you and the rest of the team to turn the company around and save our pensions,' " Fields told Ford World magazine. "I take that very seriously, and I think most people around here do, too."
-- "If they pull a knife, you pull a gun. If they put one of yours in the hospital, you put one of theirs in the morgue." Sean Connery, "The Untouchables"