PROBLEM-SOLVING APPLICATION CASE Cultures Clash at Ford (Just a short answer for each question)

What I need is just:

1. Define the problem

2. Identify causes

3. Make your recommendations for solving the problem

PROBLEM-SOLVING APPLICATION CASE Cultures Clash at Ford Ford Motor Company revolutionized the auto manufacturing industry more than 100 years ago with the invention of the assembly line, but lately the company is struggling to remain attractive to investors. Ford has experienced costly recalls and lost hundreds of millions of dollars from its international businesses in recent years. 129 New tariffs on steel and aluminum have eaten up $1 billion of Ford's profits, and Moody's has downgraded the company's credit rating to one level above junk" status. By the fall of 2018, Ford's stock price hit a nine-year low.130 Meanwhile, rival manufacturers are inching closer to delivering on new technologies like fully autonomous and connected automobiles, and Ford needs to reinvent itself to have any chance of surviving, let alone thriving, in its rapidly shifting competitive environment. But can a massive, entrenched, 116- year-old company change itself? Executive Chairman Bill Ford believes it can, and in May 2017 he brought on CEO James Hackett to make it happen. Hackett planned to drastically alter the way Ford operated.131 Specifically, he wanted to change Ford's culture to one that was more open-minded, creative, and adaptable so that it would be better equipped to respond to rapidly shifting market demands.132 Stakeholders had high expectations for Hackett's ability to deliver. In the two decades he spent as CEO of Steelcase, Inc.an office furniture company-Hackett was a strong proponent of design thinking. This approach to problem solving focuses on the customerwhat goes through their minds and how they experience a product. 133 At Steelcase, Hackett's teams of sociologists, anthropologists, and technology experts used design thinking to transform the company from a cubicle designer to a trailblazer in today's open, collaborative workspaces. 134 Hackett was hired to bring design thinking to Ford, overhaul its culture, and reinvent the approach the automaker took to creating its products.135 Hackett made some noticeable changes right away. He reduced the number of people reporting directly to him from 18 to 8 and decreased the frequency of meetings with them to allow them more time for creative thinking and decision making. He hired 28-year-old Clare Braun as his chief of staff, calling her a "reverse mentor" who would help him understand how people under 30 were thinking. Hackett also made waves by removing a plaque that commemorated former CEO Alan Mulally's One Ford" plan. Mulally's plan had been credited with repairing Ford's culture and saving profits ten years earlier, but Hackett wanted to make the point that old approaches only continue to work if the past and future were identical. The space on the wall became dedicated to drawing, mapping, and diagramming out Ford's strategy for competing in its new reality.136 Hackett favors collaboration over traditional top-down management. Many of his efforts to change the culture inside Ford's corporate offices have centered around removing hierarchies to generate creative discussions across functional areas.137 For example, Hackett launched "Team Edison" to focus exclusively on electric vehicles. The cross-functional team occupies an open space inside one of Ford's former Detroit factories and, according to director Darren Palmer, knew that to succeed they needed to be willing to challenge every truth and every process we had developed over the course of our careers. Hackett has encouraged the team to generate ideas from multiple viewpoints. According to Palmer, On any given day you can find yourself sitting next to someone working to market our electric vehicles, someone looking at the profit potential of our electric vehicles, or be on a coffee break with someone involved in our charging strategy."138 FRUSTRATIONS WITH HACKETT By mid-2018, approximately one year after Hackett took over, Ford's profits were down around $1 billion. Key stakeholders were growing increasingly anxious and impatient with the fact they still didn't understand exactly what was going on or how Hackett planned to change the company.139 Analysts began criticizing Hackett for failing to articulate a compelling vision for exactly where he planned to take Ford. Morgan Stanley analyst Adam Jonas said what little Hackett had communicated was "vague and unstructured" compared to Ford's industry competitors. One journalist said Hackett used "fuzzy terms more common to urbanists and businesspeople, and talking with him can feel like taking a college philosophy seminar after a few bong rips."140 Issues with Hackett's communication were present inside the company as well, where executives were often calling upon Braun, Hackett's chief of staff, to translate Hackett's diagrams and cryptic messages after meetings.141 Ford dealership owners also expressed concerns about communications from corporate headquarters. Jack Madden, owner of a Ford dealership in Norwood, Massachusetts, said There's been a lot less exposure to senior management... There's just not enough information flowing down to dealers about where the company's headed."142 One thing Hackett did make clear was that reorganizing and reinventing Ford would require that the company Page 590 become leaner in both its product offerings and its workforce. Hackett moved quickly and explicitly to slash Ford's unprofitable vehicles and ventures. He announced in early 2018 that the company would discontinue five of its sedans to focus on SUVs and trucks.143 Ford also announced in 2019 that it was closing its oldest factory in Brazil and pulling out of its South American commercial truck business. 144 Hackett has been less transparent on how and when he plans to trim Ford's workforce. While the need for some job cuts within Ford is not disputed, the manner in which Hackett has communicated about the impending layoffs has been heavily scrutinized. Experts believe that vague statements about layoffs, along with a long process, have the potential to negatively impact employee morale. Employees may feel undue stress and begin job searching and underperforming if they worry about losing their jobs. 145 IS FORD TURNING A CORNER? Ford reported first quarter earnings in 2019 that far outpaced investors' expectations.146 Around the same time, Hackett gave what some felt was his most straightforward statement to date. He told analysts that Ford's two previous CEOs had allowed the company's costs to incrementally increase so much that the company had to, as one article put it, stop the bleeding before it could start showing gains from herculean efforts to turn the company around." Hackett reported that by the end of 2018, the company had finally been able to put a stop to the spending and level off structural expenses. Hackett said the company would be able to move much more quickly to deliver new products to the market now that this problem had been solved. 147 Ford has announced it will make substantial investments in electric vehicles, and Hackett recently told CNBC that drivers should expect a big surprise" on the horizon.148 Still, it's likely that Hackett will continue to mystify Ford's stakeholders. In an industry looking for a savior with a clear, concise plan of action, Hackett operates more like a coach. He favors using things like TED talks and Socratic exercises to slowly draw creativity and organic solutions from his people, rather than handing down personal dictates.149 Hackett's quirky style is closer to that of a tech CEO than an auto industry leader, which he sees as particularly important in Ford's situation. Ford's competitors are no longer limited to other auto manufacturers and now include Silicon Valley. Hackett thinks Ford's best shot is to start thinking like a tech start-up, saying, Corporations tend to reward action over thinking ... But the truth is ... you'll find the companies that didn't do the deep thinking and acted quickly have to redo things."150 Hackett acknowledges that it has been difficult for his executive team to adjust to him and his penchant for design thinking, but he believes they are starting to see the method to his madness.151 One member of his team said recently that they believe People will look back in a few years and say, 'I understand now. -152 APPLY THE 3-STEP PROBLEM-SOLVING APPROACH TO OB STEP 1: Define the problem. A. Look first at the Outcomes box of the Organizing Framework in Figure 14.8 to help identify the important problem(s) in this case. Remember that a problem is a gap between a desired and a current state. State your problem as a gap, and be sure to consider problems at all three levels. If more than one desired outcome is not being accomplished, decide which one is most important and focus on it for steps 2 and 3. B. Cases have protagonists (key players), and problems are generally viewed from a particular protagonist's perspective. Identify the perspective from which you're defining the problem. STEP 2: Identify causes of the problem by using material from this chapter, summarized in the Organizing Framework shown in Figure 14.8. Causes will appear in either the Inputs box or the Processes box. A. Start by looking at Figure 14.8 to identify which person factors, if any, are most likely causes to the defined problem. For each cause, ask yourself, Why is this a cause of the problem? Asking why multiple times is more likely to lead you to root causes of the problem. B. Follow the same process for the situation factors. C. Now consider the Processes box shown in Figure 14.8. Consider concepts listed at all three levels. For any concept that might be a cause, ask yourself, Why is this a cause? Again, do this for several iterations to arrive at root causes. D. To check the accuracy or appropriateness of the causes, map them onto the defined problem. Page 591 STEP 3: Make your recommendations for solving the problem. Consider whether you want to resolve it, solve it, or dissolve it (see Section 1.5). Which recommendation is desirable and feasible? A. Given the causes identified in Step 2, what are your best recommendations? Use the content in Chapter 14 or one of the earlier chapters to propose a solution. B. You may find potential solutions in the OB in Action boxes and Applying OB boxes within this chapter. These features provide insights into what other individuals or companies are doing in relationship to the topic at hand. C. Create an action plan for implementing your recommendations