Discover how Ford’s new mindset led to a fundamental business shift
When you are tapped to lead a digital transformation project or a diversity initiative, where do you start? What do you leverage first when you need to create a shared service organization, develop an offshore business model, or lead a post-merger integration team?
- Strong team
- Solid plan
- All of the above
Our natural response is 3. Everything starts with a plan. We probably have a good team in place, but we need a new plan. And while our natural response isn’t wrong, we’re seeking the optimal approach to achieve transformational change.
The optimal approach is leveraging the mindset first. Why? When you are seeking a change of this magnitude, you are changing a system. A system is the invisible fabric of interrelated components including people, process, organizational structure, strategy, technologies, and more. But changing a system goes deeper than just creating a new plan. Yes, you need a strong plan and a great team, but the mindset is one of the top 3 leverage points.
System Leverage Points
Donella Meadows earned a Ph.D. from Harvard, was an MIT fellow, and worked alongside Jay Forrester, the inventor of system dynamics. She created the 12 leverage points of a system. The beauty of her construct is that if you focus on the #1 system leverage point, then 2- 12 are mitigated or eliminated. If you focus on #6, then 7-12 are mitigated or eliminated. At J2N Global, we help executives focus on leverage points 1-3, which are:
- Power to transcend paradigms (how you see the world)
- Mindset or paradigm that the system arises from – its goals, structure, rules, parameters
- The goal of the system
This concept is so powerful that, after presenting these leverage points in a recent client engagement, the president completely changed the second day of their schedule to focus on their paradigm—the “glasses” through which their company views their world. Armed with this insight, we focused on the impact of leverage point #1 to discuss how to successfully restructure their organization as part of a post-merger integration.
Ford Shifts Gears to Go Electric
Ford Motor Company is a 118-year-old auto manufacturer that launched the mass production of ICE (internal combustion engine) vehicles. As the electric vehicle (EV) revolution accelerates and people rethink their relationships with cars, automotive incumbents and upstarts plan for a radically different world—a new paradigm. How does Ford compete in this new world?
Ford gained the power to transcend its old paradigm by shifting from a security mindset to an opportunity mindset. As Ford’s chief product platform and operations officer Hau Thai-Tang explains in an HBR podcast interview with Azeem Azhar, you start by shifting mindsets, focusing on the most effective leverage points, and making internal “system combustions” to lead the transition from Oldland (symbolic state of being) to Newland (optimal future state).
Hau Thai-Tang suggests that EV uptake has transformed what a car is, what it means to own and drive one, which means Ford must change its mindset to thrive in the technology age. He discussed how doing away with combustion engines will revolutionize car design, why Ford is accelerating the exponential uptake of EVs within the next five years, and why carmakers will start to look more like Netflix and Apple. He explained that Ford couldn’t transition until they shifted their mindset (changed their paradigm). The “Great Change” (Tesla’s innovations, climate change, government incentives, and regulations) forced them to quit trying to improve ICE vehicles (Oldland) and transition to EVs (Newland).
The watershed moment came when Ford leaders realized that they had to stop thinking like an incumbent (anticipating and reacting to regulatory changes) and start thinking like a disruptor (creating the future). This move from a security mindset to an opportunity mindset is paramount. Ford’s business shift came from a single board member’s idea. That seed led to a new paradigm and the leverage point that determined everything else Ford would do in the future.
Start with Mindset
As a leader, you are expected to lead complex business challenges – transformational changes. Approach these changes by first focusing on the mindset. Changing a mindset takes time, but you will have paved an easier path to a successful transformation when focusing on this crucial leverage point.
Bill Poole is CEO of J2N Global and author of Journey to Newland.
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