How Ford Profits from its ’24 Hour Rule’

At Ford Motor Company, we’ve spent the last few years engineering a well-recognized turnaround. One of the key tools we’ve used to accomplish it is something we call the 24-Hour Rule. It’s a management practice based on a favorite saying of Ford’s CEO, Alan Mulally. As Alan puts it: “You can’t manage a secret.”

Enormously complex undertakings—such as planning, designing, developing, manufacturing, marketing and selling a full line of high-quality vehicles—inevitably come down to tactics and execution, to the day-to-day management decisions that can keep the system running smoothly or stop it in its tracks.

At Ford, the vehicle launch process, when product development is completed and we begin to manufacture a new vehicle and send it to the dealers, is a very tight, synchronized period. Everything has to work together smoothly. It’s a critical, months-long phase with a rigorous cadence, and the closer you get to what we call “job one”—the first vehicle that will actually be sold to the public—the more crucial the timing becomes. To finally assemble a car, from 1,500 to 3,000 parts have to come together from various sites and locations around the world. There’s a lot that can go wrong.

We spend a lot of time hunting for problems. During launch, people are driving cars, they’re running tests, and they’re doing things that can lead to the discovery of a new complication that could delay a launch. Say I’m an engineer who suddenly finds such a problem. I probably want to solve it on my own if I can–that’s human nature. But it’s not the right impulse. If I sit on a problem for too long, working on it in isolation, the whole team—and the launch timeline—may suffer.

So we put a rule in place. It says: ‘You have 24 hours to take a new and emerging issue, try to understand it and see if you can resolve it yourself. After that, you have to go public with it.’ It’s an escalation process. Because with a lot of these issues, we can solve them pretty quickly by applying the intellect we have in this company.

Other times, instead of keeping problems to themselves or their team, people will say ‘Okay, this issue is coming up,’ and ask us to bring it to the table at our regular senior leadership meetings. We only bring the best data we have into those sessions, but in a situation like this, the team may not have enough information for senior leadership to act on. So rather than presenting it to senior management without knowing the full magnitude of the problem, we’ll tell the team: ‘You have 24 hours to vet the issue and then bring it into the meeting for help.’

The 24-hour time period is something of a theme at Ford. It’s a useful tool, an iconic yet practical measure of performance. For example, we have another rule that every warranty claim or other complaint that comes into a Ford plant from dealers or customers is addressed within 24 hours, guaranteed.

The 24 hour rule is one simple step in a broader process that’s begun to show results. Ford has significantly improved the quality of our vehicles over the last five years, and the car-buying public has responded. We just announced our sixth straight profitable quarter—one that made Ford “the world’s most profitable automaker,” according to Bloomberg. Our U.S. sales are up 21 percent this year through September, twice the industry average, while our market share reached 15.9 percent in the third quarter, up from 14.6 percent a year earlier. Earlier this year Ford achieved its highest ever finish in the J.D. Power and Associates Initial Quality Survey.

There are lots of reasons—thousands of them, really, if you consider the number of individual Ford employees who helped make it a reality—why this “Ford turnaround,” as it’s been called in the media, has been successful. We have strong leadership, a dedicated workforce, a unified strategy and a very fluid communication process from the shop floor to the top of the house.

Rome wasn’t built in a day, and Ford’s quality turnaround didn’t happen overnight. But when put to good use, 24 hours can make all the difference.

Fowler is Ford’s Group Vice President, Global Quality and New Model Launch. Prior to joining Ford in 1990, he spent a dozen years with Chrysler and General Motors.

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