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Thirty-one years after joining Ford Australia as a financial analyst, Jacques Nasser was named CEO of the Ford Motor Company in 1998. Harvard Business Review's Suzy Wetlaufer talked with Nasser shortly after he took the reins, focusing on the challenge of change in a giant, worldwide organization that, writes Wetlaufer, "has long operated as a collection of fiercely independent fiefdoms united under the flag of their functional or regional expertise." This excerpt begins with Nasser explaining how he went about effecting a major cultural shift at Ford.
We realized that the change had to be understood on the individual level. Every manager, every designer, every engineer, every person in the plants had to change his or her way of thinking. And the only way to change at the individual level, I believe, is through teaching. Teaching, we've found, is an amazingly effective way to change an organization. With the teaching programs we've used over the past three years, our people have delivered $2 billion to our bottom line, either as increased revenues or decreased costs. And they've delivered them because their mind-sets have changed.
Now, many executives intuitively lead by teaching. In both formal and informal settings, they share their perspectives on strategy and competition, for instance, or they coach individuals to build their skills. I myself taught for years, but I didn't even realize I was teaching. I was talking about the history of Ford, which was the history I grew up with. I told stories about my experiences in different parts of Ford, good and bad. I used those stories as a way of capturing what worked and of describing the pitfalls and opportunities I'd experienced.
This is what's changed: we've systematized teaching as our means of change, made our message consistent, and taken it to a larger audience than ever before. The programs we use are many and varied Capstone, the Business Leadership Initiative, and Executive Partnering, to name just three. (For an overview of Ford's teaching initiatives, see the chart "The New Curriculum at Ford.") But they all come down to the same thing: people teaching people about the why and how of Ford's new direction. And we create leaders of change in the process.
Is teaching the same thing as spreading knowledge?
Spreading knowledge is part of it. In fact, there is no better, faster way to distribute knowledge around a company than through teaching. In the past 30 years, I have worked for Ford in ten countries. I've faced a military junta in Argentina and a financial meltdown in the Philippines. I've faced hyperinflation, closed markets, open markets, Japanese competition you name it. I've probably packed 100 years of experience into those 30 years. I could keep all that inside my head, or I could share it with people in the company to help them learn.
Beyond "redistributing the wealth" around Ford, what makes teaching an effective tool for change?
Consider what usually happens in change programs in large companies. A slew of consultants comes in with overheads and Powerpoint presentations. They lecture people about why change is important and how it needs to happen. And when they leave, the people who have sat through the show say, "What do they know? They don't work here." And nothing happens.
But once you start to teach in-house with your own people leading the effort, the teachers themselves have no choice but to behave differently. You've gotten up in front of your people, and you've said, "This is what I believe. This is how we should run the business." After that, it's very hard to disown yourself from the change process. You have to live it and breathe it every day. Teaching enforces the discipline of change.
But I'll tell you something about the discipline of teaching: it is not an easy thing to do. You have to be absolutely committed to it. You can't say, "I'm going to open up the dialogue," and then not really open it up. You have to be genuine in what you are doing. I mean, when you get stopped at the newsstand on a Saturday morning and a factory worker comes up to you and says, "I was thinking about that comment you made in your speech the other week," you can't say, "Well, sorry, it's my free time now. Just send me a note next week." When you open up change when you bring its case to your people you have to stay front and center for their questions.
Wouldn't it be more efficient and just as effective to change the Ford mind-set by moving its people around between fiefdoms?
It's not enough. People may get a more global point of view with international assignments, but teaching adds something critical. It demystifies why we need to change, why we actually need a global point of view. It demystifies what we're all thinking here at headquarters. You know, you go down a step or two in some parts of this company, and there's a mythology about why we do things the way we do, and the stories don't always match reality. As a result, a wall builds up between senior management and the people who execute the strategy. The people on the front lines end up saying, "They want change up there," and they don't know why, and they don't care.
Teaching allows you to replace the old mythology with a new and better one. When I first came to Dearborn, I decided to invite people to take a look around my office and answer any questions they had. We had thousands of people through. And you know what they asked? "Where's the Jacuzzi?" A story had started I don't know where, and I don't know how that when I came to Dearborn, I had an elaborate office designed for myself with a health club and a Jacuzzi in it. So people came, and they saw that there was no Jacuzzi. That was part of breaking the old mythology, which was that the senior executives were so disconnected from the real work of this company that they were spending their afternoons in Jacuzzis.
With teaching, we've been able to introduce new stories, to create a different folklore about what's possible at Ford. That's how you build a new culture through stories. I tell a lot of stories that have the same moral that working at Ford does not have to be about working in a single area. It can be about working and caring for the whole company.