Bill Waddell writes about a product-quality decision made by Mark Fields, who will shortly become CEO at Ford…and about the reaction of then-and-current CEO Alan Mulally:
Early on his tenure at Ford Mulally implemented a process in a weekly review meeting whereby the execs color coded their status reports – green for those on target, yellow for those running behind and red for any project in serious trouble.
No one had ever brought a red project to the meeting when Fields learned that there was a serious defect in the roll out of the first Edge cars. Customers and dealers were anxiously waiting for the Edge and it was a critical part of Ford’s strategy.
According to “Once Upon a Car” – a great book about the crises in the auto industry when the economic bottom fell out in 2008:
“Fields had two choices, neither one of them good. He could ship the Edges that worked, restart production, and hope the glitch could be found and fixed on the fly. Or he could delay the launch and be the first executive to go into Mulally’s Thursday-morning meeting with a big fat red dot on his weekly progress sheet. He sat down with his team in Dearborn and made the call. “We are not going to ship a vehicle before it is ready,” he said. ‘We just can’t . We have to delay it. I’m going to have to call it a red.’ His staff members looked at him. He could almost feel their pity.
At the next business review, Fields took his seat, right next to Mulally. As luck would have it, he was the first executive to present. His mind raced. I’m going to get killed here , he thought. Then he took a deep breath and showed everyone the launch page with a large red dot on it. ‘The Edge launch is red,’ he said. ‘And we’re delaying it.’
Fields thought he felt people moving their chairs away from the table, away from him. Bringing bad news to senior management at Ford was typically avoided at all costs. Nobody wanted to even be near the culprit. The Thunderbird Room got very quiet. Everyone looked at Mulally, waiting for his reaction. A few seconds passed. Then Mulally turned toward Fields, stood up, and started clapping.
This reminds me of a story about entrepreneur/inventor/industrialist George Westinghouse, which I posted years ago as part of my Leadership Vignettes series, and re-posted more recently:
The date, sometime during the late 1800s. The scene, a Westinghouse Electric factory complex in Pittsburgh, with an unpaved yard between buildings. A young laborer–a recent immigrant–is trundling a wheelbarrow, filled with heavy copper ingots, over an iron slab which serves as a track across the yard. The wheelbarrow goes off the track and into the mud. As the laborer struggles to get it back on the track, other workers begin mocking him.
At that moment, a man in formal clothing is crossing the yard. It is George Westinghouse, founder and chief executive of the company. He wades into the mud and helps the man get the wheelbarrow back on the slab.
Not a word was said, but powerful messages were transmitted: when someone is having problems, you don’t laugh at him–you help him. When things go wrong, no one is too important to dive in and get his hands dirty.
This is a splendid example of how good organizational cultures are created: through the power of example. Think how much more effective Westinghouse’s action was than the mere posting of a “corporate values statement” containing phrases such as “we must respect our fellow employees at all times.” Not that such things lack value, but they are meaningless unless backed up by action.
It would have been very easy for Westinghouse to simply ignore the incident and continue on his way. After all, he was heading to a meeting about something–a multi-million-dollar bond issue, say–compared with which a wheelbarrow stuck in the mud would seem to pale in importance. But his instincts were the right ones.
(The story is from Empires of Light, by Jill Jonnes)
And similarly, Alan Mulally’s action in applauding Mark Fields’ bad news was far more effective than any poster or e-mail tag line to the effect that “transparency is our highest value,” or some such phrase.
Disclosure: I’m a Ford shareholder.