Back to the Future
If financial results are any indication, the One Ford strategy is moving the company in the right direction. Despite continued economic uncertainty, Ford predicts, and analysts agree, it will be solidly profitable in 2010, a year earlier than anticipated.
If all goes as planned, Ford will be able to build each of its cars for several thousand dollars less than its international competitors, says Cole, a reversal of fortune that will enable it to offer features and amenities others can't. Ford needs all the profit margin it can get. The billions it borrowed in 2006 enabled it to avoid bankruptcy and a federal bailout, but it still has a mountain of debt to pay down.
Although Smither says Ford's IT department revamp is "well progressed," full global integration will take another two to three years. Beyond that, IT has truckloads to do. Global collaboration has, for one thing, doubled network traffic and strained Ford's consolidated infrastructure. "We need to make big investments in ensuring our network is resilient and improve capabilities in our hosting environment," says Smither. Savings from data centre consolidation must be reinvested in infrastructure improvements, like re-architecting Ford's WAN. New consumer technologies will demand more from IT as well. "In terms of areas where technology is rapidly advancing, mobility, social networking internally and externally, we're just in the infancy of that," says Smither.
Accordingly, IT will need professionals with emerging technology experience, a skill set in high demand. Cole says employers are already experiencing shortages of workers with critical skills, and if Ford waits too long to staff up, it could have a hard time finding professionals with the right knowledge. Ford's Nissen says IT staffing is under constant evaluation, and that Ford has deals with third party IT service providers capable of staffing up when necessary.
There's also the question of whether the changes Ford is making will stick. "Your strategic planning or your product portfolio or your leadership, if any of that derails, then your whole attempt to change the organisation and to change IT can get derailed," says Koslowski. Ford faced similar challenges during the auto recession of the 1980s, losing billions, squandering market share. Corporate leaders avoided bankruptcy through cost cutting, a focus on quality and introduction of the best selling Taurus. The changes didn't last; after a few years, Ford returned its roots.
"The forces of tradition are like 500-mile-per-hour headwinds," says Kotter. "Often what happens is a new CEO comes in and makes what seems to be a huge change in a gigantic company over four or five years," says Kotter. "But if it hasn't been made to stick, guess what? Everyone starts slipping back into the old ways of doing business and the great turnaround doesn't last."
Cole, however, believes Ford is unlikely to backtrack this time. "It's like surviving a near death experience. It's focused them on what they should do," he says.
Smither isn't worried. "I think staying focused on the One Ford plan, and taking decisive action to make sure we matched capacity with demand while leveraging our global scale, is what allowed us to survive," says Smither. "And the same is true for IT. At this point we continue to be laser focused not just on integrating Ford but figuring out how we can continue to grow profitably in the future."
The restructuring process, he says, has been invigorating. "I have always told people that a career in IT is a career in change management. But no one, no one, could have anticipated this level of change," he says. "I know people massively fear change, and it's been challenging. But I also think it's been motivating and constructive, and I think my team would view it the same way. You always see it differently coming out than you do going in."
Image courtesy of David Parker