PROBLEM$-$SOLVING APPLICATION CASECultures Clash at FordFord Motor Company revolutionized the auto manufac$-$turing industry more than $100$ years ago with the inven$-$tion of the assembly line, but lately the company isstruggling to remain attractive to investors. Ford hasexperienced costly recalls and lost hundreds of millionsof dollars from its international businesses in recentyears. $129$ New tariffs on steel and aluminum have eatenup $$1$ billion of Ford's profits, and Moody's has down$-$graded the company's credit rating to one level above"junk" status. By the fall of $2018,$ Ford's stock price hit anine$-$year low. $130$ Meanwhile, rival manufacturers areinching closer to delivering on new technologies likefully autonomous and connected automobiles, andFord needs to reinvent itself to have any chance of sur$-$viving, let alone thriving, in its rapidly shifting competi$-$tive environment. But can a massive, entrenched,$116-$year$-$old company change itself? Executive Chair$-$man Bill Ford believes it can, and in May $2017$ hebrought on CEO James Hackett to make it happen.Hackett planned to drastically alter the way Fordoperated. $131$ Specifically, he wanted to change Ford'sculture to one that was more open$-$minded, creative,and adaptable so that it would be better equipped torespond to rapidly shifting market demands. $132$ Stake$-$holders had high expectations for Hackett's ability todeliver. In the two decades he spent as CEO of Steel$-$case, Inc.$-$an office furniture company$-$Hackett wasa strong proponent of "design thinking." Thisapproach to problem solving focuses on thecustomer$-$what goes through their minds and howthey experience a product. $133$ At Steelcase, Hackett'steams of sociologists, anthropologists, and technol$-$ogy experts used design thinking to transform thecompany from a cubicle designer to a trailblazer intoday's open, collaborative workspaces. $134$ Hackettwas hired to bring design thinking to Ford, overhaulits culture, and reinvent the approach the automakertook to creating its products. $135$Hackett made some noticeable changes right away.He reduced the number of people reporting directly tohim from $18$ to $8$ and decreased the frequency ofmeetings with them to allow them more time for cre$-$ative thinking and decision making. He hired $28-$year$-$old Clare Braun as his chief of steff, calling her a$"$reverse mentor" who would help him understand howpeople under $30$ were thinking. Hackett also madewaves by removing a plaque that commemorated for$-$mer CEO Alan Mulally's "One Ford" plan. Mulally's planhad been credited with repairing Ford's culture andsaving profits ten years earlier, but Hackett wanted tomake the point that old approaches only continue towork if the past and future were identical. The spaceon the wall became dedicated to drawing, mapping.and diagramming out Ford's strategy for competing inits new reality. $136$Hackett favors collaboration over traditional top$-$down management. Many of his efforts to change theculture inside Ford's corporate offices have centeredaround removing hierarchies to generate creative dis$-$cussions across functional areas. $137$ For example,Hackett launched "Team Edison" to focus exclusivelyon electric vehicles. The cross$-$functional team occu$-$pies an open space inside one of Ford's former Detroitfactories and, according to director Darren Palmer,knew that to succeed they needed to $"$be willing tochallenge every truth and every process we haddeveloped over the course of our careers." Hacketthas encouraged the team to generate ideas from mul$-$tiple viewpoints. According to Palmer, $"$On any givenday you can find yourself sitting next to someoneworking to market our electric vehicles, someonelooking at the profit potential of our electric vehicles,or be on a coffee break with someone involved in ourcharging strategy."$138$FRUSTRATIONS WITH HACKETTBy mid$-2018,$ approximately one year after Hacketttook over, Ford's profits were down around $$1$ billion.Key stakeholders were growing increasingly anxiousand impatient with the fact they still didn't understandexactly what was going on or how Hackett planned tochange the company$\mathrm{.}1139$Analysts began criticizing Hackett for failing to artic$-$ulate a compelling vision for exactly where he plannedto take Ford. Morgan Stanley analyst Adam Jonas saidwhat little Hackett had communicated was "vague andunstructured" compared to Ford's industry competi$-$tors. One journalist said Hackett used "fuzzy termsmore common to urbanists and businesspeople, andtalking with him can feel like taking a college philoso$-$phy seminar after a few bong rips. $140$ Issues withHackett's communication were present inside thecompany as well, where executives were often callingupon Braun, Hackett's chief of staff, to translate Hack$-$ett's diagrams and cryptic messages after meetings."Ford dealership owners also expressed concernsabout communications from corporate headquarters.Jack Madden, owner of a Ford dealership in Norwood,Massachusetts, said "There's been a lot less exposureto senior management... There's just not enoughInformation flowing down to dealers about where thecompany's headed."$142$One thing Hackett did make clear was that reorga$-$nizing and reinventing Ford would require that thecompany become leaner in both its product offeringsand its workforce. Hackett moved quickly and explicitlyto slash Ford's unprofitable vehicles and ventures. Heannounced in early $2018$ that the company would dis$-$continue five of its sedans to focus on SUVS andtrucks. $143$ Ford also announced in $2019$ that it wasclosing its oldest factory in Brazil and pulling out of itsSouth American commercial truck business. $144$ Hacketthas been less transparent on how and when he plansto trim Ford's workforce. While the need for some jobcuts within Ford is not disputed, the manner in whichHackett has communicated about the impending lay$-$offs has been heavily scrutinized. Experts believe thatvague statements about layoffs, along with a long pro$-$cess, have the potential to negatively impact employeemorale. Employees may feel undue stress and beginjob searching and underperforming if they worry aboutlosing their jobs. $145$IS FORD TURNING A CORNER?Ford reported first quarter earnings in $2019$ that far out$-$paced investors' expectations. $146$ Around the sametime, Hackett gave what some felt was his most straight$-$forward statement to date. He told analysts that Ford'stwo previous CEOs had allowed the company's costs toincrementally increase so much that the company hadto, as one article put it$,$ "stop the bleeding before itcould start showing gains from herculean efforts to turnthe company around." Hackett reported that by the endof $2018,$ the company had finally been able to put astop to the spending and level off structural expenses.Hackett said the company would be able to move muchmore quickly to deliver new products to the market nowthat this problem had been solved. $147$ Ford hasannounced it will make substantial investments in elec$-$tric vehicles, and Hackett recently told CNBC that driv$-$ers should expect a "big surprise" on the horizon. $148$Still, it's likely that Hackett will continue to mystifyFord's stakeholders. In an industry looking for a saviorwith a clear, concise plan of action, Hackett operatesmore like a coach. He favors using things like TEDtalks and Socratic exercises to slowly draw creativityand organic solutions from his people, rather thanhanding down personal dictates. $149$ Hackett's quirkystyle is closer to that of a tech CEO than an auto.industry leader, which he sees as particularly importantin Ford's situation. Ford's competitors are no longerlimited to other auto manufacturers and now includeSilicon Valley. Hackett thinks Ford's best shot is to startthinking like a tech start$-$up$,$ saying, "Corporations tendto reward action over thinking... But the truth is$...$you'll find the companies that didn't do the deep think$-150$ing and acted quickly have to redo things."Hackett acknowledges that it has been difficult forhis executive team to adjust to him and his penchantfor design thinking, but he believes they are starting tosee the method to his madness$\mathrm{.}151$ One member of histeam said recently that they believe "People will lookback in a few years and say, 'I understand now." $"152$APPLY THE $3-$STEP PROBLEM$-$SOLVING APPROACH TO OBSTEP $1$: Define the problem.A$.$ Look first at the Outcomes box of the OrganizingFramework in Figure $14\mathrm{.}8$ to help identify theimportant problem$($s$)$ in this case. Rememberthat a problem is a gap between a desired and acurrent state. State your problem as a gap, andbe sure to consider problems at all three levels.If more than one desired outcome is not beingaccomplished, decide which one is most impor$-$tant and focus on it for steps $2$ and $3.$B$.$ Cases have protagonists $($key players$),$ and prob$-$lems are generally viewed from a particular pro$-$tagonist's perspective. Identify the perspectivefrom which you're defining the problem.STEP $2$: Identify causes of the problem by usingmaterial from this chapter, summarized in the Organiz$-$ing Framework shown in Figure $14\mathrm{.}8.$ Causes willappear in either the Inputs box or the Processes box.A$.$ Start by looking at Figure $14\mathrm{.}8$ to identify whichperson factors, if any, are most likely causes tothe defined problem. For each cause, ask your$-$self, Why is this a cause of the problem? Askingwhy multiple times is more likely to lead you toroot causes of the problem.B$.$ Follow the same process for the situation factors.C$.$ Now consider the Processes box shown inFigure $14\mathrm{.}8.$ Consider concepts listed at all threelevels. For any concept that might be a cause,ask yourself, Why is this a cause? Again, do thisfor several iterations to arrive at root causes.D$.$ To check the accuracy or appropriateness of thecauses, map them onto the defined problem.STEP $3$: Make your recommendations for solving theproblem. Consider whether you want to resolve it$,$solve it$,$ or dissolve it $($see Section $1\mathrm{.}5).$ Which recom$-$mendation is desirable and feasible?A$.$ Given the causes identified in Step $2,$ what areyour best recommendations? Use the content inChapter $14$ or one of the earlier chapters to pro$-$pose a solution.B$.$ You may find potential solutions in the OB inAction boxes and Applying OB boxes within thischapter. These features provide insights intowhat other individuals or companies are doing inrelationship to the topic at hand.C$.$ Create an action plan for implementing yourrecommendations.