Ford's New Way Forward

It was with a fair degree of irony that I read in Monday's Wall Street Journal about Bill Ford's "way forward" on the very same page as an article about knowledge management and transfer.

Suffice to say that I think Ford is in far more serious trouble than it probably realizes, and more trouble than a few plant closings will solve.

When a CEO begins to tout his, and his company's, sudden embrace of basic marketing concepts taught to me, literally, in my introductory marketing course, MK100, 30 years ago, you know his company is in deep, deep trouble.

The salient strength of any company, and a salient measurement of my equity portfolio strategy's selection process, is success at identifying and selling to the right mix of segments in a company's market. If this is flawed, there is no basis for longterm consistently superior fundamental performance of the type that brings consistently superior total return performance over time, either.

What really struck me, however, is that this is at least the third time in 20 years that Ford has had to tout its (re) conversion to basic marketing. Is it not ironic that in the same issue of the Journal, on the same page, another article discusses how to recover important management and operations information within a company, and disseminate it among employees? When I was with Accenture, this was typically called "best practices". You would think that Bill Ford and his team might have invited Ford's erstwhile, successful Chairman/CEO team of Don Peterson and Harold "Red" Poling from the late '80s and early '90s, in for coffee, or more, to pick their brains.

From what I have read this morning in googled articles from that era, Poling had to do essentially what Bill Ford is attempting again. Maybe the latter has talked to the former, in private. For the shareholders' sakes, I hope so.

In the meantime, though, I wouldn't be buying Ford's stock. It may beat the odds and actually turn around in time, but it seems like an overly risky proposition to me. Any company that has to rediscover the sine qua non of a successful enterprise, which is great marketing and marketing strategy, is a poor bet for longterm consistently superior performance. In the auto sector, I'd even say it's more a question of survival, now, rather than longterm performance.