Innovation at Ford (What?)

Well, now that Ford has revealed the full scope of last year's financial bloodbath (a loss of more than $12 billion, which amounts to more than $4000 per car sold in North America, one of the most dismal corporate performances ever), it brings to mind that last summer Chairman and CEO Bill Ford fired himself as CEO and hired former Boeing exec Allan Mullaley to replace him. At the time I found the choice unremarkable, but subsequently I read a fascinating story that describes the making of Boeing's 777 in Karl Sabbagh's fine book "21st Century Jet;" Alan Mullaley led the project during critical years of the 777's development.

This is interesting because of the innovations in the 777 project itself - the first airplane that Boeing developed strictly using online drafting tools without pencil and paper; a design and manufacturing process entirely built on teamwork (250 design teams); and a consistent emphasis on creating a win-win environment among Boeing employees and between Boeing and its many suppliers. This last point was a big change, as projects prior to the 777 were characterized by a rather intense win-lose style, including a lot of yelling and a profusion of blaming. Mullaley led what was, in effect, a dramatic change in Boeing's corporate culture in the process of delivering a highly innovative aircraft, and doing so on time.

So, now, let's think about Ford. Ford could have brought in a financial genius to help sort through the red ink and make the countless tough financial decisions that the coming years will see. He could have chosen a product design genius, often known in Detroit as a "car guy," to help revitalize the decidedly tired styling at the company. Or he could have chosen an engineer who would lead the shift to alternative fuels and hybrids, which all auto companies will have to master to make it beyond 2010.

But he chose a leader whose distinguishing ability, at least according to Sabbagh's book, is his ability to foster a collaborative culture. Presumably Mullaley is a talented leader along many other dimensions that will matter to Ford's survival, but inasmuch as strong leadership and open collaboration is absolutely essential to effective innovation on the scale that Ford must now achieve, it seems that Bill Ford made a remarkably good choice.