As someone who spent the majority of his professional career in the auto parts industry, helping run a family business that was owned and operated by members of my family for 80 years, I have followed the recent trials and tribulations of General Motors and Ford with more than a passing interest. Our company was called Fel-Pro and was acquired by a global auto parts conglomerate in 1998. Ford was Fel-Pro's very first customer, and the relationship that Fel-Pro had as a supplier to Ford lasted from its founding to its sale.
Parts suppliers to Ford and GM have had an extremely difficult time recently. Federal-Mogul (Fel-Pro's acquirer), Tower Automotive, Collins & Aikman and Delphi are all in bankruptcy. Just last Friday, Dana (Fel-Pro's largest competitor) declared bankruptcy as well.
In late January The Wall Street Journal reported on Ford's current change initiative, entitled "Way Forward." The article referenced a sign on the wall of the project "war room" that states, "Culture Eats Strategy for Breakfast." That same month Time magazine noted that William Clay Ford, Jr. "believes that nothing short of a cultural revolution will save the family firm."
The automotive industry once dominated the U.S. economy as America's love for the power and independence symbolized by automobiles led to an almost insatiable appetite for new designs and models. In addition to the major auto makers, thousands of smaller manufacturers and suppliers, such as Fel-Pro, thrived as well. Yet roughly 30 years ago global manufacturers such as Toyota began to threaten the dominance of the Detroit auto makers. In attempts to be competitive, U.S. manufacturers have tested myriad new business models and strategies, with mostly disappointing results.
The years of industry dominance and unchallenged growth had left U.S. auto makers with practices and assumptions that have hampered their ability to look at problems with fresh perspectives. Their hierarchical, bureaucratic, and risk-averse cultures have made them inflexible and unresponsive to change. Bill Ford understands this, and as he told a Time reporter, "I want to find a different way." One hopes that the leadership of Delphi, Dana, Federal-Mogul, Tower and Collins & Aikman understand this as well.
The automotive industry is not the only one faced with unprecedented global challenge and requiring innovative thinking to redefine and renew itself. Finding a different way requires fresh perspectives and new insights, often emerging from within the heart of organizations, the employees themselves. True innovation requires a long-term commitment, a tolerance for trial and error and mistakes, a commitment to creating a learning environment, and a willingness to involve employees in problem solving.
In an article titled "Management Innovation" in the February 2006 Harvard Business Review, Gary Hamel notes, referring once again to the automotive industry, "Unlike its Western rivals, Toyota has long believed that first-line employees can be more than cogs in a soulless manufacturing machine; they can be problem solvers, innovators and change agents." Toyota, with its ability to "harness the intellect of 'ordinary' employees," is now setting the standard for the industry.
Engaging employees in problem solving represents a cultural revolution for many industries. Hamel sees it as a "marked departure from traditional management principles." He goes on to identify employee-driven problem solving as one of a dozen management innovations of the 20th century that have provided pioneering companies with competitive advantage.
Data regarding employee satisfaction indicates that employees would welcome another way as well. At according to a 2005 study by the Conference Board, only 49 percent of employees across industries and across the nation are satisfied with their jobs, the lowest percentage recorded to date. Watson Wyatt found in a study of 12,750 employees in 2004 that only 39 percent trusted senior management, 69 percent said that communication in their organization was poor, and only 32 percent said they felt motivated to perform well.
What makes upper management reluctant to believe that the people doing the work know their jobs the best? Why are managers hesitant to communicate openly and frankly with employees about what is shaping their companies? Why don't more companies regard their employees as the only true differentiating factor in today's global business environment? I really can't tell you, but I know that more should.
Companies that have turned to employee-driven problem solving tools find that employees are far more apt to invest discretionary effort in their work. Those companies experience lower turnover and absenteeism, demonstrate more resilience and uncover innovative solutions to an array of business problems. They find that an invitation to bring their best talents to work is precisely what many employees are looking for. And they can point to business results to validate it.
Building an employee-engaging culture requires dramatic change for many organizations. While this kind of fundamental change is difficult and requires a long-term commitment from leadership, it is often the best means of renewal and even survival for an organization.
I wish success for Ford with its "Way Forward" project and successful restructuring for all of the auto parts manufacturers as well. As Bill Ford says, "The outcome matters not just to our company but to our country."
Ken Lehman can be reached at info@winningworkplaces.org.
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