Ford Motor Company today reported its first quarter net income was $2.6 billion, or 61 cents per share, a $466 million increase from first quarter 2010. Pre-tax operating profit was $2.8 billion, or 62 cents per share, an increase of $827 million from first quarter 2010. Ford also reported it had posted a pre-tax operating profit for seven consecutive quarters.
This is not just good news for Ford. It is good news for a particularly effective style of management, advocated by one of America's great innovators.
After a bad experience with an automobile built by one of Ford's domestic competitors, I read that Ford had hired W. Edwards Deming as a consultant on quality. Not long afterward, I bought a 1987 Taurus and have purchased Ford products ever since.
It wasn't that I thought Deming could magically and immediately bring Ford up to the quality of the Japanese auto makers to whom he gave advice not long after WWII. It was rather that I thought his hiring told me that Ford was now taking quality seriously. That meant a lot.
It turns out, Deming paid no attention to the details of Ford's quality control procedures. He examined Ford's management. It is management, he insisted, that is responsible for 85 percent of a company's problems with quality.
Problems don't lie to any significant degree with the workers, and cannot be corrected by the workers. Slogans and exhortations don't work, he insisted. Instead, he concentrated on changing the culture of management.
Good for Ford.
I'll have more to say later about some of Deming's ideas and how they might help address some of our problems in government and politics.