| ||||
CLEVELAND—When the Ford Explorer-Bridgestone/Firestone crisis hit last year, Ford's newly established model to focus on customers was one crucial factor that helped steer the company's reactions, according to Ford president Jacques Nasser.
Nasser, in a speech in Cleveland at the HBS Global Alumni Conference, said that having a vision—in Ford's case, of wanting to be the world's leading consumer company for automotive products and services—proved extremely important for weathering the storm.
When what Nasser called "the tire issue" first broke, leading to the recall last summer of 6.5 million tires in the wake of at least 174 deaths and hundreds of injuries, most linked to rollovers of Ford Explorers, the company decided "to do what's right" for its customers, Nasser said. "That's a tremendously difficult period for our customers and for us as a leadership team," he said. (One week after Nasser's speech, on May 21, Bridgestone/Firestone Inc. announced that it was severing its 95-year business relationship with Ford, accusing Ford of rejecting safety concerns about the Ford Explorer, an accusation that Ford denied, according to The Wall Street Journal.)
 | |
| Some of the media were looking at what I considered to be a message, and critiquing it like I was being directed by Cecil B. DeMille for a Hollywood movie production. | |
 |
|
| —Jacques Nasser |
For business leaders, the important lesson from the Ford experience, he said, is to "make sure that you've got the capability of going to some values, and a mission, and a vision that everyone is aligned around.
"It was an extremely difficult period, but I'll tell you what, it was the easiest decision, because as you probably recall, Firestone did not want to recall the tires. The [National Highway Traffic Safety Administration] was in the midst of conducting a more detailed discussion of the tires. And for us it was an easy decision to say, 'We have to do this, we're going to do it whether or not this is an official mandate of recall or whether you, Firestone, agree to the recall,'" said Nasser. Ford was pushing ahead with new plans to offer its customers replacements of up to 13 million Firestone Wilderness tires when Bridgestone/Firestone ended the business relationship.
Sardonically, Nasser also told the audience another lesson he learned: that he should take acting lessons.
"That TV commercial," he began, shaking his head. "I found that part of it unsavory, actually, when some of the media were looking at what I considered to be a message, and critiquing it like I was being directed by Cecil B. DeMille for a Hollywood movie production. And that hurt actually, personally. I think the worst part is when they said I was a combination of Crocodile Dundee and Al Gore.
"Both individuals were deeply offended," he joked.
A resume of high risks
An Australian citizen raised in Melbourne, Nasser joined Ford Motor Company in 1968 as a financial analyst. Starting in 1975, executive assignments for Ford international automotive operations took him all over the world, and he was named president and a member of the board in January 1999. Ford employs 350,000 people around the world.
Nasser prided himself on accepting high-risk assignments as part of his Ford education. He endured hyperinflation in Brazil, for instance, and martial law in the Philippines during the Fernando Marcos era. He was also held hostage in Argentina. ("I was let go because Ford didn't want to pay anything," he quipped. "I'm still looking for the person who made that decision.") He enjoyed working in Australia, he said, and after reminding the audience of Australia's heritage as a penal colony for Britons, he added with a grin, "I just liked that sort of convict atmosphere."
One of his first assignments and most memorable learning experiences came in the 1970s, when he was handed the job of shutting down Ford operations in Thailand. "It was a very sad day for me," said Nasser. "It was the first time I really had to face the human face of closing down operations, and it was a tough experience." Later, he said, he was sitting in a Bangkok bar trying to drown his sorrows when he spotted another non-Thai person at a nearby table. "I started to talk to him, and he started to explain that he was from General Motors and they were just establishing their operations in Thailand.
"So that was part of my education. You never really know what's right and wrong; you've got to take a long term view. I'm sorry we closed down then. By the way, GM closed two years later." Ford is back in Thailand now, he added, and doing well.
Brand new model
Ford's switch several years ago to a customer-focused business model has brought great internal and external change to the company, he said. Like most auto manufacturers, the organization's idea of a perfect customer was someone who turned up once every three years or so to buy a car, then disappeared until the next purchase. The business model favored design, engineering, manufacturing, sales and a long lead time, but bore no real connection to customers' changing needs. Though Nasser said Ford has no intention of jettisoning its capabilities in design, engineering, and manufacturing, it wants to add what he called "the headset of a customer."
"The word consumer there is a small word, but it changes the whole view we have of the business," he said. "It takes us from the transaction mentality of a manufacturer-engineer who can sell you a vehicle, compared to a lifetime relationship mentality. The consumer mindset is forcing us, in a very positive way, to reexamine everything that we do and test our own skill levels."
Global markets both bring more competition and nurture a very different kind of consumer, one who is better informed and has ever-expanding options, Nasser said. And a top-down, command and control management style doesn't cut it anymore, he added.
On a personal note, Nasser told the audience that when he was growing up, his father had always stressed the importance of family business. "The last thing my dad wanted me to do was to actually work for a company. His view was that if you were really smart, you had your own family business. If you weren't so clever, then you worked for some company.
"When I joined the Ford Motor Company, it took me three weeks to tell him that I was working for Ford," Nasser said with a smile. "And it then took him thirty years to say to me that was a good decision."
· · · ·