Branching Out

Ford Motor Company just hired a new president and CEO, Alan R. Mulally, who was formerly with Boeing. He has no automotive experience, but is being given the reins. William Clay Ford Jr., gave up those titles, but is retaining the Chairman title and responsibility.

I think this is a great thing for Ford and a good example for everyone else. Here we have someone who has a huge family run business and he had the good sense to get outside input when needed. The NY Times reports:

Since becoming chairman in 1998, Mr. Ford has steadily increased his grip on the company, adding titles. But in July, he told the company’s board that he wanted to bring in an outside chief, he said in an interview.

Mr. Ford said of Mr. Mulally: “Our team needs a steady hand from somebody who’s been through turnarounds and knows what it takes and can say, ‘You’re on the right path, stick with it, it’s going to work,’ or ‘This isn’t the way to go, let’s refocus and go somewhere else.’ ”

Sometimes it takes just that--someone from the outside. Now, I am a strong advocate of promoting from within (and hey, if my boss happens to stumble upon this, I'd like a promotion at year end--thanks!), but I'm also a strong advocate of getting people in from the outside.

Have you ever wondered why your company tends to pay new people more than it pays old people? (Oh dear, that sounds ageist. How about new employees vs long term employees?) Not all companies do this, but many do. It isn't necessarily bad management practice. It's because good companies understand that sometimes you need an outside view. This practice subtly encourages turnover. (And your company should pay for performance so that the highly rated employees aren't making less than the new people, while the average worker is.)

When you've been with a company a long time the company way becomes ingrained and you have a hard time seeing any other way. So, you need to bring people in from the outside. This does not mean you can't grow your own people. You should be doing that as well. But you need to be open to new ideas.

Once I worked for a company that consistently appears on Fortune's Top 100 Companies to Work For List. The Chairman's attitude was "I may not know what you know, but I need what you know." Translated--he knew he needed to hire people who were better at some things than he was. If you've trained everybody under you, they only know what you know. Branch out. Don't be afraid to get new eyes looking at a problem.

I'll be interested to see what changes outside leadership brings to Ford. Hopefully, for them, the changes will be good ones. If not, well I'll keep buying Toyotas.