An Interview with Marv Adams and Jeremy Seligman

To become and remain successful in today’s business climate, companies in all industries must adopt leading-edge ways of dealing with interdependence. Spearheaded by Marv Adams, senior vice president and chief information officer, Ford Motor Company’s IT function has drawn on lessons from the natural world to transform its operations and lay the foundation for creating an “adaptive business.”

In a keynote presentation at the 2005 Pegasus Conference, Marv will discuss the transformational journey of Ford Motor Company’s IT group as it faces a world where the methods and competencies of the last 50 years are no longer adequate—a world in which it is not the fittest who will survive, but those most willing and able to learn and adapt to change. Jeremy Seligman, director of IT Strategy and Organizational Development, and his colleague Shelia Covert-Weiss will follow with a concurrent session, “The Nuts and Bolts of Transformational Change: Building New Capacities in Ford’s IT Activity.”

In the following interview with Leverage Points editor Vicky Schubert, Marv and Jeremy discuss Ford’s innovative approach to developing organization-wide capacity for adapting to the demands of a changing world.

LP: “Embracing interdependence” is the theme of the Pegasus Conference you’ll be addressing this November in San Francisco. Can you comment on why the idea of interdependence is so relevant to your efforts to build the capacity for learning and adaptation in Ford’s information technology (IT) organization?

MA: The world is becoming increasingly interconnected. The global economy, for example, is interconnecting countries and companies and supply chains that haven’t been as directly connected before. The Internet is interconnecting people across the globe. Various forms of communication systems, like satellite communications, are interconnecting people and objects and things in unprecedented numbers.

When you think about this level of interdependence and connectivity, it’s pretty easy to see how one change can ripple through and affect all the other things that are connected to it. With the density of connections going up, the amount of change that ripples through the world goes up. Some of that change is insignificant; some of it is substantial.

Almost every day you can pull examples out of the paper. The one that we’re all dealing with right now is Katrina. A hurricane blows through the Gulf Coast of the U.S., and the price of fuel increases dramatically around the world. If that isn’t an example of interconnectedness, I don’t know what is.

So, that’s the baseline that applies to everything. And IT, certainly, is a business where interconnectedness can have dramatic consequences. When a kid has a few extra minutes on his hands and writes a little virus that takes down a system on Wall Street — that’s an IT issue. It’s something we think about every day. We’ve discovered that traditional methods do not protect us from that kind of threat. We have to view it in the same way that an immune system looks for anomalies in the body and deal with them in a much more sophisticated way than simply loading virus protection software on every computer.

LP: An immune system’s response to a virus is a great example of a lesson from the natural world that can help us manage our current organizational challenges. Can you share another example of an IT problem at Ford that calls for this kind of systemic thinking?

MA: Here’s a great example of how a change in one component of the system rippled through to create challenges and opportunities in other components. When the failures of Enron and WorldCom triggered a concern about the integrity of financial reporting in American companies, Congress felt they needed to intervene to restore confidence in the capital markets. The legislature rushed the Sarbanes-Oxley act through, and suddenly public companies faced a whole new set of regulations. The change was a big deal for almost any public company; it became an extra big deal for a company as big and complex and as old as Ford.

We had to respond immediately to something that was bigger than anything we had ever faced, including Y2K. We had to completely change how our culture viewed the importance of controls and compliance. To do so, we had to understand our system and its multitude of interconnections well enough to ensure that the changes we made would lead to far fewer financial controls issues for the company. And we nailed it. In a very short period of time, we, as a team, trained 11,000 people on a new control system built using systems thinking and complexity science theory.

JS: We were able to leverage the harmony between systems thinking and complex adaptive science, using systems thinking to help us understand the deeper structures that constitute a system and the complex adaptive systems work to help us adjust those structures in ways that we couldn’t have seen without that discipline.

LP: You and your team have implemented an innovative program for developing systems thinking capacity at Ford. Can you tell us something about the initiative?

JS: One of the things that we have observed is that while people get excited about systems thinking, it turns out to be difficult for an organization to internalize it in any sustainable way. We’ve been working on an approach to building organizational capacity in such a way that learning about systems thinking is not limited to, as it too often is, drawing causal loop diagrams. You really need to start with a clear understanding of the iceberg—the relationship among events, behavior, and structure—and how mental models really drive what we’re able to perceive. And that involves creating a lot of familiarity with the tools and concepts of systems thinking, as well as building a new group of practitioners who can actually take people through the stages of discovering the leverage points for change inside of a system.

When we talk with companies whose initial interest in systems thinking has ebbed away, we find that their early excitement about the introductory tools wasn’t grounded sufficiently in the deeper systems frameworks and disciplines.

LP: As your young leaders sharpen their systems thinking instincts and skills, do you worry about them being able to hang in there in spite of the resistance they are likely to encounter in a long-established company like Ford?

MA: Yes and No. I say yes, I worry, because they face both unconscious and conscious resistance: unconscious in that there are a lot of people in the organization who are just enacting a decades-old control culture rooted in the belief that you can understand everything about the system, just like you can understand everything about a car. If you understand everything about a system, then you can put controls in place for the different pieces and parts of it. But when you introduce thinking that looks at the system across the whole rather than at pieces and parts, people begin to see it as an interconnected part of a bigger world and encourage new behaviors that work in the favor of the whole. And of course, at times, that approach triggers an immune response in the old control system that can be frustrating and, at times, even dangerous for people trying to think and act this way.

But I say no, I’m not worried, in that, for those who have really changed their way of thinking, there’s no turning back. You can’t see the world the same after you see it this way. And so, leaders become passionate, and it’s a good and liberating thing for them. They learn to anticipate different responses from the immune system and don’t get surprised by it when they occur. I would say that the ones who get most frustrated are the ones who have dipped their toe in but haven’t fundamentally changed their way of thinking. They can get discouraged and move on to the next episodic flavor-of-the-month corporate strategy.

LP: What kinds of changes are you already seeing that lead you to believe that your organization is becoming more adaptive?

MA: Within the company, of course, we’re on a journey. To say this discipline is mainstream at Ford would be a stretch. But the company has an appreciation for the systemic way we look at problems and has even turned to us to lead efforts in non-IT areas, where we’ve used these approaches with impressive results. So, this is a journey with considerable promise.

The American automotive industry has gone through some difficult times. We all recognize that we have to seriously reevaluate the way we conduct business. It’s impacting the way we think about long-term relationships with suppliers, about how and where we engineer product, about what “culture” means. And there’s nothing like really difficult times to get you to change your mental models, because they bring a sense of urgency that you typically don’t have when times are good.

In some areas, the challenges we face make people hang onto the past even tighter. But, in general, I think there’s more space for this kind of approach because the ways of the past aren’t serving us particularly well right now.

We’re on a practice field trying out new methods and new tools on the fly. It’s both extremely exhilarating and exasperating. We aren’t doing this because we think it’s fun. We’re doing this because we don’t see any other way to deal with the increasing complexity that we’re facing. I think we have a leading-edge view of complexity because of the nature of our business, and we’re turning to methods for dealing with it perhaps faster than other businesses do. And yet, I think people in every industry will eventually have to understand complexity because of global interconnectedness.