Mark Fields speech: JD Power International Round Table,
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October 25th 2001
Mazda Motor Corp President Mark Fields has stated that Ford’s management shake-up will not affect his position with Mazda or the Japanese company’s direction. At a JD Power International Round Table meeting held on October 25th, he set out his long term vision for the company and the Mazda brand. It was an upbeat message envisaging a substantial and distinct role for Mazda within the Ford group. We reproduce the text of his speech here.
The bad news is-when we try to predict the future, we often get it wrong. The good news is-we often get it wrong because we underestimate the possibilities.
Maybe, when it comes to predicting the future, we can take a tip from the Washington DC cabdriver who helped a tourist understand the inscription on the National Archives Building in that city. As the tourist passed the building, he noticed these words carved into the marble façade-THE PAST IS PROLOGUE.
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By GlobalData“I don’t get it,” the tourist said, “What does it mean?”
The cab driver told him, “It just means this-‘THE BEST IS YET TO COME”
I believe that’s true for Mazda. The words carved into that building-and the cabdriver’s interpretation-sum up what’s ahead for Mazda. The past is prologue-and the best is yet to come.
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| President of the Mazda Motor Corporationm Mark fields |
Today I’m going to talk to you about Mazda 10 years from now-and about the things we’re doing to ensure the future for Mazda-some of them exciting, some practical, some tough, and some-frankly-painful.
But first, I’d like to talk a bit about where Mazda fits into the automotive scene-our history-and what exactly there is about Mazda that’s the key to our company’s survival and success.
Mazda is a great 81-year-old company that started out in Hiroshima in 1920 as a tiny cork manufacturer. Today, we are a global producer of commercial and passenger vehicles-selling our products in more than 130 countries around the world.
We boast a strong engineering heritage, great innovative products, and advanced technologies.
In the past, Mazda’s heritage has been one of “daring to be different,” and of doing the “unconventional rather than the conventional.”
People talked about the “Mazda spirit.” And people joined our company because of our history-they joined because we were not like the other competitors in Japan-because we had a unique and exciting identity. In the past, our understanding of our identity was clear throughout our organization-and expressed itself clearly in our products and services.
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| The Mazda MX-5 |
As an example of that you only need to look at the success of our Mazda Roadster. Known as the MX-5 in Europe and as the Miata in North America-the Mazda Roadster was recognized last year by Guinness (the World Records Keeper) as the “world’s top-selling lightweight open two-seater sports car”-with more than a half a million units produced since 1989. Meaning it only took ten years for this Mazda brand vehicle to establish itself as the best-selling sports car in the world.
Mazda also is synonymous with the rotary engine starting with the release of our first rotary-powered sports coupe back in 1967.
Our rotary engines have won major racing victories at such places as Daytona.. And, in 1991, our rotary engines achieved one of the most prestigious honors for performance and power-a first-place victory at the grueling 24 Hours of LeMans-making Mazda the only Japanese car to win the LeMans-and the Mazda 787B the first rotary engine-powered vehicle to garner this top award.
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| The Mazda 787B |
Over the last five or ten years, I believe we’ve made some right moves, but I also think we’ve made some mistakes. One of the key mistakes was that we lost sight of that Mazda spirit. We moved to the middle of the market to a quote-unquote “safer” area of design, engineering and marketing. And that distanced us from what made us successful. Compounding the error-inevitably in the process of our move to the middle-we began competing with other manufacturers on their terms.
That’s a losing dynamic. And we’ve put a sharp brake on it. Today our strategy is not to compete with any other company, but to return to our roots-
– back to the “white space” in the market that we know we can own;
– back to being unconventional-and daring-and different -all the things that created our heritage of producing the world’s leading sports car.
We intend to be successful the way Mazda has always been successful-competing on our terms, not on somebody else’s.
Over the last two-to-three years we’ve worked to re-instill the Mazda spirit throughout our organization. Today, I’m going to tell you the highlights of that initiative-and then share with you what I think Mazda will be like 10 years from now. But before I do that, I’d like to share with you my opinion at how the auto industry as a whole is changing and what one could expect the industry to look like ten years from now.
We know that technology, green initiatives and customers’ demand for increasing levels of safety and value and convenience-will revolutionize many aspects of the automotive purchase and ownership experience in the next decade.
Ten years from now, the present restructuring, rationalization, and refocusing we’re seeing in the automotive industry will have created an auto industry that’s boundaryless and global-not regional as it is today. Within the next decade:
All players will be linked together in some form or fashion. Due to squeezed margins there will be more joint ventures and partnerships with suppliers-supplier parks, for example will be more commonplace.
Costs associated with advances like new hybrid propulsion systems, or new regenerative braking will mean more shared development efforts.
Complex trends and regulations in markets-such as we’re seeing today in Europe-will result in more lightweight, recyclable, and reusable product elements.
The issue of CO2 and of global warming will reduce petroleum-based products-99 % of the market today-to 70-75 % of the market. The remaining percentage will be AFV’s including vehicles powered by fuel cell technology, hybrids, and to a lesser extent, electric vehicles.
Combustion technologies such as stratified injection will be standard.
There won’t be as much disparity between shopping on the Web and the traditional retail experience. The buying experience will be seamless-far more integrated with online resources than it is today. The Internet will enable consumers to locate inventory in large geographical areas, or place custom orders directly with the factory. Information will flow seamlessly between customer and factory, eliminating high inventory costs.
The Internet will also play an important role in supporting and building customer relationships throughout the ownership experience. Integrated communications between the customer, dealer and manufacturer will provide tremendous customer convenience and will significantly lower service costs.
I also believe that within a decade, we’ll see some harmonization of governmental regulatory standards. This will reduce engineering and design costs by commonizing homologation requirements, for example, by making crash and emission standards uniform across the globe
But, most importantly, ten years from now we won’t see any bad products-only good, very good, and great products.
This means brand image will be more critical than ever. At Mazda, we know that means the specific characteristics and values customers experience-in connection with our products and services-throughout the lifetime of their ownership experience-will be key. And brand marketing and relationship marketing will play an even greater role as differentiators. The key question customers will ask themselves when deciding to buy is: “What does this brand say about the kind of person that I am or want to be?” We are very aware of this as we look to Mazda’s future.
Today, the painful truth is that there are two kinds of automotive companies-those that are competitive-and those that are dying. For the last year, my mantra at Mazda has been “Change or die.” And obviously there’s a subtext to that mantra. It’s, “By the way, death is not an option.”
The organization has responded resolutely, “We’re going to change.”
I’m reminded of something a Japanese colleague shared with me. He told me some interesting facts about the way two specific Japanese words are constructed. He said that two Kanji characters – the Chinese calligraphy used to represent Japanese words – are combined to create the word for “crisis”. I was told that the first Kanji character in “KIKI,” or crisis in Japanese, means “danger or hazard,” and the second Kanji means “a meshing of events or a beginning.”
What’s interesting is that if you take the second Kanji in “KIKI,” that stands for “a meshing of events or a beginning,” and combine it with another Kanji that ordinarily means to “meet or gather” – a new word is formed – “KIKAI.” It means “opportunity.” This other Kanji also has the meaning of “a chance,” which is the sense in which it is used in “KIKAI”.
This fact gives us an insight into the wisdom of the people who created the meanings for these words. They seemed to understand that what distinguishes a “crisis” from an “opportunity” is positive action. You act to create your own chances. Push “danger” out of the picture and replace it with positive action to create your chances – and you have “opportunity.” All of us at Mazda are committed to creating our own chances, or opportunities.
Today you can feel the excitement and a growing sense of expectation in our company. If you visit Mazda these days, you’ll find the hallmarks of a company in transition. There’s a building of tension. There’s a heightened sense of alertness. There’s an increasing intensity. And there’s a keen sense of urgency. Is it comfortable? Not always, no. Is it positive? You bet.
There’s a wonderful Japanese word that pretty much sums up the energy that’s building throughout Mazda today: SHIFUKU. It’s made by combining the Kanji for “lying low” and for “female”-and to the women in the audience, I can only guess that the “female” part of the equation is because women are always a little ahead of us men anyway-At any rate, it means “lying low in preparation for making a great leap forward.” SHIFUKU exactly describes the mindset at Mazda now, and all the things we’re doing to lay the groundwork for our company’s future. It won’t be long before you see us release all that energy to make a tremendous leap forward.
Let me tell you what Mazda won’t be 10 years from now. Mazda will no longer be described as “the struggling Mazda Motor Corporation”-or the “ailing” Mazda Motor Corporation-or the “debt-ridden” Mazda Motor Corporation. Ten years from now, Mazda will have earned the right to survive and thrive.
Here’s a picture of Mazda 10 years from now:
Mazda will be known as a manufacturer and marketer of aspirational products that will embody our brand DNA in exciting products that meet-and create-the demands of a clear-cut target market.
We will distinguish itself as a company with a unique corporate culture-reflected in unique products-that have a definite personality-a personality that combines the latest technology, professional craftsmanship and warm human elements.
I mentioned earlier that a key question customers will ask themselves when deciding to buy is: “What does this brand say about the kind of person that I am or want to be?”
Well, in Mazda’s case it will say ” I am a person who is open, creative, and one who is comfortable about expressing their individuality…A person who is passionate-about my job, my life, my career, my vehicle… I am somebody who enjoys life to the fullest-and I want my vehicle to reflect that…A person who is self-confident about my choices- I say, “Forget about ‘go with the flow’-I go with what pleases me and that includes a great driving experience.”
Ten years from now, Mazda will be known as a player that specializes in high-technology-content products with lively “human” personalities -unique, exciting, aspirational Japanese vehicles that will be positioned outside the mass market, appealing to buyers who prefer not to choose mainstream offerings -“fun-to-drive” products that feature distinctive design and dynamic handling and performance, or in others words a driving experience that creates a “oneness” between the car and the driver.
Mazda will be a leader in customer satisfaction-providing customers with a seamless experience-from initial-communication-to-purchase-to-delivery-to-return-for-recycling. The customer will have more power of choice than ever before. Mazda will embrace new technologies that ensure the customer rules. Simply put, Mazda customers will find it very easy to do business with us.
Ten years from now, Mazda will be a leader in speedy adoption of in-vehicle technologies. Mazda’s IT innovation-especially important to Japanese consumers-will be a critical component of our brand identity.
But within 10 years from now, the clearest indicator of what Mazda is all about will be Mazda’s people.
Historically, Mazda’s strength lies in its engineering and manufacturing. We have a history of being an engineering-driven company. But we know that we need to shore up our understanding of the customer-and to strengthen our sales and marketing efforts.
So the people we are bringing into the Mazda team today are very keenly customer focused-who continually have their antennae up-tuned to the customer’s frequency and constantly seeking external input. We want people who find ways to give customers what they want-sometimes before customers know what that is.
Today, the ideal Mazda employee also is a person with strong gamesmanship skills-someone who can test rigorously on a tube vs. a test bed-Internet-savvy, with mastery of Playstation-type processes. These are the people we’re bringing into the company today to lay the groundwork for the Mazda of the future.
We’re building a team that will enable us to conduct “business at the speed of thought.” with information throughout the company made transparent through technology and the Internet.
This business-at-the-speed-of-thought approach means less time spent looking for information; and decisions made quickly because what’s needed is only a keystroke away. It means fully informed Mazda people able to make better work-related decisions. It means functional walls becoming irrelevant, and the organization flattening or better yet, becoming more web-like. In short, it means a culture that’s beautifully in sync with the heritage of Mazda spirit.
To me, culture is a combination of behaviors and beliefs. We’ve laid the groundwork for our revitalized culture by being clear about what behaviors we will reward at Mazda. We have been very specific about communicating the behaviors we want. In particular, we’re driving down responsibility and delegation of authority throughout the organization. I want the person who’s best qualified to make the decision to have the authority to make it.
This is a departure from the way things have traditionally been done in our company. We are encouraging leadership at all levels of the company. Over the last 2 years we’ve clearly signaled-with significant changes to our compensation system, education, and overall HR policies-that we want the kind of people who will-responsibly-embrace risk to achieve success. We are clearly communicating and defining accountability, because without accountabilty, results become a matter of luck, and we will not run our business based on luck.
Within the next 10 years, I believe our people will be in many respects be the envy of the industry — engineers, designers, marketers, managers, and executives known for their different ideas, their passion, their flexibility, their unswerving commitment to customer satisfaction, and their technological savvy.
Ten years from now, and quite probably even before then, almost all of most senior management positions in our company, including the President will be Japanese. We have put in place a disciplined process to develop Mazda’s high potential executives and our general population. We’ve instituted a much more disciplined approach to people development-something we consider equally important to-because it’s so vitally connected to-product development.
We’ve planted the seeds. And we expect a bumper crop
Ten years from now, women will constitute about 35% of Mazda’s management ranks-a historic change for any Japanese company. (Our present figure is 1%.) We have initiated many diversity programs including specific development programs for high potential women.
Ten years from now, Mazda will be at the top of the ranks as a preferred employer because of our employee-friendly policies and programs. We have implemented a number of policies over the last two years in this regard. We have already been recognized as a leader in Japan for female-friendly policies, and we aim to maintain and build upon that reputation.
Where will Mazda be vis a vis Ford within the next decade?
Mazda will remain the flag bearer for the Ford Automotive Group in Japan. With the luxury segment (Volvo and Jaguar) excepted, Mazda is Ford’s only significant middle-market presence in Japan, and will remain so. Clearly it’s important to the Ford group to maintain a presence in Japan because Japan is a key market in the global automotive industry-not just in terms of sales-but also in enabling the Ford group to keep abreast of what’s going on in Japan with its Japanese competitors-as these companies affect Ford to such a large degree outside of Japan.
Ford has recognized Mazda as a global center of excellence for developing front-wheel-drive, mid-size vehicle architectures for the Ford Group-and as a center of excellence for engineering new large four-cylinder engines.
Strategic Review- |
Through regular forums and visits of Ford people to Mazda’s manufacturing plants, we are able to share our manufacturing expertise with Ford-much of it far ahead of what other companies are doing-including modular production methods-in which we are more than a decade ahead of some competitors.
Mazda, in fact, initiated modular concepts in 1972 with our then-new Ujina plant in Hiroshima. In 1982, we took it to the next level at the Hofu Plant where we created the world’s shortest assembly line-only 760 meters long. (And it’s still one of the shortest relative to the plant’s annual capacity-which is 250,000 to 300,000 units.)
Mazda also shares with Ford advances embodied in the Mazda Digital Innovation system, or MDI, which enables us to use computers in digital prototype creation and pilot production – a flexible and highly efficient process that keeps our facility tooling investment minimal. The bottom line for our MDI is what we call Zero Prototype programs. As the Zero Prototype name implies, we are in the process of reaping vast savings in time and money by completing the traditional product development testing phases in the virtual world.
I see Mazda playing a leading role in manufacturing, manufacturing technology and manufacturing flexibility in the Ford group. I foresee us enjoying a growing role in the Ford group through our leadership in small powertrains, and possibly in some areas of emissions, economy, and specialized areas such as lightweight body construction.
Bringing us back to the present, 2001 has been a pivotal year in Mazda’s history.
In the fourth quarter of last year, we adopted our Millennium plan-a growth-oriented, mid-term business strategy that will serve as our roadmap for next 5 years. It reflects “hard choices”- difficult, yet absolutely essential actions that will enhance our competitiveness.
These included:
– The recent closing our Ujina 2 plant in Hiroshima which reduced our annual capacity by 25 percent;
– Establishing a production base in Europe with Ford. We plan to start producing cars at a Ford plant in Valencia, Spain, in 2003, an action which will significantly reduce our exchange rate exposure;
– The reduction of our salaried personnel levels in the company by over 20% through our early retirement program that was accomplished last March
Increasing spending on new products over the next five years by over 30 percent compared with last five years;
– And the acquisition of the Mazda distribution in Europe in key markets which represents over 70% of our European volume, in order to be in a position to strengthen and grow the Mazda brand.
But the most important effort we’re making is to relaunch-to redefine, in a lot of people’s minds-what Mazda means-through our marketing efforts, yes, but predominantly, and most importantly, through our new product. We are building on customers’ preferences for Japanese design uniqueness, craftsmanship and quality and the quality and innovation attributes associated with Japanese brands-and adding to this the appeal of Mazda’s unique brand attributes. Stylish-Insightful-Spirited.
Our brand message is captured in our theme for this year’s Motor Show-“Zoom-Zoom.”
Zoom-Zoom is a sound English-speaking children make. .” It’s the sound children make when they imitate a car engine. It captures a feeling-the joy and exhilaration you experience when you first discover motion. It’s a feeling we believe it’s possible to re-capture. It’s exactly what Mazda aims to deliver-the EMOTION in Motion-movement that’s exciting and exhilirating.
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| The new Mazda RX-8 |
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| ….and Atenza |
We are in the process of laying the real groundwork for what we will be ten years from now as we successfully re-introduce the Mazda brand-and that will happen “as the rubber meets the road.” In this case, the “rubber” is Mazda’s new product.
I’m happy to say the rubber is rolling. Only yesterday, we introduced two all-new vehicles at the Tokyo Motor Show press preview: the “Mazda RX-8” sports car and the “Atenza” five-door hatchback. (Called the “Mazda 6” in overseas market.)
The Atenza and the RX-8 embody the Zoom-Zoom experience-the essence of Mazda’s brand personality-delivering eye-candy design, exciting performance, world class safety and environmental responsibility-with the RX-8 featuring the four-door freestyle door system and the RENESIS, our rotary engine for a new millennium.
Is it unrealistic to forecast a glowing future for Mazda at the tail-end of a year that has been as challenging and demanding for our company as 2001? I don’t think so.
Mazda will soar again.
At the beginning of my speech I mentioned the dangers of underestimating the future….speaking of that again, it reminds me about some quotes I recently read from a book about the development of flight.
A few years before man took to the skies, a University of California professor concluded that “a true flying machine . . . is physically impossible.” The world-famous Thomas Edison added that, “It is apparent to me that the possibilities of the aeroplane…have been exhausted.” And, in 1901-just two years before the historic first manned flight at Kitty Hawk, Wilbur Wright-the man who flew that plane at Kitty Hawk-told his brother Orville, “Man will not fly for 50 years.”
That’s some serious underestimating.
Another flyer, Charles Lindbergh, said this, after crossing the Atlantic solo-a feat many people had considered impossible-“We have accomplished our objectives, and passed beyond them.” He added, “We actually live, today, in our dreams of yesterday, and living in those dreams, we dream again.”
I have every confidence that Mazda, 10 years from now, will be looking back at these objectives of the future I’ve outlined for you today-these “dreams of yesterday”-and living them.
