Recounting the trying times of the American automotive industry following the Great Recession of 2008, American Icon by Bryce G. Hoffman explores the people, challenges, and strategies that allowed Ford Motor Company to avoid government bailouts, bankruptcy, and position itself to become one of the world’s most profitable automotive companies after the crisis. Hoffman, a managing consultant and journalist, followed Ford’s response consolidating what he had learned from Board Meeting notes, interviews, and research into one of the most compelling works of modern business nonfiction.
The book opens in the years leading up to the Great Recession. After years of middling performance and a bloated portfolio of brands, Bill Ford looked to replace himself as CEO. Contrary to the industry norm of promoting from within the industry, Alan Mullaly, an aeronautical engineer came from Boeing where he had led one of the most successful commercial aviation projects in history, the Boing 777 program.
It may come as no surprise to many, but Ford survived and thrived under Mullaly’s leadership. His strategy and approach can be summarized in the following categories as key takeaways:
1) Minimize Distractions
Mullaly approached this in several areas in preparing Ford to survive the recession. Firstly, like any turnaround, the business needed sufficient capital to maintain the business and as a result, Ford aggressively pursued a new debt issuance to fund the business for the tough times ahead. Unlike their competition, this allowed Ford to avoid bankruptcy and funding in the moment, eliminating two potential distractions. Additionally, the UAW CBA negotiations were set to begin and rather than taking time to wait for competitors to offer terms, Ford pushed to hold and close their negotiations quickly and eliminated yet another potential distraction as the business sought to survive.
2) Team Collaboration
A key turning point in Ford’s management team came with the introduction of the Business Performance Review (BPR). The BPR, held each Thursday with all direct reports, was an opportunity and demonstration that the famously siloed organization needed to work together to survive. The key takeaway from the BPR was the use of a common template and list of KPIs across functions and divisions. It was in this setting that the leadership team began to collaboratively resolve issues supported by a culture of transparency where problems were pushed down in hopes the owner could resolve the issue themselves. These BPR meetings had the following ten rules.
i. People first
ii. Everyone is included
iii. Compelling vision
iv. Clear performance goals
v. One plan
vi. Facts and data
vii. Propose a plan
viii. Respect, listen, and help each other
ix. Emotional resilience, trust the process
x. Have fun and enjoy the journey together
The final leg of Mullaly’s strategy pushed for simplification of the global business. The company had been split by region, each with their own design, engineering, production, and supporting functions. Across these regions, Ford had 97 different nameplates spread over 8 separate brands. In the years leading up to and accelerated by the Great Recession, Mullaly and the Ford leadership team transitioned to Global Product Development as well as rationalizing ‘emotional brands’ that added little value and served to divide resources.
American Icon is the compelling story of one of America’s most iconic brands. The methods, strategies, and approaches taken by Mullaly and others were tested and performed in an extremely challenging environment. I recommend this book to anyone transforming their business, contemplating a move to another industry, or simply looking for a good read.