Over this past weekend while barbecues were being ignited, sunscreen was being slathered on, and families were loading up the SUV for a getaway, a changing of the guard took place at the Ford Motor Company, headquartered here in Dearborn, Michigan. CEO Alan Mulally stepped down after eight years on the job. During that time, he reinvented Ford, changing the company’s vehicle lineup, as well as its culture.
A great article by Joe Nocera in The New York Times chronicles Mulally’s run at Ford. As you know, Ford was the only one of the Big Three that survived the recession without a bankruptcy filing, coming out of the trough stronger than ever. It is interesting that a guy from Boeing was the one who engineered this success.
For us at Jacobs Media and jacAPPS, Mulally’s stewardship at the automaker also coincides with the opportunity we’ve had to partner with Ford and learn from them. For us, it started at the Consumer Electronics Show in 2009 which Mulally keynoted. (That fact alone tells you how he changed the culture at Ford and the world’s opinion about the automaker.)
During the speech, Mulally told a packed room that as Ford was in the process of developing SYNC and other innovations, a change was underway:
“We are a car company but we are learning how to think like an electronics company.”
And with that statement, Mulally redefined the entire space for auto companies, as well as for the radio and audio content industries. CES has been transformed in the process, devoting more time and space to “connected car” and telematics technologies. And everyone is impacted, from consumers to car dealers to radio operators.
Our development deal between jacAPPS and Ford is symbolic of that company’s commitment to expanding its footprint into entertainment, information, and distribution, partnering with many smaller firms like ours.
Nocera’s article tracks the Mulally culture, and spells out the qualities and behaviors that broadcasting companies (as well as media consultancies) can learn from. Here are some of the things he did:
- Changed the culture – When you’re been around for decades, it’s probably a good idea to re-examine the company’s dynamics. While Mulally had a venerable brand, his instincts were to address that old-line Detroit mentality that allowed the Big Three to have its lunch eaten by foreign car makers. In radio, you can make the case that an analogous situation exists between traditional broadcasters and the pure-plays and other disruptors that are working hard to usurp AM/FM radio. Getting broadcast managers to envision a new competitive landscape is part of what goes into reshaping attitudes and goals.
- Borrowed to build – Yes, Ford was leveraged and needed infusions of cash, but Mulally knew that in order to survive the recession (or depression, as it was in Detroit), the need for capital to facilitate R&D and the design of new products in the 2000s was critical to the company’s success. This isn’t an argument for broadcasters to go into more debt, but the need to have the ability to innovate and experiment has never been greater, especially in the face of startups and increased competition from digital players. For the automakers, new and better products are their currency, and Mulally had to be sure that Ford would survive the economic downturn with world class products.
- Focused and simplified – Nocera points out a key for Ford was to narrow its sights on smaller, more fuel-efficient vehicles, simplifying Ford’s array of products. Many broadcasters have moved in this direction over the years, but the need to provide the basics in a defined and focus manner has never been more essential.
- Communicated the message – Mulally began every meeting by reiterating the goals – again and again. In this way, there was no question about Ford’s mission. And the mantra was repeated at every meeting, no matter who was in the room – executives or the media. As broadcasters struggle to maintain traditional business while staking out new turf, there’s never been a more important time to communicate the mantra to staff and management.
- Grew success across the company – Nocera talks about how Ford divisions were in rivalry with one another, functiong in the same cutthroat ways you’d expect from the other companies they compete against. Someone I met at Ford told me how it was impossible to learn from the European divisions because of how secretive divisions operated. Mulally worked hard to break the walls down between divisions. In broadcasting companies, there have been times when programming, sales, and digital have not operated in harmony with one another, weakening the effectiveness of the company itself. For the good of the big brand, it is essential that different divisions and silo keep their eyes on the collective prize.
- Made executives accountable – When times were tough at Ford (as they are inside most broadcasting companies these days), Mulally’s meetings with his direct reports used to be typified by executives not admitting problems. He fostered the ability for his execs to come clean about problems in the company that could then be solved. The ability to be honest about market conditions and future prospects goes to the heart of long-term success.
- Emphasized the entire company’s success – Salary and bonuses had been based on each division’s performance. Mulally changed the calculus, making compensation dependent on how Ford Motor Company was performing. In that way, everyone in the company was focused on the main entity, and how it could be improved. We see that old thinking with DJ and personality bonuses, historically tied to their disreet daypart performance, rather than being dependent on how the entire station is faring. In these days when ratings aren’t always translating to sales, that may be an unpopular but a necessary way to restructure how key players are paid.
- Developed a great bench – It is always challenging to replace a highly-visible, innovative, and iconic CEO like Mulally – or Steve Jobs, for that matter. But Mulally’s replacement – Mark Fields – sure looks to be that guy. He has been a change agent while also being a key player in Ford’s revival, and is well-cast to keep the company in good shape. All of us – from broadcasters to company’s like mine – have to think about our own succession plans. Who can grab the baton and keep running the race?
- Personified leadership – We are in an age when CEOs have become celebrities, thanks to media outlets like CNBC and business coverage that has intensified since the ‘90s. Like Steve Jobs, Howard Schultz, Warren Buffett, and yes, Bob Pittman, heads of companies are symbolic leaders. In Mulally’s case, he tied himself to Ford, and even had a sartorial symbol – the red sweater vest. At a time when other automakers were struggling, Mulally was a go-to leader who people felt they knew and could approach. In many ways, he came to symbolize the American automobile industry at a time when it was under immense pressure to survive.
Leadership is a consistent theme in this blog because it is the linchpin of success in every business – companies reflect the person in the corner office. It’s a fact and a challenge that boards of directors face every day, as well as smaller enterprises like mine that have to constantly innovate, grow, and evaluate our own progress.
During this holiday week, let’s take a moment to kick back and enjoy the summer – wherever you live –but also to contemplate that very fine art we call leadership.
And best wishes and thanks to Mulally, Fields, and Ford.
Jacobs Media has consistently walked the walk in the digital space, providing insights and guidance through its well-read national Techsurveys.
In 2008, jacapps was launched - a mobile apps company that has designed and built more than 1,300 apps for both the Apple and Android platforms. In 2013, the DASH Conference was created - a mashup of radio and automotive, designed to foster better understanding of the "connected car" and its impact.
Along with providing the creative and intellectual direction for the company, Fred consults many of Jacobs Media's commercial and public radio clients, in addition to media brands looking to thrive in the rapidly changing tech environment.
Fred was inducted into the Radio Hall of Fame in 2018.
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Well said. Ford is a terrific model for change during near chaos (to avoid far worse) and Mulally’s tenure will be B-School fodder for decades. He also had rock-solid support from ownership (Bill Ford in particular) and that made a huge difference. And in the midst of this turnaround, Ford has become the number one rated “Green” manufacturer. That’s leadership for both the short AND long term, just what Radio needs so badly to emulate.
Thanks for the great comment. Sitting here in Detroit during these past several years – and going out to CES – has provided an amazing education about what can be done to transform a traditional industry. “Results will vary,” as they say, but there’s some great learning here. Appreciate you taking the time to point out a couple other keys.
The obvious contrasts are so stark. No one has reinvented a radio company, changing its product line up or culture. And despite (in many but not all cases) finally having the dry powder to do it, no one in radio has poured money in R+D at a level close to what Ford did.
I wonder if any successfully transformed and reinvented companies cite radio in meetings as an example of what not to do. They could. It’s been said that radio has three customers – its listeners, its advertisers and its employees. All have gotten short shrift IMO since the consolidation era began. No wonder PURs are down and revenue is flat.
You couldn’t say so here if it happened, but I’ll bet many who read this blog wonder if some of the people from Ford you collaborated with scratched their heads at how radio handles its challenges. Change starts at the top and for the most part radio’s top is so Weekend At Bernie’s.
I acknowledge that this is a snarky post, but I can’t help but wonder what radio would be like if Mr. Mullaly had taken the reigns of one of radio’s “C” companies 8 years ago.
Thanks for some of that mid-week snark, Bob (I was getting concerned). I put together this post for some of the reasons you mention – Mulally’s MO at Ford is worthy studying. His ability to turn a traditional and troubled brand around in an impossible economy is worth studying. As for what they think of radio, my sense is that most of the OEMs we’re talked to still have a very positive attitude about the medium, fueled at times of nostalgic memories of the radio they grew up with. In many ways, most of the auto people we have spoken to go right to the local piece as a means for radio to stay relevant, unique, and in demand in the changing world of the “connected car.”
Thanks for contributing and maybe we’ll see you at DASH.
For the past few years we have been fortunate to serve as Ford’s House Developer for the SYNC AppLink system. Without exception, the people we have met at all levels of the company have not only been outstanding professionals, they are simply great people to work with. Smart, collaborative, and forward-leaning. Forget the old stereotypes of stodgy auto companies. Mulally’s impact has been felt throughout the company.
In their cars too. I rented a fusion recently and loved driving it. I probably only scratched the surface on the app side (was a rental after all) but the center stack was intuitive and worked well.
Ford’s gotten a lot better over the past few years. Many OEMs will quietly tell you that Ford took one for the team with SYNC – the first system of its kind, but also one that was very first generation. Glad you were able to rent one (nice vehicle BTW) which puts you ahead (sadly) of most broadcasters.