The Transparent CEO, Part 2

After all these years in radio programming, I’ve apparently learned the art of the tease.  Yesterday’s blog post introduced JacoBLOG readers to a very different CEO – Ford’s new kid on the block, Jim Farley.

Hand-picked out of Toyota by the Ford CEO who turned it all around – Alan Mullaly – Farley has that familiar Ford logo in his DNA.  His grandad was an employee under Henry Ford.

And what he’s bringing to the car company celebrating its 118th birthday is something special.  “The Transparent CEO” was inspired by a recent story in the Detroit Free Press by journalist Phoebe Wall Howard.  Her article isn’t just great perspective on Farley’s recent missive to Ford’s foot soldiers; it’s an object lesson in management style – and substance.

Farley’s words and Howard’s perspective offer a unique look into a classic dilemma – a legacy business is under attack by an upstart competitor that’s out-thinking, out-hustling, and out-innovating all 30 OEMs – the traditional lineup of automakers.

Tesla – and now new startups like Rivian – is rewriting the book, not just on EVs, but how they’re designed, sold, updated, and marketed.  Meantime, proud heritage companies like Ford are struggling to regain their balance, focus on the mission at hand, and follow the plan.

Farley’s town hall meeting on WebEx was a direct approach that was neither “rah-rah” not was it a “chew-out.”  And for leaders in other industries, studying his modus operandi is time well spent.

Some may read yesterday and today’s posts, and interpret them as referendums on radio broadcasting’s leadership.  They’re not.  I’m looking at my own management style through Farley’s lens.

It’s relatively easy to run a company when business is good, and has a nice long runway for growth.  It is an entirely different equation when you’re leading a company during a time of unprecedented disruption emanating from technology, cultural shock, and a global pandemic that has killed north of 5 million people worldwide in just two years.

Thanks to journalist’s Howard’s reporting, let’s look at Farley’s playbook, and how he’s playing the game:

1. Assess the situation with candor, honesty, and facts – Leadership is less about emotional speeches, and much more about being straight with the workforce and treating them like adults.  As Howard notes, Farley’s speech contained no jokes, nor did it downplay the success of Ford’s competitors.  So often in radio, the competition is mocked or grossly underestimated.

“They change formats at that frequency every two years.  It’ll never work.”

“He’s not a morning guy.  Plus, people are loyal to our show.”

“They may get ratings at first, but they’ll never sell it.”

“Let her go.  She won’t succeed across the street.”

At Ford, Farley has run the numbers, looking at every aspect of Tesla, how they manage and productize their business.  And then there’s Tesla’s trillion dollar valuation.  In short, Ford is taking Tesla as seriously as a heart attack.

Whether radio broadcasters are assessing the reach, profitability, and influence of SiriusXM or Spotify’s content on the one hand, or Facebook/Google’s ad revenue growth on the other, it has to be head-on with all data, facts, and key factors on the table.

2. It must be about the customer experience – Yes, it about building great cars (that’s the content), and skillfully marketing them.  But it is Tesla’s obsession with the customer experience that Farley is after.  And that means thinking about how the product is used by consumers, applying available data to improve the product and every aspect of the car.

In radio, the ways in which listeners consume the product are usually afterthoughts – if they’re thought about at all.  Research tends to measure perceptions, as well as likes and dislikes.  But rarely does it focus on how listeners use it and how it makes them feel. Ask a Tesla owner about the car, and chances are, they’ll talk about the experience of owning and driving the vehicle.

3. It’s essential to be different from everyone else’s product – That is, if it hopes to be successful.  In a crowded, competitive marketplace, Farley realizes a car or truck has to exhibit a certain uniqueness if it hopes to be a hit.  That’s what Tesla has always been about – it’s electric, the doors, the giant dashboard screen.  Hey, some models actually fart on-demand.

As Farley notes, a Tesla doesn’t resemble the products built and marketed by the OEMs – and that’s a big part of its success.  In radio, differentiation is often nonexistent.  KISS sounds pretty much the same in Albuquerque as it does in Albany or Altoona.  Most stations run their commercials at the same time.  And contests and promotions tend to be variations on the same tried-and-true themes.

4. Employees – at all levels – need to know creativity, innovation, and agility are all welcome attributes – If you don’t ask the workforce to think differently, many simply won’t, content to do their jobs and sail through their performance reviews.  Farley’s philosophy raises that bar, putting emphasis on finding ways to change the routine, and in the process, be more efficient and nimble.

Photo: Tesla

5. Celebrate the successes, but don’t get complacent – Ford is enjoying electric success with its Mustang Mach-E, and its all-new F-150 Lightning, an electric truck they hope will be that game-changer for the company.  Farley, however, realizes that Tesla has its own Cybertruck (pictured) that looks and promises to be unlike anything we’ve previously seen.

As Howard points out – just like many radio operations – Ford is burdened with “legacy costs” that challenge the company’s operations, and ultimately its profitability.  There can’t be any laurel-resting when you’re under attack.  Farley points out that “While we’re making progress, and we are, we have lot of work to do.”  Good enough is not good enough.

6. You need a plan – Ford cannot operate with a focus on the next quarter, like most automakers – and most radio companies – once did.  Along with two other key C-level execs, John Lawler and Kumar Galhotra, Farley made it clear how essential it is the company follows the “clear and defined plan.”

That means analyzing everything, even after experiencing success.  What could have worked better?  Are there more efficient workarounds?  Can cars (or content) be produced more efficiently without sacrificing quality?  At Ford, there are no “victory laps,” even when the company experiences a great quarter and a rising stock price, both of which have recently occurred.

7. Don’t underestimate startups – It would be easy for Ford to become fixated on the behemoth Tesla, and Elon Musk’s brash approach.  (He goes after Detroit’s Big 3 on Twitter.)  Radio knows that story all too well.  It has become cool to troll AM/FM radio all over social media.  After all, who still listens to the radio.

Thanks for leading the way…. https://t.co/V5HpjAgl6A

— Jim Farley (@jimfarley98) October 28, 2021

But an obsession with Tesla would overlook upstarts in the auto industry, like Rivian, Polestar, and other new brands we expect to see at CES in Vegas this January.  Rivian has been around for a dozen years.  They’re an American company out of Wilmington, Delaware.  And as Farley reminded his Ford managers, they are now “shipping a pickup truck and an SUV.”  And “a dedicated electric van, which is our home turf, to Amazon.”

New competition – Clubhouse, TikTok – can come from anywhere.  Smart executives need to see the entire competitive field.

8. Look for the harder path – Phoebe Wall Howard quotes Ford employee, Ryan McManus, who was so inspired by Farley’s speech he sent the CEO an article about how the U.S. Army Special Forces operate.  They avoid well-worn trails, instead seeking new paths where they’re less likely to be followed.

If this sounds a little “blue oceany,” it is.  For Ford, producing another midsize SUV might be a necessary product, but if it breaks no new ground, its ultimate value to the enterprise is limited.  It’s the same in radio.  A new format that simply shuffles another 250 song playlist isn’t going to generate much initial buzz or a long-term win.  What can radio broadcasters do with content and delivery that is truly ground-breaking?  Farley would tell us that’s the bigger prize.

9. Respect the intelligence of your employees – That’s the underlying vibe in Farley’s words, his style, and his approach.  Howard quotes University of Michigan professor Erik Gordon:

“It’s unusual for top management to speak forthrightly and dispassionately about the reality that the company faces. I think it tells you, and this starts with the CEO, that Ford’s top management is not frightened by the facts, is not afraid of how employees will react to the facts. It shows a lot of respect for employees.”

In other words, “employees aren’t stupid.”  And when presented with the “givens” of a strategic challenge, many will step up.  In Farley’s case, this means an “open-book management style” where the Ford workforce can see the numbers, the financials, and the pain points.

Stacking up awards and paving the way for generations to come, we’re proud to honor the women of @Ford Motor Company on #InternationalWomensDay. #ChooseToChallenge #IWD2021 pic.twitter.com/L2W9RzJ47w

— Jim Farley (@jimfarley98) March 8, 2021

10. Balance praise with humility and reality – Howard also quotes Georgetown prof Melissa Bradley who notes that successful management requires a finely tuned mix of these traits that can be applied over the long term, not just next quarter:

“(Farley) is recognizing milestones in what is a long journey that will require dedication, commitment and excellence to be able to remain competitive amongst a fierce category of car companies and electric vehicles.”

11. Reality is a better motivator than fear – Professor Gordon that when employees smell fear, they rarely act in the company’s best interest.  Instead, facing the facts of the battle is an important step in employees buying into a plan.  He points out that “People fear the unknown and people’s fears often are twice as horrible as the reality.”

We have all seen this is in radio – in some cases, it is playing out today.  The “We’re gonna die” attitude becomes a barrier to innovation, resilience, and teamwork.

 

Broadcast radio is not the auto industry, as some of you may already be thinking.  But the analogies to Farley’s words and actions are applicable in any business, especially traditional companies and industries that find themselves reeling from new technologies, and smart, brazen competitors who aspire to be giant killers.

I am personally taking Farley’s call to action seriously, and I’ll be looking and listening carefully at CES in January to see how this philosophy plays out in a post-pandemic world.

What inspires you in his words, and how can we apply this to our roles, whether we’re the CEO, the local sales manager, the midday jock, or the staff engineer.  If radio is to mount a comeback, everybody matters, everyone counts.

 

Thanks to the Detroit Free Press’ Phoebe Wall Howard for the story.

Join us at CES, and see the future.  Information and registration for Jacobs Media’s tour is here.

You can read part one of “The Transparent CEO” here.

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