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When it pays to clean house

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in Leaders & Managers,Leadership Skills

Upon becoming CEO of Ford Motor Co. in 1999, Jacques Nasser sought to change the culture of the struggling automaker. He had joined Ford as a financial analyst in 1968, so he knew the company inside out.

Ford’s internal dynamics did not en­­cour­­age cross-departmental teamwork. One of Nasser’s top priorities as Ford’s new leader was to shake up the independent fiefdoms that prevailed at the time.

Nasser wanted to bring the various camps together to collaborate and focus on filling customer needs. But in trying to achieve that, he made a big miscalculation.

Nasser knew many of Ford’s senior executives, and he believed he could orchestrate a cultural overhaul with those same individuals remaining in place. He sought to give them a chance to join his change crusade.

What Nasser failed to realize is that when people become entrenched, their old-guard attitude prevents them from embracing change. They prefer to protect their interests at the expense of the company as a whole.

During his nearly three years as CEO, Nasser never overcame Ford’s internal politics. The people he inherited didn’t work together as Nasser had hoped; instead, they continued to preserve their power base and stay within their silos.

Nasser’s decision not to clean house and bring in a fresh group of managers stymied his progress. Had he hired outsiders, he may have infused Ford with fresh thinking. And the newcomers would not be wedded to perpetuating the status quo.

— Adapted from “Should A New Leader Clean House?,” Geoff Colvin, www.fortune.com.

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