The Toxic Culture — Can it be changed?

In the early days of his leadership at Ford, CEO Alan Mullaly found himself surrounded by lieutenants that were unable to admit problems. The culture at Ford had become so toxic that its leaders were only in it to make their divisions look good at all costs. Mistakes were minimized or, worse, swept under the rug. Since errors were obscured for image sake, no one really knew what was truly going on. It was a difficult, cultural problem to face as a leader.

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The conference table was a place where Ford executives once gathered to snark, to brag, to show off.

Mullaly came in and demanded attendance during his weekly Business Plan Review meetings. He also demanded each lieutenant give his updates and not hand it off to a subordinate. He also demanded all mobile devices be placed on a table away from the conference table so that executives couldn’t check email or otherwise fiddle around on them while their colleagues gave their weekly update. This helped ensure they would at least pay attention, and maybe come around to help their colleagues in need vs. stab them in the back, which was common at Ford at the time.

Mullaly demanded honesty.

Another thing Mullaly demanded was honesty. Ford was a sinking ship back in 2008. The numbers looked bleak. The culture was toxic. The lieutenants disliked and distrusted one another. And no CEO before Mullaly could figure it out and make it work, not even Bill Ford. One of the values Alan had to inject into Ford’s leadership was honesty. He coupled honesty with acknowledging humility — as in, it is OK to admit problems within your division. In fact, it is the only way they can go about fixing them and finding the help to make them better. He instituted a Green-Yellow-Red evaluation metric for its divisions. Green meant all is well. Yellow showed areas of caution to look out for. Red exhibited that this is a problem that needs fixed right now. No division head wanted to admit their areas had any red — for weeks on end. Everyone was too proud (and scared) to admit they had weaknesses that needed addressing. They lacked the humility needed to publicly admit it in front of their peers. Remember: Ford’s culture was about looking good in front of others at all costs. Honesty and humility be damned!

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Ford’s culture was toxic, including back-stabbing, lying, and looking good at all costs.

Then, one of Mullaly’s lieutenants had the gumption during one of the Business Plan Review meetings to test his boss’s mettle. He showed red in an area of his business that needed immediate attention. Mullaly publicly praised the executive for his honesty and forthrightness and his willingness to ask for help. No doubt the executive and his peers were flummoxed by Mullaly’s show of approval. Alan then asked the rest of the executives who can help this man out. (Prior to Mullaly, Ford divisions didn’t help each other out, for they had become far too siloed, treating each division like its own fiefdom.)

The executives felt they could finally begin to trust one another (and the new boss) instead of hurt each other.

After one executive proved to the rest that it was OK to risk looking bad and asking for help, a sea of red began showing up in the Business Plan Review meetings. The executives felt they could finally begin to trust one another (and the new boss) instead of hurt each other. Mullaly’s leadership began to shift Ford’s culture. Problems were praised when brought to light, and then were bounced around the conference table to see who could help whom and what it would take. They finally started to work together.

Ford is a fascinating turnaround story and exhibition of cultural shift. They morphed from a back-stabbing, image-focused, look-good-at-all-costs culture to an honest, humble, and help-each-other-out Zeitgeist. While it didn’t happen overnight, their financial problems were so vast that in many ways they didn’t have a choice but to change. Sometimes when the reality of your business situation is so dire (competitors going bankrupt, systemic shifts in the marketplace, frozen credit markets), you are left with little choice but to own up to your problems and change. Mullaly demanded honesty out of his executives because if he didn’t, Ford was destined to Chapter 7 or 11, and its stock was heading to near zero, the sub $1 zombie affliction no one wanted.

Further, Mullaly proves that it is possible to change a company culture, no matter how dire and toxic it is. Ford could not have been a fun place to work at in the days before Mullaly showed up. People incessantly snarking on one another. No one willing to help out and contribute to others. Everyone possessing a me-focus. Everyone trying to look good at all costs in front of their colleagues. Obfuscating dire problems from public view. Tampering with divisional data in spreadsheets. No one really knowing what the hell was actually going on. The Ford turnaround story proves that one man can make a significant difference in shifting an entire culture from closed and toxic to open and helpful.

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