The Ford EV debacle is all about how strategy is always downstream to culture
Ford just wrote down $19.5 billion, killed their new flagship F-150 Lightning after only three years of production, and is now spending another $7 billion to scrap their whole EV strategy. If it's not the most expensive industrial pivot failure in recent automotive history, we're close enough.
One sentence in Jim Farley's interview with Car and Driver is worth more than any strategy off-site. When asked how Ford approached EV engineering versus Tesla, the CEO simply admitted:
They had no prejudice. We had prejudice. We'd gone to our supply-chain person and said, 'Buy another wiring harness.' [Tesla] said, 'Let's design the vehicle for the lowest, smallest battery.' Totally different approach.
Before any strategy failure, capital allocation problem, or talent gap, this starts with a reflex so deeply embedded in Ford's operational DNA that it was no longer visible as a choice, just the only way to go. The entire decision-making envelope is already constrained by an invisible, powerful gravitational field: Ford's corporate culture.
When many argue about the "what is culture?" question, that is exactly what culture is: not the values on the lobby wall or your nice keywords for investors, it's your organization's default mode when pressure spikes and no one has time to think. This is precisely where I start when training execs on decision-making in highly volatile markets: what are the first things you'd be ready to sacrifice when the going gets tough?
(What are the last ones?)
And that's the thing. You're not part of an executive committee (let alone become CEO) because you lack intelligence or business acumen. But as hard as you try, you're also not a rational actor, let alone the collective thousands of people behind you. The frameworks, OKRs, KPIs, roadmaps, and other smart processes are all deeply colored by your internal culture. When stress hits, System 1 takes the wheel, and cultural patterns dominate even more.
Interestingly, good leaders know this about their teams, and yet they almost never apply it to themselves or their own executive committee. In a crisis, so-called strategic alignment is often a sharp reinforcement of individual biases within what is politely called strategic alignment.
I don't know Ford enough, but I'd bet that Farley was an excellent CEO. Damn, this interview alone shows he's certainly more lucid and courageous than most in naming what went wrong. Overcoming a cultural operating system inherited from a century of heavy industry, one that kept generating "buy another wiring harness" responses, wasn't really on the table. Meanwhile, Tesla in retrospect looks like a genius operation, redesigning vehicle physics from scratch with no legacy to defend and no inherited playbook to default to.
In retrospect only. At the time? This was somehow the dumb choice for Ford, when you, you have billions in sales and investment to turn around and apply to a new, unproven market paradigm.
Farley even names the underlying mechanism directly:
If there are no regulations, then every OEM is going to go back to their cultural norm.
He's talking about emissions standards, but what he's actually describing is the iron law that strategy was always downstream.
Elsewhere in the interview, describing Ford's chronic internal politics, he says almost offhand that the fiefdoms and resistance only surface "when we're kind of in stasis. Not when you're in complete challenge mode." He's describing, without naming it, the central problem: the default mode activates precisely in the absence of crisis, gets temporarily overridden by one, then quietly returns the moment the acute pressure lifts. It happens in every industry, on every continent, in every organization that mistakes a strategic pivot for a cultural transformation.
In all this, the bias is not the problem. Pretending it isn't there is.
Biases are the residue of history, competency, and collective identity. They are also strengths, until the context shifts and they become blind spots. This is why I always cringe when extremely process-driven businesses, crowded with smart engineers, get the injunction of becoming an overnight customer-driven company.
The core principle is never to eliminate your cultural biases but rather name them, face them, embrace them and clearly map in which context do they serve you, and in which context do they blind you. The core principle is never to eliminate your cultural biases but rather name them, face them, embrace them, and clearly map in which context they serve you, and in which context they blind you.
As we speak, Ford will book $7 billion in special charges over 2026 and 2027 to close out its failed EV strategy. Another cost, the one that will not appear on the earnings call, is the cost of a collective losing faith in the vision of his leadership. Finding money is one thing; rebooting faith and engagement of 169,000 employees spread across a dozen countries under your leadership is quite another.
And obviously, this has nothing to do with the automotive market per se. You're living the same dilemma in banking, luxury, energy, defense, or any other market as we speak.
Still, after all this debacle, I could see a very encouraging possible change in Ford's culture through one Jim Farley's last comment:
As you redefine a software-defined product, with different levels of electrification, it turns out the electric architecture we're building for our vehicles isn't so different than electric architecture for a drone, isn't so different than the electric architecture for VTOL [vertical takeoff and landing aircraft]. It also turns out that as we start building batteries and getting closer to tech, we can build batteries, just like we built ventilators in COVID or bombers in World War II. And some of these adjacencies are very attractive businesses, number one.
This understanding is that, even if you're a highly process-driven incumbent, your product is not the core of your business, and process-driven business cultures have an enormous affordability once they 'let go' of their product: being able to rapidly pivot around their process.
This is how Fuji survived when Kodak failed.
Philippe MEDA
