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Alan Mulally, Ford, and the 6Cs

Subscribe to the center for universal education bulletin, elizabeth haas edersheim elizabeth haas edersheim founder - new york consulting partners, adjunct professor - nyu tisch global school of sports management @elizedersheim.

June 28, 2016

Editor’s note: In the “ Becoming Brilliant ” blog series, experts explore the six competencies that reflect how children learn and grow as laid out by Kathy Hirsh-Pasek and Roberta Golinkoff in their new book  “ Becoming Brilliant .”

When Alan Mulally took over Ford Motor Company in 2006, it was a struggling American icon, a once-great organization that had for too long been living in the past, coasting on its reputation, and avoiding realities.

At its core, this was an organization constrained by bureaucracy and bad habits. Mulally’s leadership transformed Ford’s culture, enabling it to not only pull itself out of the mud but to get back on the road and take off.

How did he do it? Whether he realized it or not, Alan Mulally employed and fostered the 6Cs in his leadership :

• Returning to the founding values. Mulally restored the values—watered down by previous chief executives—that had made Ford a trailblazer in its early years. This created a basis for fresh, purposeful, and honest collaboration.
• Making Ford “one” company. Tearing down Ford’s independent, isolated functional silos helped set the stage for dialogue and open communications .
• De-bureaucratizing through accountability. He recognized that bureaucracy-driven paralysis was a barrier to employee confidence and critical thinking that had to be removed.
• Rewriting the model for Ford’s way of doing business. The old model passively relied on relating to customers through brands and dealers; the new model actively connects employees to customers—building on content to drive creative innovation delivering the very best cars to customers.

Mulally and Ford: The stories and the challenges

In 2006, when Bill Ford tapped Alan Mulally to be his company’s CEO, Ford was looking for an outsider who would challenge the way things had always been done. Ford was losing nearly $6 billion a quarter. Its debt had been classified as junk; analysts whispered about bankruptcy.

After his first day at Ford, Mulally wrote ,“We just need to act on the reality. Then we’ll be back making the best cars in the world.”

Mulally had heard the same comment from both executives and customers: Ford had let itself go. Although the company made good cars and crossovers in Europe, in the United States, consumers thought of Fords as unreliable gas-guzzlers, disparaged them as “Fix Or Repair Dailies,” or didn’t think about them at all. This was the reality Mulally knew Ford had to act on.

Mulally also studied the company’s history. Everything Mulally was learning, concluding, and planning evidenced his own inherent 6Cs skills—with confidence driving the other five.

Returning to founding values: Collaboration

As Mulally examined Ford’s history, he saw that the company Henry Ford founded had changed the world and created prosperity for generations.

He found an ad Henry Ford had placed in 1925, depicting a young couple standing next to their Model T. The caption read, “Opening the highways to all mankind.” Beneath it, Henry Ford outlined his vision:

An organization, to render any service so widely useful, must be large in scope as well as great in purpose. To conquer the high cost of motoring and to stabilize the factors of production— this is a great purpose.

In accomplishing its aims the Ford institution has never been daunted by the size or difficulty of any task. It has spared no toil in finding the way of doing each task best. It has dared to try out the untried with conspicuous success.

At the next board meeting, Mulally presented a slide with the old Ford logo’s blue oval at its center marked “Vision.”  He defined this as “People working together as a lean, global enterprise for automotive leadership.” By leadership, he said, he meant all being viewed as second to none.

And leading by example, Mulally lived collaboratively—he ate with employees in the cafeteria and regularly conversed with secretaries and assembly line workers.

De-bureaucratizing and creating One Ford through communication

Mulally made difficult decisions. He sold off glitzy and high-profile makes of cars, including Land Rover, Jaguar, Aston Martin, and Volvo. He brought back the Taurus — and focused on One Ford.

He also restructured the fragmented organization, integrating the regions and functions making each business unit fully accountable, while ensuring that each key function—from purchasing to product development—was managed globally. This structure facilitated critical and integrated thinking. Mulally wanted to create One Ford to have one team communicating and working together while serving each market in a unique fashion.

Every Thursday, Mulally held his “business plan review,” or BPR. Attendance was mandatory for all senior executives. Each was expected to communicate succinct status reports with a distilled set of tables and charts updating each other on progress toward the company’s goals.

In his first BPR, Mulally stopped the meeting halfway through. “We’re going to lose billions of dollars this year,” he said, eyeing each executive in turn. “Why is every line green? Isn’t there anything that’s not going well here?” The executives later admitted they hadn’t believed Mulally when he’d promised that honesty would not be penalized. That’s why all their lines were green.

Mark Fields, president of Ford Americas at that time, stared at the line for the new Ford Edge, as he prepared his slides for the second BPR meeting. Production had already begun on the car, but a grinding noise coming from the suspension had been reported.

Fields knew that delaying the launch might bring down the as-yet-unfathomed wrath of their new CEO. It was the end of the year, when Ford executives traditionally pulled out all the stops and cut whatever corners necessary to hit their sales targets. But, that was the old Ford.

At the second BPR, Fields’s slide showed red. There was dead silence. “Dead man walking,” thought one of his peers. “I wonder who’ll get the Americas,” another mused. Suddenly, someone started clapping. It was Mulally. “Mark, that’s great visibility,” he said, beaming. “Who can help Mark with this?”

Thus was born new collaboration at Ford, born of honest communication.

When that meeting ended with Fields still in charge of the Americas, most of his peers had reached the same conclusion: They needed to communicate honestly. A week later, everyone’s slides were splattered with more red than a crime scene. Mulally thought, “Now I know why we’re losing so much money! But, they trust me. They trust the process. We finally have it all out in the open. Now we can start fixing it.”

From this point, confidence bloomed, communication flowed, collaboration grew, and critical thinking was unleashed.

Rewriting the model for doing business

Mulally understands that people truly want to come to work at a company they can believe in. He’s given Ford’s employees more reasons to feel good about themselves and proud of their company. He defined a straightforward mission: Build higher quality, safer, more fuel-efficient cars—that employees can rally around. “The more each of us knows what we’re really contributing to, the more motivated and excited and inspired we are,” he says.

The 6Cs and business success

Allan Mulally transformed a dying, hide-bound company into a tougher, more nimble player that embraced the world economy.

The means of achieving this transformation are also simple sounding: collaboration; communication; content; critical thinking; creative innovation; and confidence. These 6Cs may seem obvious ingredients of success, but without a business leader who practices them and facilitates and supports them in others, they are surprisingly difficult to employ. Alan Mulally is one such leader from whom others— from students to teachers to organization members and their leaders—can learn.

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Alan Mulally: The Man Who Saved Ford

Alan Mulally hands us a piece of paper with the points about leadership he wants to cover during our time together.

Chief Executive Officer, Professional Search & Interim

Alan Mulally hands us a piece of paper with the points about leadership he wants to cover during our time together. The note is handwritten and, unusual for a CEO of a Fortune 10 company, he’s drawn a heart around the words Korn Ferry on the note. A heart!

You don’t think of engineers as people who draw hearts on notes and memos, and there is nothing in his 12th-floor office at Ford’s sleek Dearborn headquarters that betrays sentimentality. Engineers are tough-minded analytical types who live their lives curled up on the left side of their brains. And while Mulally is definitely familiar with the left side — bachelor’s and master’s degrees in aeronautical and astronautical engineering from the University of Kansas and a master’s in management from M.I.T.’s Sloan School of Management — he’s also a right-brain guy, a genuine people person.

We, but not Mulally, sometimes forget that the tools of modern companies — computers, management systems, charts, tables, spreadsheets — don’t get things done; people do, which is why his people-person style works so well.

On June 30, 2014, Mulally completed his latest “big thing,” the transformation of the Ford Motor Company from a money-losing behemoth with an iconic legacy, a patchwork of competing (some would say warring) fiefdoms, and a large, diffuse set of brands, into a globally integrated, single-team company with a smaller, more profitable and focused catalog of brands, a set of highly touted processes and 19 profitable quarters in a row. Mulally masterminded this transformation during one of the grimmest periods of global economic and automobile history, in the midst of the worst and longest financial and economic crisis since the Great Depression.

Mulally, who at 68 is ginger-haired and brimming with as much energy as Saudi Arabia, Texas and North Dakota, managed the transformation by getting the best out of the people already working at Ford, not by letting them go. Weeks after he left Ford, Mulally joined the board of directors of Google Inc.

Even before Ford, Mulally’s platform was global, complex and massively capital-intensive. He spent 37 years at Boeing designing, then serving on, every one of its “bet-the-company” airliner programs. He then became lead designer, director of engineering and finally general manager for the 777 — an extremely intricate machine with 3 million parts and a global supply chain. The 777 has been the subject of documentaries, articles and business school case studies because it was the first commercial airliner to be built using computer-aided design techniques. And when he became president and chief executive officer of Boeing Commercial Airplanes, Mulally oversaw an even more difficult project — the design and development of the 787 Dreamliner, the most complex, technologically sophisticated and fuel-efficient jet airliner ever built.

And yet, Mulally draws hearts on his memos.

We met at Mulally’s office at Ford’s headquarters in Dearborn, Mich., just outside of Detroit. It was late spring as we drove through the city of 100,000, and we could not help noticing the thick, green lawns, leafy trees, and wide, uncongested streets. It was an impeccably manicured Midwestern town with a lot of charm. If Henry Ford had not located his automobile company here, it might still be prairie farmland with rows of corn and hay, and milk cows dotting the horizon. But now it is Ford country, and Ford is everywhere.

From where one of us stayed — a hotel built by Henry Ford decades ago and filled with photos from that era — you could see the company’s sprawling engineering and development center and — behind a high fence — one of its proving grounds. From where the other one of us stayed, a more modern hotel from an upscale chain, you could see the company’s headquarters and — if you looked even farther — the old River Rouge Complex. At one time, the complex had been the largest and most integrated factory in the world, with 1.5 miles of buildings. Truck- and trainloads of raw materials would enter the factory at one end, people used to say with only modest exaggeration, and shiny new Fords by the millions would come out the other end.

Mulally, whose roots are in Kansas, another earnest, corn-growing, Midwestern state, presided over the successful transformation of Ford for eight years.

Transforming a legendary company like Ford requires “vision,” Mulally told us in his intense style, sometimes touching our arms or shoulders, and always leaning in to drive home his points. But what does he mean by that well-worn word?

In another handwritten note, Mulally gave us his and William Clay “Bill” Ford’s visions for the company. The notes were surprisingly brief. Bill Ford’s vision was “Great products, strong business, better world.” Mulally’s vision was “People working together as a lean global enterprise for automotive leadership.”

But even more telling, Mulally wrote these words with precise penmanship on an old Ford advertisement titled, “Opening the Highways to All Mankind.” It ran in the Jan. 24, 1925, issue of the Saturday Evening Post , a defunct magazine from a bygone era. That message was the reason Henry Ford started the company, and by placing his and Bill Ford’s words on that sheet of paper, Mulally was demonstrating respect for the man and the sentiment that started it all. Ford was always about producing cars with value for the masses.

It also demonstrates something else. “Leadership is having a compelling vision, a comprehensive plan, relentless implementation and talented people working together,” he said. “People also want meaning. All of us want to know that we are doing great things, that we are touching a lot of people, and that what we are doing is about something bigger than ourselves. The truth is, you can only do that if you are growing, if your margins are improving, if you make products that people want and value, and you do it more efficiently with regard to time and resources than the competition,” he said. Henry Ford couldn’t have provided the average consumer with mobility, thereby changing the world, unless he made a profit. In Mulally’s view, a vision is not a hope. It is an action plan.

Fixing Ford

When Mulally entered Ford’s blue-glass headquarters building for the first time in September 2006, the company was deteriorating rapidly. It was losing money, and some investment analysts and industry pundits wondered whether the company that was the first to harness mass production would be able to remain in business. The company’s debt was “junk,” and its stock, which had been as high as $17.34 in 2004, had fallen to $8.39 when Mulally joined, before plummeting to $1.01 in 2008, as the world plunged into the financial crisis.

On the day he joined the company, the internal forecasts were bleak. “The forecast for profits for 2006, for automotive, was for a $17 billion loss,” he told us. “And at the end of the year, we achieved that loss.”

Mulally does not believe you can achieve greatness or growth simply by cutting costs and streamlining processes. True, you can’t ignore costs and processes, and they have to be tightly managed. But what you really need is to invest in the future. He did this at Boeing, and under his leadership, the commercial airplane division regained its No. 1 sales position for large airliners. Investment, by definition, takes money, which Ford didn’t have. Just as significantly, investment requires focus, especially in times of scarcity. In Mulally’s vocabulary, “focus” means “plan.”

As we sat around a small table in his office, which also had a view of the River Rouge Complex, Mulally explained that he had been methodically studying Ford well before his first day on the job. Part of this was interviewing dozens of Ford insiders, including the board. In addition, he interviewed professionals from the automobile industry, finance, business and consulting. Mulally created summaries of all these interviews and put them in a thick set of binders, which he kept in his office. He used the insights contained in these books, plus “what I learned during my nearly 40 years at Boeing,” to write Ford’s plan.

The plan was about numbers — as all business plans ultimately are — but it was even more about people — what else would you expect from a man who draws hearts? Specifically, it was about getting Ford’s employees — with their reputation for infighting and for sharp elbows — to work together constructively and to help each other. It was about changing how people at Ford interacted.

Mulally called his plan to get people to work together across the company “One Team.” He called the goal of getting people to work together across the company’s vast global ecosystem “One Ford.” Then he set a simple goal for the company. He wanted “an exciting, viable Ford delivering profitable growth for all.”

To accomplish this, he added to the plan a set of behaviors he expected employees to follow, such as “foster functional and technical excellence,” “own working together,” “role model Ford values” and so on. Though these changes would alter the company’s culture, Mulally felt they were needed to make the company profitable over the long run.

Operationally, Mulally explained in his unostentatious office, the plan wiped out Ford’s old fiefdoms and created a new, simplified leadership structure made up of the heads of the company’s profit centers — its major geographies, plus Ford Credit. The leadership structure also included heads of Ford’s 12 functional areas, some of whom, like the heads of communications and technology, had never been part of the leadership. Each of these individuals, plus Mulally, Bill Ford and Mark Fields, chief operating officer and Mulally’s successor, were at the top of Ford’s One Team. With amazing economy, Mulally was able to fit the plan, and some added details, on two sides of a single card, which was given to every employee and to everyone doing business with the company. The plan, along with its expected behaviors, might as well have been carved in stone.The plan began working almost immediately. It did so because Mulally connected it to operational targets dealing with profitable growth. Everything that contributed to, delayed, or cost the company profitable growth was measured, mapped and color-coded — green for projects going well and on plan, yellow for areas needing attention and red for the most urgent situations.

During our conversation, Mulally stopped, smiled slyly and invited us to “see where it all happens.”

Mulally, a compact former gymnast, is in excellent shape. We learned that when he raced us down the 12th-floor hallway to the elevator, and then into a large  conference room with a massive round table suitable for Arthur and his knights. There were video screens on the walls and microphones on the table. This was a room where big things happened. It was where Mulally’s weekly business plan review took place, where the managers at the top of Ford’s One Team got together to make decisions that led to Ford’s 19 consecutive quarters of profitable growth. Though it was empty, you could feel it hum.

A moment later, Mulally whisked us down the hall and into another room, this time a nondescript, barebones conference room almost directly underneath Mulally’s office. In this room, on the walls, were some 320 color-coded charts laying out goals and progress toward those milestones for each profit center and function. Above each set of charts was a photo of the leadership team member responsible for the results. “We are all sitting around the table, and the charts are all color-coded,” Mulally explained. “Can you imagine the accountability? You come to the table and you were red on the launch of something last week, and you say to the rest of the team, ‘I’m really sorry. I was really busy last week. I didn’t have time to work on that.’ The accountability and the responsibility here is to help everybody on the team turn reds into yellows and greens, and to deliver increasing earnings and increasing cash flow every year.”

There was another interesting dimension to these meetings. “We invite guests every week to sit in on the meeting in Dearborn,” Mulally said. “We introduce the guests, who sit behind the team member that invited them, and we ask them for their reflections and thoughts. The guests might be an engineer or someone from down on the factory floor. So, all this data is flowing up, but then all the results are also flowing down. It is going back and forth every week at these meetings. And at the end of the meeting, the comments you hear from the guests make your eyes water. They say, ‘My gosh, this is so big, so vast. We’re in every country. I want to contribute to the plan as soon as I get back.’ I have heard many guests say that.”

Raising money

Mullaly knew Ford needed new products to survive. Its lineup was tired, in places, and some of Ford’s product decisions had been shortsighted, in Mulally’s view. Take the Ford Taurus, a car that revolutionized the automobile design process in the late 1980s when it was developed. When the car was launched, it was to almost universal acclaim and went on to become the No. 1-selling car in the United States.

But the Taurus suffered from a lack of attention inside Ford that resulted in years of uninspired designs. Initially, the Taurus blended rounded edges with sleek styling in a package that was futuristic, aerodynamic, confident and warm. Toward the end, the Taurus resembled an oblong American football, albeit one that looked a little deflated in the middle. Sales plummeted and it became a fixture of rental fleets.

In his first week at Ford, when he was reviewing the company’s product plans, Mulally asked where the Taurus was in the lineup. He was surprised that it had been discontinued.

“Why?” he asked, dumbfounded.

“Well, we made a couple that looked like jelly beans and didn’t sell, so we stopped it,” he was told.

Mulally looked at the product team. “You guys sold nearly 7 million Taurus cars. Talk about a brand!” he said. “Why don’t you just make a new one, and get it going again? How long would it take to make a new one?” The team told him it would take four years. “How about doing it in two years? And make it the best Taurus you can. A brand like that would cost billions of dollars to create from scratch,” he told them.

From that moment forward, Mulally understood Ford’s development of new cars had to be accelerated, a capital-intensive task. In his first weeks at Ford, he understood the company would have to raise money if the automaker was to have a future. “We decided to take out a $23.6 billion home-improvement loan,” Mulally said, joking.

Given his experience at Boeing, Mulally expected that once the loan amount was determined, Ford’s finance team would be able to raise the money. “I said to the team, ‘Good luck. Let me know how it goes,’ and it got quiet. Then I said, ‘What’s wrong?’ And they said, ‘We can’t make this presentation. We can’t raise this money, because we’ve told them all this before — how Ford has a great plan.’ They said, ‘You have to do it, Alan, because you’re the only new model we have.’ So I stood up the next day and presented the plan, and 10 days later we had raised $23.6 billion, based on the strength of the plan we devised to work together.”

The decision to raise $23.6 billion before the onset of the financial crisis was prescient. With its bank account full, Ford had sufficient capital to invest, even as automobile sales collapsed around the world and the capital markets froze during the worst of the crisis and recession. Ford’s domestic rivals, G.M. and Chrysler, hadn’t raised money and were not so lucky. They were forced to go to Washington to ask the federal government for emergency loans. The government granted the request at the cost of filing for bankruptcy, forced reorganizations and the loss of each CEO’s job.

Though few industries have more entrenched rivalries than the automobile business, Mulally went to Washington to testify on behalf of bailing out his biggest competitors. He did it, he explained to us, because the death of G.M. and Chrysler would have meant the demise of the industry’s network of suppliers, which would have severely damaged Ford. The demise of these companies could have plunged the United States into depression.

When Mulally joined Ford, it had dozens of automobile brands around the world, and while not all of them were profitable, they all competed for scarce resources and management time. Buying these brands was part of a plan to create a premium group within Ford, capable of earning premium profits. Unfortunately, the costs were high and the profits never materialized. The brands — Aston Martin, Land Rover, Jaguar and Volvo, plus some other investments, such as Mazda — were an expensive drag on a company, and the decision was made to sell these assets.

Mulally did not regret selling these assets. Once more, his timing was impeccable. Ford sold Aston Martin to an investment group in 2007, and Land Rover and Jaguar to India’s Tata Motors in 2008, just before the financial debacle. The timing of Ford’s sale of Volvo to China’s Geely was not so lucky, since it didn’t happen until 2010. And, while Ford lost money on each of these deals, when measured against the cost of buying the assets in the first place, selling these companies stanched the financial bleeding and added to Ford’s cash reserves.

There was more to the decision than raising cash. “The company had to have focus,” Mulally said. “Can you imagine working on the Ford Fiesta from 8 a.m. to 8:15 a.m., then on a new Jaguar from 8:15 a.m. to 8:30 a.m.? We needed a different plan to be world-class.” Just as importantly, Mulally said, “It was a question of ‘What did Ford stand for?’ What do people think when they see Ford’s blue oval? Do they think of us as a house of brands, or do they understand that they are going to get a complete family of best-in-class vehicles that are also affordable?”

Mulally’s method

Mulally is a leader with a method that works, especially when applied to big projects, like designing and building a new generation of airliners, or transforming a great-but-teetering automaker like Ford.

Mulally’s method is straightforward. It begins with understanding the problem and how it came about, then determining what to do about it. Next, leaders have to “pull everybody together around a compelling vision, a comprehensive strategy and a plan aimed at achieving your goals,” he said. “We developed a plan to go forward, after selecting the entire team of the leaders worldwide and also the leaders with skills needed going across the world,” he said. Once you have the people and the plan, you have to stick with both.

“After a couple of years at Ford, journalists would come in here and ask, ‘Does Alan have a new card with a new plan on it?’ My answer was always ‘No.’ Stick with what works.”

Many companies less successful than Ford, and many executives less successful than Mulally, have written bold, comprehensive plans. But what they lack is a leader who cares as deeply about people as Mulally does. What they don’t have is a leader who draws hearts on his memos and notes.

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Untitled Leader

Driving Transformation: The Leadership Legacy of Alan Mulally

Unveiling the Inspiring Leadership Journey of Alan Mulally

In the annals of leadership history, there are few individuals whose impact reverberates as strongly as that of Alan Mulally. With a career spanning over four decades, Mulally’s leadership prowess and transformative approach have left an indelible mark on the corporate world. From his remarkable tenure as the CEO of Ford Motor Company to his earlier achievements at Boeing, Mulally’s leadership journey is replete with valuable lessons and inspiring stories that continue to resonate with leaders across industries.

At the helm of Ford, Mulally orchestrated one of the most remarkable turnarounds in automotive history. When he assumed the role of CEO in 2006, the iconic American automaker was on the verge of collapse. Crippled by financial turmoil, market share decline, and internal strife, Ford faced a seemingly insurmountable challenge. Yet, under Mulally’s guidance, the company not only weathered the storm but emerged stronger than ever, reclaiming its position as a global industry leader.

Mulally’s leadership style is often described as visionary, and rightly so. He possessed a unique ability to envision the future of his organization and inspire others to share that vision. At Ford, Mulally charted a new course, placing emphasis on collaboration, transparency, and a shared sense of purpose. Breaking down silos and fostering a culture of open communication, he united the company’s disparate divisions into a cohesive force, collectively working towards a common goal: reviving the once-mighty Ford brand.

One of the key lessons from Mulally’s leadership journey lies in his adeptness at leading through crisis. In 2008, the global financial crisis hit the automotive industry hard, with many companies succumbing to the pressures of the economic downturn. Ford, under Mulally’s astute leadership, was able to navigate these treacherous waters with resilience and determination. Making tough decisions, such as mortgaging company assets to secure much-needed capital, Mulally steered Ford away from the brink of bankruptcy and towards a path of sustainable recovery.

Central to Mulally’s approach was his unwavering belief in the power of teams. He understood that high-performing teams were the engine driving organizational success. By fostering a culture of trust, encouraging collaboration, and nurturing talent, Mulally built a cohesive team at Ford that thrived on shared accountability and mutual support. His “One Ford” philosophy brought together employees from different functions and geographies, aligning them towards a unified purpose and enabling the company to achieve remarkable results.

Effective communication and transparency were pillars of Mulally’s leadership philosophy. He instituted a revolutionary practice at Ford called the “Business Plan Review” meetings. These weekly gatherings, attended by senior executives from all divisions, created a platform for open dialogue, data-driven decision-making, and collective problem-solving. Mulally’s commitment to transparency and his exceptional communication skills fostered an environment where issues were addressed promptly, challenges were met head-on, and progress was celebrated collectively.

Beyond his strategic acumen and business acuity, Mulally’s leadership was also characterized by his humility and emotional intelligence. He recognized the importance of connecting with people on a deeper level, listening attentively, and leading with empathy. By creating an environment where individuals felt valued and heard, Mulally engendered trust, loyalty, and dedication among his employees. This human-centric approach not only fostered a sense of belonging but also inspired a culture of innovation and creativity.

Mulally’s legacy extends far beyond his tenure at Ford. His impact on the automotive industry, the broader business community, and leadership development is undeniable. His relentless pursuit of innovation, his ability to manage change effectively, and his unwavering commitment to excellence have set a benchmark for leaders worldwide.

In this article, we embark on a journey to explore the leadership lessons and stories of Alan Mulally. Through a series of captivating anecdotes and in-depth analysis, we uncover the secrets behind his extraordinary success and distill them into valuable insights for today’s leaders. From visionary leadership and crisis management to team-building, communication, and emotional intelligence, we delve into the key aspects of Mulally’s leadership approach that propelled him to greatness.

Join us as we unravel the remarkable leadership journey of Alan Mulally, a trailblazer whose enduring influence continues to shape the landscape of leadership and inspire generations to come.

The Visionary Leader

Overview of mulally’s visionary leadership style.

Alan Mulally’s leadership style was characterized by a rare blend of foresight, strategic thinking, and a relentless commitment to innovation. He possessed the uncanny ability to envision the future of his organization, anticipate industry trends, and make bold decisions that would position his company at the forefront of the automotive landscape.

Mulally recognized that in order to transform Ford and revive its fortunes, he needed to foster a culture of collaboration and transparency. He understood that a shared vision was essential for driving organizational alignment and unlocking the collective potential of the company. By articulating a clear and compelling vision for Ford’s future, Mulally instilled a sense of purpose and direction that resonated with employees at all levels.

Story 1: How Mulally transformed Ford’s culture by fostering collaboration and transparency

One of the defining moments in Mulally’s leadership journey at Ford was his early recognition of the need to dismantle the silos that had long plagued the company. When Mulally joined Ford, there was a pervasive culture of division and internal competition, hindering effective communication and collaboration. Mulally understood that this fragmented approach was detrimental to the organization’s success.

To break down these barriers, Mulally introduced a series of initiatives aimed at fostering collaboration and transparency. He instituted regular meetings where senior executives from different divisions came together to openly discuss challenges, share information, and collectively address issues. These sessions, known as the “Business Plan Review” meetings, became a hallmark of Mulally’s leadership approach and served as a catalyst for cultural transformation within Ford.

During these meetings, Mulally encouraged open and honest dialogue, emphasizing the importance of data-driven decision-making. He created an environment where leaders felt safe to voice concerns, propose ideas, and challenge the status quo. Through this transparent and collaborative approach, Mulally was able to leverage the collective wisdom and expertise of his team, making informed decisions that propelled Ford towards its goals.

Key lessons: Creating a compelling vision and driving organizational alignment

Mulally’s visionary leadership provides several crucial lessons for today’s leaders:

Develop a compelling vision: A strong and compelling vision serves as a guiding light for the organization. Leaders must articulate a clear, inspiring, and future-oriented vision that resonates with employees and motivates them to strive for greatness.

Foster collaboration and transparency: Break down silos and foster a culture of collaboration and transparency. Encourage open dialogue, establish platforms for information-sharing, and create an environment where diverse perspectives are valued and heard.

Drive organizational alignment: Align the entire organization around the shared vision, goals, and values. Ensure that everyone understands and embraces the strategic direction, creating a sense of purpose and unity that propels the organization forward.

Embrace data-driven decision-making: Cultivate a culture of informed decision-making based on data and facts. Encourage leaders to analyze information, consider different viewpoints, and make decisions that are grounded in evidence.

By embracing these lessons, leaders can inspire their teams, drive organizational alignment, and position their companies for long-term success in an ever-evolving business landscape.

In the next section, we will delve into how Alan Mulally’s leadership skills were put to the ultimate test during a time of crisis and how he led Ford through the global financial downturn with resilience and strategic acumen.

Leading through Crisis

Mulally’s approach to navigating difficult times.

One of the true tests of leadership is how effectively leaders navigate through crises. Alan Mulally’s tenure at Ford coincided with one of the most challenging periods in the history of the automotive industry—the global financial crisis of 2008. As the crisis unfolded, Mulally faced immense pressure to steer Ford through the storm and ensure its survival.

Story 2: How Mulally steered Ford through the global financial crisis

When the financial crisis hit, the automotive industry was severely impacted, with many companies facing bankruptcy and collapse. Ford was no exception, grappling with declining sales, mounting debt, and a shrinking market share. Mulally recognized the gravity of the situation and understood that immediate action was required to safeguard the future of the company.

Mulally embarked on a series of bold and decisive measures to address the crisis head-on. He implemented a comprehensive restructuring plan that involved streamlining operations, reducing costs, and focusing on core strengths. This involved divesting non-essential brands, closing factories, and renegotiating labor contracts. Mulally also made the difficult decision to mortgage Ford’s assets, securing vital funding that allowed the company to weather the storm.

During this turbulent period, Mulally’s leadership was characterized by unwavering resolve, transparent communication, and a commitment to preserving jobs. He engaged with employees at all levels, providing regular updates on the state of the company and the progress of the turnaround efforts. This open and honest communication fostered a sense of trust and confidence among employees, who rallied behind Mulally’s leadership and remained committed to the company’s success.

Through Mulally’s strategic acumen, relentless focus, and ability to make tough decisions, Ford emerged from the crisis stronger and more resilient. While other automakers faltered or succumbed to bankruptcy, Ford not only survived but also avoided taking a government bailout—a testament to Mulally’s leadership and his unwavering commitment to the company’s long-term success.

Key lessons: Maintaining resilience, making tough decisions, and inspiring confidence during challenging times

Mulally’s leadership during the global financial crisis provides several valuable lessons for leaders facing adversity:

Maintain resilience: In times of crisis, leaders must display resilience and tenacity. They must remain focused on the bigger picture, maintain a positive outlook, and inspire confidence in their teams. By demonstrating resilience, leaders can help their organizations navigate through uncertainty and emerge stronger on the other side.

Make tough decisions: Crises often require leaders to make difficult and unpopular decisions. Effective leaders must have the courage to make tough calls, even when faced with resistance or criticism. They must prioritize the long-term survival and success of the organization over short-term comfort or popularity.

Communicate transparently: Open and honest communication is crucial during times of crisis. Leaders should keep their teams informed about the challenges, the progress being made, and the actions being taken. Transparent communication builds trust, fosters engagement, and helps align employees around a shared purpose.

Inspire confidence: Leaders must inspire confidence in their teams and stakeholders, even in the face of adversity. By demonstrating a strong belief in the organization’s capabilities, communicating a clear vision for the future, and leading by example, leaders can instill a sense of hope, resilience, and determination.

By embracing these lessons, leaders can effectively navigate through crises, guide their organizations towards recovery, and position them for long-term success.

In the next section, we will explore how Alan Mulally’s emphasis on building high-performing teams played a pivotal role in Ford’s transformation and how leaders can foster a collaborative and inclusive team culture.

Building High-Performing Teams

Mulally’s emphasis on teamwork and creating a culture of trust.

Alan Mulally recognized the crucial role that teams play in driving organizational success. He understood that high-performing teams are the foundation upon which innovation, collaboration, and sustainable growth are built. With this understanding, Mulally placed a strong emphasis on fostering a culture of trust, teamwork, and shared accountability throughout the organization.

Mulally believed that building trust was essential for creating a cohesive and productive team environment. He actively worked to break down the barriers that hindered collaboration and encouraged open communication among team members. By fostering a sense of trust, Mulally created an environment where individuals felt safe to share their ideas, challenge the status quo, and take calculated risks, all in service of driving Ford’s success.

Story 3: The “One Ford” approach and its impact on team collaboration

A defining aspect of Mulally’s leadership journey at Ford was his introduction of the “One Ford” approach. The “One Ford” philosophy aimed to unite the various divisions and regions of the company under a common vision, strategy, and set of values. This approach broke down the silos that had long hindered effective collaboration, allowing teams to work together seamlessly towards shared goals.

Through the “One Ford” approach, Mulally fostered a culture of collaboration and inclusivity. He encouraged cross-functional teams to collaborate and share best practices, leveraging the diverse expertise within the organization. Mulally believed that by bringing together individuals from different backgrounds and functions, Ford could tap into a wider range of perspectives and ideas, leading to innovative solutions and improved decision-making.

This emphasis on collaboration and teamwork extended beyond internal teams. Mulally also fostered stronger relationships with suppliers, recognizing their importance in Ford’s success. By creating an atmosphere of trust and collaboration with suppliers, Mulally forged mutually beneficial partnerships that enhanced Ford’s supply chain efficiency and overall competitiveness.

Key lessons: Fostering collaboration, promoting diversity, and nurturing talent

Mulally’s focus on building high-performing teams offers valuable lessons for leaders seeking to create a collaborative and inclusive team culture:

Foster collaboration: Encourage collaboration and break down silos by creating opportunities for teams to work together, share information, and learn from one another. Create a sense of collective ownership and responsibility towards shared goals.

Promote diversity and inclusion: Embrace diversity in all its forms, including diversity of perspectives, backgrounds, and experiences. Recognize the value of diverse teams in generating innovative ideas and driving better decision-making.

Nurture talent: Invest in developing and empowering individuals within the organization. Provide opportunities for growth, learning, and skill-building. Foster a culture that recognizes and rewards high performance, while also encouraging continuous development and improvement.

Build trust: Cultivate an environment of trust and psychological safety, where team members feel comfortable expressing their opinions, taking risks, and challenging the status quo. Establish open channels of communication and lead by example in building trust within the team.

By embracing these lessons, leaders can create a collaborative and inclusive team culture that drives innovation, enhances productivity, and fosters a sense of collective purpose and achievement.

In the next section, we will explore how effective communication and transparency were integral to Alan Mulally’s leadership approach and how leaders can enhance their communication skills to drive organizational success.

Communication and Transparency

Mulally’s exceptional communication skills and focus on transparency.

Effective communication and transparency were integral components of Alan Mulally’s leadership approach. Mulally recognized that clear and open communication was essential for building trust, aligning teams, and driving organizational success. He prioritized transparency throughout the organization, creating an environment where information flowed freely, and decisions were made based on facts and data.

Mulally believed that leaders should be exceptional communicators, capable of conveying complex ideas in a simple and relatable manner. He had a natural ability to distill information and present it in a way that resonated with diverse audiences. Whether it was addressing employees, engaging with stakeholders, or communicating with the media, Mulally’s communication style was characterized by clarity, authenticity, and a genuine connection with his audience.

Story 4: The famous “Business Plan Review” meetings and their impact on organizational transparency

One of the most notable examples of Mulally’s commitment to transparency was the implementation of the “Business Plan Review” meetings at Ford. These weekly meetings brought together senior executives from all divisions and regions to discuss the progress, challenges, and opportunities facing the company. During these meetings, Mulally encouraged open dialogue, data-driven discussions, and full transparency.

The “Business Plan Review” meetings became a platform for leaders to share updates on their respective areas of responsibility, raise concerns, and propose solutions. This transparent exchange of information allowed for cross-functional collaboration, collective problem-solving, and a shared understanding of the company’s overall performance. It created an environment where leaders felt empowered to speak up, take ownership, and contribute to the collective success of Ford.

Mulally’s commitment to transparency extended beyond the executive suite. He regularly communicated with employees at all levels, providing updates on the company’s performance, progress towards goals, and challenges that lay ahead. By keeping employees informed and engaged, Mulally fostered a sense of ownership and unity, instilling confidence in the organization’s direction and goals.

Key lessons: Effective communication, active listening, and the power of transparency

Mulally’s approach to communication and transparency offers several valuable lessons for leaders:

Communicate with clarity and authenticity: Leaders should strive to communicate complex ideas in a clear and relatable manner. Be authentic, genuine, and approachable in your communication style to foster trust and connection with your audience.

Practice active listening: Effective communication is a two-way street. Actively listen to your team members, stakeholders, and customers. Create opportunities for feedback and dialogue, valuing diverse perspectives and demonstrating that you value their input.

Embrace transparency: Establish a culture of transparency by sharing information openly and promoting accountability. Transparent communication builds trust, fosters collaboration, and ensures that decisions are made based on accurate information.

Leverage technology for communication: Explore innovative communication tools and technologies that facilitate efficient and transparent communication across the organization. Embrace digital platforms, collaboration tools, and social media to foster engagement and connect with diverse audiences.

By adopting these lessons, leaders can enhance their communication skills, create a culture of transparency, and build strong relationships with their teams and stakeholders.

In the next section, we will explore the profound impact of Mulally’s humility and emotional intelligence on his leadership style and how leaders can cultivate these qualities to drive success.

Humility and Emotional Intelligence

Mulally’s humility and empathetic leadership style.

Alan Mulally’s leadership was marked by his humility and empathetic approach. Despite his remarkable accomplishments and industry stature, Mulally remained humble, approachable, and genuinely interested in the perspectives and well-being of others. He understood that leadership is not about wielding power or seeking personal recognition, but about serving others and creating an environment where individuals can thrive.

Mulally’s humility was evident in his willingness to listen and learn from others. He recognized that he didn’t have all the answers and actively sought input from his team members, valuing their expertise and insights. This humble mindset not only fostered collaboration and innovation but also empowered his team members, instilling a sense of ownership and pride in their contributions.

Story 5: How Mulally leveraged emotional intelligence to build trust and rapport with employees

An example of Mulally’s exceptional emotional intelligence was his approach to building trust and rapport with employees. He recognized the importance of connecting with individuals on a deeper level, understanding their needs, and appreciating their contributions. Mulally took the time to engage with employees, listen to their concerns, and celebrate their achievements.

Mulally’s empathetic leadership was particularly evident during challenging times. He acknowledged the personal and emotional toll that the global financial crisis had on Ford’s employees. Through his compassionate approach, he provided support, reassurance, and a sense of belonging, ensuring that employees felt valued and understood.

Furthermore, Mulally’s emotional intelligence enabled him to address conflicts and challenges with empathy and tact. He understood that leadership involved managing relationships and emotions effectively. By empathetically navigating difficult conversations, he fostered a culture of respect, open dialogue, and constructive problem-solving.

Key lessons: Cultivating humility, developing emotional intelligence, and leading with empathy

Mulally’s leadership journey offers valuable lessons for leaders seeking to cultivate humility, emotional intelligence, and empathy:

Cultivate humility: Stay grounded, remain open to learning, and recognize the strengths and contributions of others. Embrace a humble mindset that values collaboration and empowers others to excel.

Develop emotional intelligence: Enhance your self-awareness, empathy, and emotional regulation. Understand your own emotions and those of others, allowing you to connect on a deeper level and respond effectively to the needs of your team.

Lead with empathy: Seek to understand the experiences, perspectives, and emotions of your team members. Demonstrate empathy by actively listening, showing support, and creating an inclusive environment where everyone feels valued.

Build trust through authenticity: Foster a culture of trust by being authentic, transparent, and genuine in your interactions. Demonstrate consistency between your words and actions, honoring commitments, and valuing the trust placed in you as a leader.

By embracing these lessons, leaders can create an environment of trust, collaboration, and respect. Cultivating humility, emotional intelligence, and empathy not only enhances leadership effectiveness but also fosters a positive and inclusive organizational culture.

In the next section, we will explore Mulally’s role as a champion of innovation and change management, and how leaders can drive innovation and manage change effectively within their organizations.

Innovation and Change Management

Mulally’s role in fostering innovation and managing change.

Alan Mulally’s leadership journey is synonymous with driving innovation and successfully managing change within organizations. He understood that in order to remain competitive in a rapidly evolving world, companies must embrace innovation, adapt to change, and continuously push the boundaries of what is possible.

Mulally fostered a culture of innovation at Ford by encouraging creativity, curiosity, and a willingness to take calculated risks. He believed that innovation should be embedded in the DNA of the organization and embraced by every employee. By providing resources, support, and recognition for innovative ideas, Mulally cultivated an environment where experimentation and out-of-the-box thinking were valued.

Story 6: Mulally’s transformation of Ford’s product lineup and introduction of the Ford Mustang

A notable example of Mulally’s commitment to innovation was his transformation of Ford’s product lineup. Under his leadership, Ford introduced a series of groundbreaking vehicles that captured the imagination of consumers and reinvigorated the brand. One of the most iconic vehicles during this time was the relaunch of the Ford Mustang.

Mulally recognized the enduring appeal of the Mustang and the emotional connection it held for Ford enthusiasts. With his unwavering belief in the power of iconic brands, Mulally prioritized the redesign and reintroduction of the Mustang, capturing the essence of its heritage while infusing it with modern technology and design. The successful relaunch of the Mustang not only revitalized the brand but also showcased Ford’s commitment to innovation and its ability to connect with customers on an emotional level.

Key lessons: Embracing innovation, managing change effectively, and staying ahead of the curve

Mulally’s leadership journey offers valuable insights into driving innovation and managing change:

Embrace innovation as a core value: Foster a culture that values innovation, creativity, and a willingness to challenge the status quo. Encourage employees at all levels to contribute their ideas and empower them to experiment and take calculated risks.

Nurture a learning mindset: Encourage continuous learning and growth within the organization. Create opportunities for skill development, provide access to resources and training, and foster a culture that embraces curiosity and embraces new ideas.

Manage change proactively: Anticipate and embrace change rather than react to it. Develop a proactive approach to change management, ensuring that the organization is agile and adaptable to evolving market dynamics.

Stay ahead of the curve: Foster a culture of forward thinking, monitoring industry trends, and anticipating customer needs. Encourage a mindset of continuous improvement and innovation to stay ahead of competitors and drive sustainable growth.

By embracing these lessons, leaders can create an environment that fosters innovation, effectively manages change, and positions their organizations as industry leaders.

In the next section, we will explore the lasting legacy of Mulally’s leadership and the continued success of Ford, underscoring the importance of leaving a lasting impact and inspiring future leaders.

Legacy and Impact

Mulally’s lasting impact on ford and the industry.

Alan Mulally’s leadership legacy at Ford is both profound and enduring. Under his guidance, Ford experienced a remarkable transformation, overcoming significant challenges and emerging as a stronger, more innovative, and globally competitive company. Mulally’s impact extended far beyond the boundaries of Ford, influencing the broader automotive industry and setting new standards for leadership excellence.

One of Mulally’s most significant achievements was his restoration of Ford’s financial health. Through his strategic decisions, cost-cutting measures, and disciplined approach, Mulally steered Ford away from the brink of bankruptcy and positioned it on a path of sustainable growth. The financial turnaround of Ford served as a beacon of hope for the industry, demonstrating that even in the face of adversity, with visionary leadership and a commitment to change, remarkable transformations are possible.

Mulally’s emphasis on collaboration, transparency, and a shared vision laid the foundation for a cultural shift within Ford. The “One Ford” approach, which he championed, brought together diverse teams, fostering collaboration, innovation, and a sense of unity across the organization. This cultural transformation continues to shape Ford’s success, as it remains committed to its core values and a unified purpose.

Beyond his impact on Ford, Mulally’s leadership approach influenced the broader business community. His emphasis on transparency, effective communication, and building high-performing teams has become a model for organizations worldwide. Mulally’s success serves as a testament to the power of visionary leadership, strategic decision-making, and fostering a culture of trust and collaboration.

Story 7: The legacy of Mulally’s leadership and the continued success of Ford

Mulally’s leadership legacy at Ford is evident in the continued success of the company long after his tenure as CEO. The foundations he laid, the cultural shifts he instilled, and the strategic decisions he made continue to shape Ford’s trajectory. The company has maintained its commitment to innovation, introducing groundbreaking electric and autonomous vehicles, and aligning itself with the future of mobility.

Furthermore, Mulally’s influence on the industry is reflected in the recognition and accolades he has received. He is widely regarded as one of the most influential leaders in the automotive sector, with his leadership style and success serving as a source of inspiration for current and aspiring leaders across industries.

Key lessons: Leaving a lasting legacy, inspiring future leaders, and driving sustainable growth

Alan Mulally’s leadership journey imparts several key lessons for leaders seeking to leave a lasting legacy and drive sustainable growth:

Foster a purpose-driven culture: Instill a sense of purpose and a shared vision within the organization. Align employees around a common goal and core values that guide decision-making, drive innovation, and inspire collective action.

Develop leaders for the future: Invest in developing the next generation of leaders. Nurture talent, provide opportunities for growth and development, and cultivate a culture of continuous learning that prepares leaders to navigate challenges and drive success in a rapidly changing world.

Embrace innovation and change: Create an environment that encourages innovation, embraces change, and stays ahead of industry trends. Foster a culture that values creativity, curiosity, and adaptability, positioning the organization for sustained success.

Inspire others through authentic leadership: Lead with humility, empathy, and authenticity. Build trust, communicate with clarity, and create an inclusive environment where individuals feel valued and empowered to contribute their best.

By embracing these lessons, leaders can leave a lasting impact on their organizations, inspire future leaders, and drive sustainable growth well beyond their tenure.

Alan Mulally’s leadership journey is a testament to the transformative power of visionary leadership, collaboration, transparency, and the relentless pursuit of excellence. His remarkable achievements at Ford and his lasting impact on the industry serve as a source of inspiration for leaders across the globe. By studying and applying the leadership lessons and stories of Alan Mulally, leaders can navigate challenges, foster innovation, build high-performing teams, and leave a lasting legacy of success in their own organizations.

Embracing the Mulally Model: Inspiring Leadership for a Thriving Future

In the realm of leadership, the journey of Alan Mulally stands as a shining example of transformative leadership , resilience, and the power of visionary thinking. His remarkable achievements at Ford Motor Company, coupled with his enduring impact on the industry, make him an icon of leadership excellence. Through the exploration of Mulally’s leadership lessons and stories, leaders can glean invaluable insights to navigate today’s complex and rapidly changing business landscape.

Mulally’s leadership journey showcased the importance of creating a compelling vision and driving organizational alignment. By fostering collaboration, transparency, and a shared sense of purpose, he united teams and propelled them towards a common goal. Leaders can follow in Mulally’s footsteps by crafting and effectively communicating a compelling vision, fostering a culture of collaboration, and aligning their teams towards shared objectives.

Mulally’s ability to lead through crisis was remarkable. During the global financial crisis, his resilience, decisiveness, and transparent communication guided Ford through turbulent times. Leaders can learn from Mulally’s approach by embracing resilience, making tough decisions, and communicating openly and honestly during challenging periods. By doing so, they can instill confidence, inspire loyalty, and drive their organizations towards successful outcomes.

The emphasis Mulally placed on building high-performing teams is another crucial lesson for leaders. By fostering collaboration, promoting diversity, and nurturing talent, leaders can create an environment where teams thrive, innovation flourishes, and organizational success becomes achievable. Mulally’s “One Ford” philosophy serves as a reminder of the power of breaking down silos and harnessing the collective intelligence of diverse teams.

Mulally’s leadership journey also highlighted the significance of effective communication and transparency. By adopting Mulally’s communication practices, such as active listening, transparent sharing of information, and creating platforms for open dialogue, leaders can foster trust, enhance collaboration, and drive organizational success.

Furthermore, Mulally’s humility and emotional intelligence set him apart as a compassionate and empathetic leader. By cultivating humility, developing emotional intelligence, and leading with empathy, leaders can create a supportive and inclusive environment where individuals feel valued, heard, and motivated to contribute their best.

Mulally’s commitment to innovation and change management serves as a powerful reminder of the importance of embracing innovation, managing change proactively, and staying ahead of the curve. Leaders who foster a culture of innovation, nurture a learning mindset, and manage change effectively can drive their organizations towards continuous growth and success.

Ultimately, Alan Mulally’s leadership journey leaves a lasting legacy. His impact on Ford, the industry, and the leadership landscape as a whole is profound. Leaders can draw inspiration from Mulally’s achievements and apply the lessons learned to their own leadership practices, striving to leave a lasting impact, inspire future leaders, and drive sustainable growth.

As we reflect on the remarkable leadership lessons and stories of Alan Mulally, let us be inspired by his visionary thinking, his resilience in the face of adversity, and his unwavering commitment to collaboration, transparency, and innovation. By embracing these lessons and applying them to our own leadership journeys, we can shape a future of success, inspire greatness in others, and continue to push the boundaries of what is possible in the world of leadership.

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Want to save your company? Follow Ford’s two-step blueprint

“Bill,” you’re saying, “that sounds dry as dust. I rather read the classifieds.”

Knock yourself out, but I’m telling you, this ain’t your average business book. First of all, the 2012 Wall Street Journal best-seller reads more like a thriller. Author Bryce Hoffman knows how to tell a great story.

Second of all, it’s nothing short of a blueprint for how to run a business.

A flight engineer by trade, Mulally saved Boeing from collapse in the wake of the Sept. 11, 2001 terrorist attacks. Ford hired him as CEO in 2006 and asked him to do what many thought was impossible — fix a toxic corporate culture and turn an iconic but damaged American business into an automotive juggernaut, and do all of that in the midst of the worst recession our country had seen in 70 years.

Mulally did all of that and more. In the process, he became one of the greatest CEOs corporate America has ever seen. It wasn’t easy — in fact, given Ford’s stale culture, multinational presence, and complex labor and supplier networks, no corporate turnaround has been more complex.

But according to Hoffman, Mulally’s blueprint can be boiled down to two simple steps:

• A non-negotiable weekly meeting pulse with a laser focus on the company’s data.
• A one-team emphasis on working together.

The centerpiece of that blueprint was what Mulally called a “business plan review,” or BPR, a weekly meeting held on the same day, at the same time, in the same place, with mandatory attendance by all of Ford’s senior executives. The focus of those meetings were the numbers. Any issues behind the numbers were taken up in separate problem-solving meetings called “special attention reviews,” or SARs.

In other words: Review the numbers, smoke out the issues, solve the problems. That was Step 1.

Step 2 was to improve the health of the Ford team.

This was no easy task. Before Mulally arrived, Ford’s culture could be summed up in four words: “Every man for himself.” But Mulally insisted on open, honest assessments. Under his watch, no one would ever get in trouble for reporting bad news. Bad news was viewed simply as an opportunity to solve problems. Once Ford’s executives realized they wouldn’t be punished for reporting bad numbers, they started reporting them everywhere. That gave them plenty of problems to solve — and plenty of room to improve. And improve they did.

“Mulally and his team pulled off one of the great­est comebacks in business history,” Hoffman wrote. “As the rest of Detroit collapsed, Ford went from the brink of bankruptcy to being the most profitable automaker in the world.”

So what does that mean for us?

As Hoffman writes, it means that “Mulally’s serial success also proves that his unique approach to management — the weekly meetings, devotion to data, and emphasis on working together — is portable. … He is more certain than ever that the Mulally method is as applicable to small non-profits as it is to major multinational corporations.”

The folks at EOS Worldwide could have told you that years ago.

A weekly meeting pulse, a laser focus on data, and a commitment to building a cohesive, functional, healthy team are at the center of the EOS model . It’s an operating system for how to get more out of your business. Alan Mulally knew it, Ford knew it, and the folks at EOS want the rest of the world to know it, too.

If you want to take your business to the next level, you need a vision that’s shared by everyone in your organization, you need the discipline and accountability to execute on that vision, and you need a healthy, cohesive team working with you to realize that dream.

There are lots of complexities and moving parts involved in making those things happen, but the blueprint is really that simple.

How strong is your business? 
Use the free EOS Organizational Checkup  to gauge the strength of your business … and to find out whether you’re ready to take your business to the next level.

Take the Organizational Checkup here .

The Notion of the Business Plan Review

By marshall goldsmith.

As you create your earned life, you will look at the lessons you’ve learned, the insights you’ve had, and the teaching that has had an impact on you. I have had a series of profound insights over the years, which I have used to formulate new ways of coaching. These are the concepts of 

• the referent group
• the notion of feedforward
• stakeholder-centered coaching
• the business plan review (BPR)
• the “what’s next” weekend
• daily questions
• building a coaches community (called 100 coaches)

Here, I’d like to explore the notion of the Business Plan Review (BPR) . 

I adopted this from the way that former Ford CEO Alan Mulally structured weekly meetings. 

Alan explained this brilliant leadership concept to me when we started working together, but I wasn’t paying full attention at the time. I thought it was a rigid schematic for running a meeting—fixed time and day, mandatory attendance, five minutes to report progress, traffic light colors (red, yellow, green) to grade status updates, no judgment, no cynicism, and other rules—the kind of structure that would fascinate a superior engineer like Alan. 

He took the concept with him to Ford and made it the managerial centerpiece of his transformation of the failing automaker. 

On closer inspection, I saw that the BPR wasn’t cold and bloodlessly technocratic. On the contrary, it was grounded in a piercing understanding of people, as if Alan had internalized Drucker’s ideas about the “customer” and employed the weekly BPR to treat his executive team not as his direct reports, but rather as stakeholders in one another’s success, with each executive representing additional groups of stakeholders (customers, suppliers, members of the community, etc.). 

Not everyone appreciated it — but the beauty of this was that they self-identified and, in a way, knew that they weren’t cut out for the jobs they were holding. 

The BPR made everyone accountable to both themselves and the group. This met their dual need for internal validation and belonging to something greater than themselves. 

With the BPR, Alan the engineer had built an impregnable fortress that was adaptable to any enterprise and goal. 

I adapted it and used it as part of a plan I would come up with that I could  apply to helping successful people achieve positive lasting change in their behavior. 

• Determination
• Revitalized
• Spearheaded
• What Got You Here Wont Get You There
• Communication
• Self-motivated
• The Earned Life
• Transformed

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My mission is simple. I want to help successful people achieve positive, lasting change and behavior; for themselves, their people, and their teams. I want to help you make your life a little better. With four decades of experience helping top CEOs and executives overcome limiting beliefs and behaviors to achieve greater success, I don’t do this for fame and accolades. I do this because I love helping people!

As an executive educator and coach, I help people understand how our beliefs and the environments we operate in can trigger negative behaviors. Through simple and practical advice, I help people achieve and sustain positive behavioral change.

Leading Transformation: An Interview with Alan Mulally

A lot of people talk about transformation, but few understand what it looks like and what it takes to be successful more than Alan Mulally, former CEO at Boeing and Ford Motor Company.

To be successful at transformation, you need a great business leader. A leader like Alan Mulally. A former CEO at Boeing and the Ford Motor Company, Mulally has succeeded everywhere he has worked. In 2014, Fortune Magazine ranked him number three on their list of the year’s greatest leaders. From 2010 to 2014, Barron’s included him in their list of the world’s best CEOs. Nearly 10 years after first crossing paths with Mulally, I reconnected with him recently at the Art of Leadership (AOL) conference in Toronto where I had a chance to interview him following his keynote address.  While working for LHH in Detroit, I met with Alan a few times during the economic crisis and turmoil in the automotive industry in the late 2000s. It was there that I saw firsthand the impact a great leader can have in a time of great uncertainty. Years later, his message hasn’t changed very much: keep it simple, be authentic, stick fiercely to your beliefs and employ zero tolerance in the face of dissent. “If you’re going to build a world-class performing organization,” Mulally said at the Art of Leadership conference, “you have to be what you really believe.” Mulally’s beliefs and leadership style were forged over years of careful guidance by his family as he grew up in Lawrence, Kansas, particularly his mother who exposed him to a nearly endless stream of philosophical life lessons that he still draws upon today. Those lessons taught him the importance of lifelong improvement, collaboration and respect for others. His mother’s guidance also drove him to explore his entrepreneurial side early in life. Alan delivered newspapers door-to-door, started a lawn mowing business and worked at the local grocery store. “I figured out that…if I focused on the customer and exceeded their expectations, they’d go berserk. They’d give me tips. It all fit together. I was serving, I was adding value and people really appreciated it.” Those core values, combined with his keen intellect, helped Mulally guide Ford and Boeing through the most turbulent periods in their corporate histories. Following September 11, orders for airplanes dropped precipitously. Under Alan’s leadership, Boeing’s balance sheets were back in good shape by 2006. Based largely on that performance, Ford Motor Company Chairman Bill Ford called on him that same year to help him lead the struggling automaker. I vividly remember when Alan first arrived in Detroit. Ford had lost more than a quarter of its North American market share and was on the verge of reporting a $12.7-billion loss. Everyone from the news media to industry analysts questioned the decision to give an “outsider” the top job at one of Detroit’s Big Three. At the Art of Leadership conference, Alan described his first news conference at the Ford world headquarters in Dearborn, Michigan. A local reporter asked him how he could be successful when he really didn’t understand cars. He told the reporter that automobiles are complex with 10,000 individual parts; however, he adroitly noted that airplanes have four million parts, “and it has to stay up in the air.” His critics were quieted. Mulally acted immediately to turn the company around. He sold off Ford’s luxury brands, such as Land Rover, Aston Martin, Volvo and Jaguar. He then turned his attention to renegotiating burdensome union contracts to bring labor costs down. But his boldest moves were yet to come. Facing a cash crunch, Mulally borrowed more than $23 billion to restructure the company and get it back on a growth track. Many considered his strategy risky, but when capital markets dried up two years later following the global mortgage crisis, his decision seemed prescient and saved Ford from having to seek a government bailout. Internally, Mulally faced huge challenges trying to break down Ford’s renowned silo mentality. To remedy this situation, he implemented the “One Ford” plan. A key part of the plan was his mandatory Business Plan Reviews (BPRs). Every Thursday morning, leaders met for two hours to openly review key metrics. The executives were encouraged to work closely together to drive innovation, speak truth and find solutions. Mulally’s One Ford plan and the BPRs are now credited with helping the company find its way forward. Not surprisingly, Mulally’s vision was challenged by some of the longer-serving executives on his leadership team. His solution was to implement twice-yearly performance reviews that measured both technical performance and “working together” skills. Mulally said when he took over at Ford, he found a culture that tolerated bad behavior as long as the technical skills were strong. Once he was in charge, Mulally made it clear that was no longer going to be acceptable. “I said, ‘we have two performance periods and if they don’t make progress … then they’re making the decision to leave.’ And you’d be surprised at how quickly people … move into the light. The ones that don’t [make progress], you still love ‘em, but they’re still making the decision to move on.” During my time in Detroit with LHH, I sat on a board that was chaired by Bill Ford. At one of our meetings, he famously said he believed it was important to “always put people before profitability.” I asked Alan about reconciling this statement in the face of ubiquitous corporate downsizings. His answer was frank: PGA, which translates into Profitable Growth for All.  Certainly, more companies need to consider PGA as they move forward. Today, the average tenure of a company on the S&P 500 is 33 years. This number will drop to 12 years in less than a decade. Sustained PGA is clearly critical to corporate performance over the long term. Given his history of success, it’s not surprising that Alan’s is one of the first names to surface whenever a company gets into trouble. He was recently touted as a possible savior for Tesla, the luxury electric car maker that was plunged into uncertainty because of the erratic behavior of its founder and CEO, Elon Musk. Mulally quickly dispelled the rumor, choosing instead to continue his work as a travelling emissary for accountable leadership.   Mulally’s message was clear to the audience attending the AOL conference, just as it had been to me years earlier when we first met. “People want meaning. They want to be associated with a compelling vision. They want to be associated with something that is really important … it’s incumbent on us to provide that opportunity.”

The Lean Post / Articles / People-First Leadership: A Conversation Between Jim Morgan and Alan Mulally

Product & Process Development

People-First Leadership: A Conversation Between Jim Morgan and Alan Mulally

By Lean Leaper

September 1, 2021

Leading through challenging times means enhancing your work process and always looking to improve people's lives. Putting people first is just one of the many topics of this conversation between Ford Motor Company CEO Alan Mulally and LEI Senior Advisor Jim Morgan.

Download a copy of the podcast transcript

This transcript recounts a wide-ranging discussion in which LEI Senior Advisor Jim Morgan and former Ford Motor Company CEO Alan Mulally reminisce about the leadership philosophy and management strategy that led to what some have dubbed  “the biggest turnaround in business history.”  Throughout the conversation, Mulally provides valuable insight for current leaders like you who are trying to navigate today’s disruptive and turbulent environment — so much so that those who have both  listened to the recording  and read the transcript say you will risk missing a lot by just listening. 

Be among the first to get the latest insights from LEI’s Lean Product and Process Development (LPPD) thought leaders and practitioners. This article was delivered to subscribers of The Design Brief , LEI’s newsletter devoted to improving organizations’ innovation capability.  Subscribe now .

Photo credits : Jim Morgan (left) and Alan Mulally (right). Alan photo courtesy of Ford Motor Company

Jim Morgan:  Good morning, Alan, and welcome to the podcast. It’s truly an honor to have you join us today.

Alan Mulally:  Well, it’s good to see you again, Jim. Glad to be with you.

Morgan:  Great. So, let’s get right to it. Your management system, in my view, was absolutely crucial to Ford’s turnaround, and a great deal has already been written about your weekly BPR (Business Process Reviews). But it’s my view that your working-together management system is much more than just a weekly meeting. So, I wonder if you can talk about the essential elements of a good management system and why it matters to a successful company.

Mulally:  I’d be glad to, Jim. If it would work for you, let me back up a little bit and share with the audience how I ended up developing this fundamental management system that you are describing.

As you know, I had the fortune to work at Boeing for 37 years before I joined Ford, and I had the honor to serve on the design team of every Boeing airplane — so the 707, 727, 737, 747, 757, 767 — and I was the chief engineer for the 777 airplane. Then as the CEO of Boeing, I helped launch the 787. So, if you look at all the flying in the world today, nearly 70% is on Boeing airplanes.

You know, the commercial airplanes were really the first internet because we actually got people together around the world, and we could find out we had more in common than we were different.

Commercial airplanes are really sophisticated, as we all know, and complicated because of the safety requirements. An average commercial airplane has four million parts, and you think about the quality, fuel efficiency , safety, reliability, and maintainability to be able to carry 300 passengers halfway around the world. So, on all of these programs, we actually make a commitment five years in advance to deliver all the performance on schedule. So, it’s an invention with four million parts, and we have nearly 600,000 to 700,000 talented people working on the airplane to create this invention and deliver it on schedule.

So, some principles and practices I have learned over the years are the essential part of the management system, and a few of them are — it’s all about people. That’s where the “people first” comes from. Everybody needs to be included — all the consumers, the traveling public, our employees, the suppliers, the financiers, the regulatory agencies — and it’s so important to come together around a compelling vision for the product, the strategy for achieving it. And then, of course, the relentless implementation plan, which, as you mentioned, is the business plan review meeting every week.

On top of that, clear performance goals are really important, facts and data. We care, of course, what everybody thinks, but we want to know what the data is that everybody’s looking at because we’re inventing this great product.

Also, the behaviors. So, there’s the process part, then there’s the behavior part, where everybody knows the plan, they know the status, they know the areas that need special attention, and we actually color-code the charts so that we can easily see what’s on plan — an issue we might have, we have to work around, and also maybe an issue that we don’t have a plan for. Attitude is really important. Propose a plan, be positive, find a way, respect each other, listen to each other, and trust this process of working together.

The last one is really: have fun and enjoy the journey and each other. There’s just nothing more fun than creating value for the people of our world with these great airplanes. The corollary to that is: never joke at anybody else’s expense because it’s never funny. The reason that’s so important is that if people think they’re going to be a victim or made fun of, they’re not going to be forthcoming on what the real status is because they don’t want to be a victim. So, it’s a lot of fun doing it, and just know: no humor at anybody else’s expense.

When you look at that as a management system, it’s really the culture. It’s this process of working together, the business plan review, the special attention meetings, and the leadership team, where everybody’s included, is the second piece. The behaviors, expected behaviors, is the third piece, the creating-value roadmap and the BPR, where every week with the entire team, we’re going through every element of the plan.

And, of course, the importance of the leader and the leadership team. You add those five or six pieces together, and that, inherently, then creates the culture that we used at Boeing – and then, of course, the culture that we implemented at Ford when I joined you guys at Ford.

Morgan:  And it was incredibly powerful. What about for a leader that is just trying to establish a management system. Where do you suggest they get started?

Mulally:  Well, I think that the most important thing is to, again, think of it as a process, the meetings that you have with the team and the organization because that’s how you get the work done. So, being really intentional about the business plan review each week, a two-hour meeting, everybody’s there. Then, the areas that need special attention, schedule maybe four of those a month; then one on strategy, one on product, and one on process improvement, another on people. So, anything that needs special attention, you have built-in in your management system, time to address that with the team. Then just start doing it. And it’ll be amazing because you end up pulling together as a team and building a cohesive leadership team that is creating clarity – that’s over-communicating clarity, reinforcing clarity, and moving forward, implementing your strategy to implement the vision that you’d laid out for your business.

How to Change a Leader’s Behavior

Morgan:  Perfect. When you have to influence or change a leader’s behavior, what’s the best way to go about that?

Mulally:  Well, what I found is that we’re all human beings, and we really do want to contribute, and we want to make a difference, so the most important thing as a leader is to pull everybody together around the vision for the business or the product, pull everybody together around the strategy for achieving it, not only the technical strategy but the partnership strategy and the expected behavior strategy. Then, make that really clear, really intentional, then just start operating with this process and these behaviors. And any time you see a behavior that’s not consistent with what you’ve agreed to on working together — like the respect each other and help each other — stop the meeting or talk to the person in private. Show them what you’ve agreed to, and then share with them that the expectation is that we are going to operate this way.

I’ve always said to them also, as you know Jim, that if you don’t want to do this, if you don’t want to follow the process or the expected behaviors, it’s okay. And they’d go, “Oh, you mean I get an exception?” I said, “Well, no, not really. It means that you’re deciding to move on because anybody that doesn’t operate this way is poison in an organization, as we all know.” And you think about the performance reviews we do with all of our employees and ourselves. And you think about on one axis will be your technical contribution and the other axis will be your working-together skills. Sometimes, they’ll be somebody that’s way down the working-together skills, but they’re way high on their technical contribution.

So, they’d always say to me, “What do we do about that?” And I’d say, “Why is somebody like that?” And they’d say, “Well, we’ve been working on their working-together skills for a lot of years, but they just don’t want to commit to that.” So, I said, “Well, let’s go over the behaviors and make it clear to them, so they’re not going to be surprised. Give them two performance periods, and if they choose not to move up and to the right with the working-together in addition to their technical skills, then they’re choosing to move on, and we’ll help them move on. We still love them. Remember, it’s people first is the first principle, but they’re going to be happier, the team’s going to be happier, and I’m going to be happier, and it’s okay. We wish you the very best.”

It’s amazing to me, Jim, that 80-plus percent of the time when you’re clear about the process, and you’re clear about the behaviors from a product point-of-view or a business point-of-view, that 80-plus percent of the time people will move very positively to a working-together contributor.

Morgan:  That’s great. I remember: participation is not optional, right?

Mulally:  Exactly, exactly.

The Urgency of Understanding the Competitive Situation

Morgan:  Exactly. So, in the book  American Icon , there’s a quote that’s attributed to you that I think is great, and it’s something like, “the problems at Ford were not as bad as I thought, they were much, much worse.” What did you mean by that? What were some of the more daunting problems that you encountered when you arrived at Ford?

Mulally:  Wow, well, I really got off to a good start understanding Ford because when Bill Ford called me, and Bill Ford’s a great leader and he wanted help. He was the chairman, the CEO, and the president at the time. And they were going through a lot of changes with the competition, with the quality of the products increasing around the world, with the globalization of the products, and the competitiveness.

One of the things he shared with me was that Ford had become a house of brands. They had purchased Aston Martin, Jaguar, Land Rover, Volvo, Mazda, and they really had lost the brand essence of what Ford was about, which was still 70% of the business.

Also, they’d become very regionalized. Henry Ford set Ford up that way so that he could provide not only great cars and trucks in every country around the world but also provide great jobs and careers and contribute to the economy. But, of course, with the union agreements we had, we couldn’t match our production to the real demand. We had become a fast follower, as we had a lot of overcapacities, become a fast follower from a technology point of view, where we were the leader. So, you add all that together, and we’re losing money on every brand and every vehicle. And Jim, as you well remember, because I was fortunate enough to meet you right when I arrived, and the first forecast that we all saw when we got it out in the open, our profits for the entire year, this is in August, was a $17 billion loss.

That was the forecast, and four months later, we achieved it. So, this was not a forecast-accuracy issue; this is: we needed to really deal with the reality of where we were, not the way we wish it could be or wanted to be or hoped it could be. But we need to pull together on our reality of where are we going take our company. What are we going to do about our product line to serve our customers and then develop that strategy and that relentless implementation plan with the BPR? And that’s exactly what we did together. And even though the situation got much worse because of the financial crisis in the United States, during the worst of times, we borrowed $23.5 billion to finance the plan to restructure the business.

Then also, simultaneously, to invest in all the new products that people really wanted value and match our production to the real demand. Then, work together as one Ford, one team worldwide using all of our resources to not only save Ford but create an exciting, profitably growing Ford based on the best cars and trucks in the world.

Morgan:  When you were first studying the situation at Ford in the early days, did you ever feel like, “What have I gotten myself into?”

Mulally:  Well, of course, when we announced that I was leaving Boeing, and here I am the CEO of Boeing, and one more airplane I want to help redesign, a replacement for the 737, and I announced that we were going to Ford, I got a lot of calls about, “What are you doing? Don’t you understand that manufacturers are in trouble? They can’t compete with the best in the world.” So, at the end of the day, the reason I decided to join you and Ford, Jim, was, I really felt like I was being asked to serve a second American and global icon. You look at Ford, and you look at Boeing, and you look at the products and services that they make; it’s the reason we’re free as a country. It’s a manufacturing base, innovation base of the United States, and it’s going to continue to be fundamental to economic development and our environmental sustainability and our energy independence, and safety.

So, I thought about that, but I also had my working-together principles and practices. And I knew that if we pulled everybody together that we were not only going to be able to save Ford but create a sustainable, viable way of going forward, which is what we did together. And, did we have fun or what, Jim?

Morgan:  It was an incredible experience. It absolutely was. We did.

How to Align Siloed Functions

You mentioned one of the challenges at Ford was that it was highly regionalized. I would add to that that it was also highly siloed in terms of functions. That’s a challenge that a lot of senior business leaders have today. Can you talk a little bit about how you went about reaching out and communicating with and aligning a company that was, I don’t know, almost 300,000 people?

What advice would you have for a leader that has that kind of challenge right now?

Mulally:  Oh, you bet. Well, on the multinationals, or even if you’re not a multinational, but if you have a number of product lines or business areas around the world, I’ve always used a simple matrix organization. If you think of it, the vertical on the organization would be the customer-facing, they could be the product line, like in Boeing’s case, each of the airplane programs, but it’s the P&L responsibility. In Ford’s case, we used those regions, like North America, South America, Europe, and Asia-Pacific. Each of those is a Profit & Loss organization, so there are many assistant CEOs that lead them.

Then horizontally going across will be all of the functions that make it all happen, like engineering, manufacturing, procurement, finance, communications. Then just write a big “working-together” across that matrix organization. So, you have one Ford now, so one plan, one [set of] performance measures, one vision, one strategy, and everybody. Remember we made our cards up —

Morgan:  I do.

Mulally:  … that had “One Ford” on it and had the plan on one side, and it had the behaviors on the other?

And then start the business plan review every week and have all those P&L leaders there — at every meeting, you have the functional leaders. Then, all of a sudden, all the silos collapse because now everybody … You think about it when you’re sitting in the meeting, the business plan review.

Remember, and you were there with me many, many times: I would start with a summary, go through the vision, strategy, and plan, what the status is, and then each P&L leader would go through their view of the world, for their business all around the world, each of the product leaders — including you leading product development — would go across all the products across the world. Within two hours, we all — all of us — knew everything about the business — the strategy, the product, the process, and the people — and they’re all color-coded. Now, everybody can feel no stress, no anxiety because we know what the issues are, green, yellow, and red, and we’re committed to helping each other turn the reds to yellows to greens.

Remember we could hardly miss a BPR, Jim, because — I think I missed like maybe 10 in my 45 years of doing this because you can call in from anywhere, and it’s so exciting to see the reds turn to yellow to green but also see a new red because it was a gem. Because now you knew what the issue was, so now you could work on turning it to yellow and green.

Morgan:  I remember the first time you said that, that the red is a gem. It took me a while to figure out what exactly that meant, but, yeah, it was great. One of the things that reminds me of is the incredible degree of transparency that we were. You were able to achieve in the business plan review, but that didn’t happen automatically. Can you talk a little bit about how you encouraged people to be transparent and share the real information?

How to Encourage Transparency and Information Sharing

Mulally:  Well, that’s a really important question. That was a real turning point, as you remember, when we first started because the Ford leadership team had never had everybody on the team, the P&L leaders around the world, and the functional leaders. They didn’t know each other; they had different business plans. The philosophy at Ford, of course, was like most companies still, is you only brought an issue to your supervisor or your manager when you had a solution. So, from a Deming point-of-view, you’re managing a secret. You don’t know what’s going on, so you’re just meddling.

So, the important thing was to make a breakthrough in that culture, where not only was it okay to show a red, but it was expected because that was the only way we were going to be able to deal with your reality and help each other.

I remember when we started, the BPR was going pretty well, and we were building a very cohesive leadership, and the only problem was that all 300 charts that we all used were all green.

So, I remember stopping the meeting a couple of times, and I said, “You guys, you know now we’re going to lose $17 billion. Is there anything in your area that’s not going well? Just maybe one or two little things?”

Of course, the eye contact goes down to the floor because people couldn’t imagine actually sharing the real situation without personally ruining their career. Finally, Mark Fields, who was leading North America at the time, and Canada, had a problem with a lift actuator issue on a new edge launch in Oakville, Canada. So, he told his team the day before the business plan review, “I think this is one of those red things Alan’s talking about with stock production, which is the right thing to do. We have 10,000 vehicles sitting out on that tundra.”

I remember one of his vice presidents said, “Well, good luck, Mark. It was nice to know you. We’ll go ahead and color that red for you.” So, we get in the meeting the next day, we’re going through all the green charts — green, green, green — and then up comes this red chart on the launch of the Edge. Mark mentions that they got this issue and everybody — I mean, the air is just dissipating from the room to see what I’m going do and what’s going to happen to Mark. So, I started to clap, and everybody in the room thought, well, the two doors behind the Thunderbird room there are going to open up, two, large men are going come in, they’re going to extract Mark from the meeting, and it’s all over: We’ll get back to the way we used to run the place.

Of course, I asked the leaders if they had any thoughts right away to help Mark. Derek Cusack, your leader at the time, said, “Well, I’ve seen that issue on such and such. I’ll get you the technical data right away.” Bennie Fowler, who’s leading quality, had another positive comment. Then remember Joe Hendricks, who’s leading manufacturing worldwide, he said, “Well, you know, we’re going to figure this out. I’ll get the manufacturing engineers identified. Then when we get the solution and switch out the parts, we’ll get going again. So, I’ll get them identified and get them up to Oakville.”

That interchange took like eight or nine seconds. Then we went on in all the rest of the green charts. Next week, only Mark’s chart was red again. Of course, they were still surprised that he was still there. So, the next week it was yellow, and we had a solution. And the next week or so, it turned green, and all the vehicles started flowing around the world. You remember that following week, Jim, the entire 300 charts looked like a rainbow.

Morgan:  Yes!

Mulally:  There were a lot of greens, but there were a lot of yellows and a lot of reds because there’s always a lot of good things going on in every company or every program. But what everyone knew now, they were going to trust the process. We knew that no matter what happened, we were going to be able to deal with reality and help each other turn the reds to yellows to green, and that was the culture change.

That was a moment that I knew, and they knew that no matter what came at us — whether it was tsunamis in Asia-Pacific, whether it was a financial crisis, whether it was ever-improving competition — that we were going to work together to design and produce and support the best products and services. And we were going to create a viable business.

The Practice of People First

Morgan:  It was definitely a big change in the organization, that’s for sure. One of the other things that I think was a huge change was your people-first approach to leadership. While a lot of companies say similar things, I know I could really feel the difference at Ford, and so could a lot of other people. Can you talk a little bit about what people-first means to you?

Mulally:  Oh, absolutely. People-first means love them up — absolutely love up all the participants, meaning that it’s appreciating that they are part of a bigger vision to create something very special, to create value for people. In our case, we dedicated our life to safe and efficient transportation and a strategy for achieving it and then a working-together process to achieve it. So, we want everybody’s hearts and minds, not only their technical capability. They are part of the team. They are human beings. They deserve to be appreciated, to be loved, to know what the plan is, and to know what the status is — because then they’re going to be able to do their best work and then feel that satisfaction of meaningful accomplishment.

So, at the most fundamental level [people first] is appreciate every participant — and be really clear about the process we’re going to use and the behaviors, which allow them to be the very best of themselves, also. But what it really means is to include everybody, appreciate everybody, recognize everybody, thank them every day, help them make sure they have the tools and resources.

But the best thing is that they know everything about the plan, they know everything about what the status is, and they know the areas that need special attention. That’s the most respectful thing you could ever do with all the participants, to love them up.

Morgan:  Yeah, I agree. Where does that spirit, that type of leadership, come from for you, Alan, and why do you think it’s so important?

Mulally:  Well, I grew up with pretty modest means, but I was really loved by my mom and dad.

They had great expectations for me making a significant improvement to the world. Every day my mom and dad would say things like, “Well, remember honey, what the purpose of life is, is to love and be loved.” And I’d say, “I understand.” “But in that order, honey.” “Okay, got it.” The next day it would be, “Alan, you know, to serve is to really live.” “Thank you, Mom.” The next day it would be, “It’s nice to be important, honey, but it’s more important to be nice.” “Thanks, Mom.” The next day it’d be, “By working together with talented people, you can make a significant difference to a lot of people in our world.”

Then another one, Jim, that they would say is, “Now, who you are, honey, who you really are, not just your competence but who you are as your character, who you are is going to have a very significant influence on your leadership contribution going forward.” So, with that and also not having any resources, I started out with my product development and my business-plan development with my  TV Guide  route, my paper route, my lawn mowing business, the bagger and the checker at Dillon’s grocery store, the night manager, farmhand, a rancher, construction. Every job that I had was my love made visible.

The smiles that I got from all my customers and my clients just reinforced those fundamental principles that it’s all about working together. I remember one time, Jim, that in my lawn mowing business — my dad had taken me to a Royals baseball game in Kansas City, and you know how they cut the field back and forth?

Morgan:  Mm-hmm (affirmative).

Mulally:  It’s just so beautiful. So, I had a client that had a very large yard, so I thought, “Gosh, this is great. This is going to be an innovation of a lifetime,” and so I cut his yard that way. So, I got a call from him, and he said, “Alan, I really like your innovation and your focus on me and surprising or delighting me, but I just don’t want my yard to look like a baseball diamond.” So, I actually redid the yard, Jim, and he actually gave me a bigger tip because of my innovation to exceed his expectations.

So, my entire life and then growing up at Boeing on the airplane programs and then going to Ford, it was all about that vision of serving and everybody pulling together and everybody feeling that respect and appreciation. So, that’s where it always came from. I always felt like my biggest contribution was to hold myself and the team responsible and accountable for following the process and following the expected behaviors.

The Keys to a Successful Transformation

Morgan:  That’s awesome. Those are great stories, thank you. Moving beyond your grass-cutting and paper route, you’ve also led two hugely successful transformations of global, iconic companies, Boeing and Ford Motor Company. What do you think are the keys to a successful transformation, and what’s the primary role of the CEO in turning those companies around?

Mulally:  Well, the most important thing in any transformation is starting with the fact that you’re dealing with reality. I mean, what is the reality, not what we wish it could be or hope for. And in Boeing’s case, after the 9/11 terrorist attacks, or after the rise of Airbus as a major competitor, where are we really? In Ford’s case, we were losing $17 billion, and our products weren’t the best in the world anymore. And make it okay to deal with that reality. And then, really come together about where you want to take the company. That’s the vision, and that’s the strategy, and that’s the plan.

Then the most important thing for the CEO is to hold themselves and the team accountable for dealing with that reality, for coming together around the vision and strategy and plan. Then every week, relentlessly implementing that strategy and plan in a positive, can-do, find-a-way attitude.

Morgan:  That’s great. Sort of building on this idea of effective CEOs, you mentioned earlier that you had the opportunity to lead in development, including leading the total development of the Triple 7. How did that prepare you for your CEO role?

Mulally:  Well, it’s amazing because, as you know, those principles and practices in the management system, as I’ve shared with everybody, that’s really what I know. I learned that from an early age, as you asked about, but all the way through all the airplane programs. So, when I was asked to be the CEO of Boeing Commercial Airplanes, I just implemented the very same working- together management system, including the process and the behaviors. Because managing a business has all the same characteristics as managing a program: we need to make products and services that people want and value and improve our quality and our productivity every year. If we do that, we’ll be able to profitably grow.

So, it was absolutely the foundation of just moving from program management and creating these products to managing a business to have it profitably grow. And the only way you can profitably grow, which is great, is to make products and services that people want and they value, they’ll actually pay you for it, and improve your quality and productivity every year. So, at the most fundamental level, Jim, it’s just a design job, right, just like designing an airplane or a car. So, include everybody on the revenue side and include everybody on the productivity side.

The neat thing is, if you’re profitably growing, then it’s much easier to work the quality and the productivity because, now, people don’t have to worry about being laid off because you’re growing. So now, their hearts and minds can be absolutely focused on not only the products but also on your quality and productivity.

Morgan:  I also recall that, when you came to Ford, you looked at the extended enterprise — you talked to dealerships, you talked to suppliers. You really worked at including everybody. Can you talk a little bit about that experience?

Why Including Every Part of the Value Chain is Vital

Mulally:  One of the most important principles of working together that we’ve used is, everyone is included. I remember that when I first got there. I’ll just use one example, the same way with the suppliers and the same way with the dealers. I was invited — they were going to have all 4,000 dealers, all the store owners for Ford from across the United States, at a meeting, and we had it at Ford Field, where the Lions football team plays, and they invited me to come to address them. And I said, “Well, I just got here. What would you like me to tell them?” And he said, “Well, they know we’re in trouble, so why don’t you just tell them why you came. Why would you come to Ford?”

So, they kept asking me, “Well, what would you like us to put on the teleprompter so that you can read it to them?” And I said, “Well, I don’t really do teleprompters.” So, I walked out, and the other speakers ahead of me were talking on the teleprompter, and all the teleprompters around Ford Field went black. I walked out, and I introduced myself, and I just talked to them. I told them why I came. I told them what I thought we needed to do to simplify Ford, to focus on Ford, the brand.

Mulally:  I’d like to have a complete family of vehicles: small, medium, and large cars, utilities, and trucks; right-size our production to the real demand; take out a small home-improvement loan to finance the restructuring and the development of new products; and work together as one team. And the most important thing was going to be you, the dealers, because no one in Detroit sells any cars or trucks, and you have the best relationships with your customers and your clients. So, we’re going to work really closely with you and make sure you have the best cars and trucks in the world, and you’re going to take the lead, like you do, to manage the relationship and sell and support the vehicles.

So, I was trying to figure out how to get their attention, so I asked all the Ford employees that were there to stand up, and they were all in the front row, Jim, because they wanted to see who I was also. So, I said, “Oh dear, what am I going to do now?” So, I said to them, “Okay, I’d like all the Ford employees to turn around and face all of the 4,000 dealers at Ford Field. So, they turned around, clink, clink, clink, clink, clink, turned, and they’re looking out at the dealers, and I said, “Now, I want you to tell the dealers that you love them.” And they all looked down at their shoes, and they said, “We love you.”

I said, “Well, why don’t you look at them, and then let’s try it again.” So, they raised their faces up, and they said, “We love you.” And, of course, their relationship was horrible because we were making not the price they needed, and it was almost like they were estranged. So, I said, “Okay, one more time. Let’s say it like you mean it, and it’ll be a self-fulfilling prophecy.” And, so, they smiled, and they said, “We love you.” Well, that was the first time, and then all the dealers started clapping, all 4,000, because they were worried their businesses were at risk and all but their family was going to be gone. Now, they knew that it was going to be about people working together, and they had a really important role.

Man, as you know, Jim, did they come through. They helped with making sure we had the right products. They are probably the best distribution network in the world to support our customers, by not only selling the vehicles to them but also supporting the vehicles in service.

The Influence of Lean Thinking and Practice

Morgan:  That’s a great story, and they are so important to the success of Ford. Some of the people listening might not realize this, but you have a long history as a student of lean. Can you talk a little bit about that and how that is influenced your leadership style?

Mulally:  Oh, absolutely. It’s kind of where we first met, but we didn’t know each other. So, gee, ever since I joined Boeing, Boeing has always been in continuous improvement . It was Bill Boeing’s vision just like it was Henry Ford’s vision. We were always benchmarking ourselves against the best in the world and, with the rise of Toyota, we were fascinated by the Toyota Production System . And of course, you and the Lean Enterprise Institute captured that

in  The Machine that Changed the World . I mean, a phenomenal, phenomenal piece of research and work. That resonated with me; I still have my copy all marked up.

We would take all of our leadership to Japan, and Toyota was very respectful of Boeing and, of course, when I was at Ford, they are really respectful of Ford because Mr. Toyoda actually went to see Henry Ford originally, and Henry Ford shared with him the Ford Production System, which is where Toyota started. So, then they grew their kaizen process and continuous improvement, they took that to a whole, another level to be the best production system in the world.

And you captured it, we captured it, and we kept improving. That’s how Boeing ended up taking on Airbus and all the governments of Europe to create an aerospace company that could compete with Boeing. We became, again, the number one aerospace company in the world. So, I have, like you, continuous improvement, focus on the customer, including everybody, everything coming from the gemba , so you actually know what’s going on. Everybody’s participating. I think that’s been a major contributor to Boeing’s success and to Ford’s success.

How to Learn How to be an Effective Leader

Morgan:  Did you have leaders that you admired as you grew up at Boeing or leaders who mentored you along the way?

Mulally:  I’ve had so many, Jim. Everybody that I’ve worked with, just the way that I approach everything, is about lifelong learning and continuous improvement. I’ve learned from every person I’ve worked with, worked for, and people that have worked for me. All of the people I’ve worked with I have learned from. As a matter of fact, some of the leaders that maybe didn’t operate as much the way we’re talking about here with inclusion and respect, I learned a lot from too about how I didn’t want to operate and why I didn’t think that was effective.

Just our relationship: remember when we met, and I was fascinated by all the variability that we had in the Ford vehicles. And we knew we were never going to be able to deliver the products that people want and value with ever-improving quality and productivity with all this variation. I remember inviting you over, and you came with all the drawings for all of the hoods on all the vehicles, and we laid them all out on the table. It was one of the highlights of my early introduction to Ford to get a chance to meet you, learn about what the product was. And right there, we made a decision together that we were going to have as a main portion of our plan, a fundamental part of the plan, would be to eliminate all the variation that people didn’t have value for so we could really focus on world-class, on what the customers really, really wanted.

Morgan:  Yeah, I don’t know if I shared this with you, but when I first received your invitation, I actually thought it might be a colleague playing a practical joke to see if I would wander over to the CEO’s office. I had my assistant call over and make sure it was legit. And that kind of demonstrates how different your style was from previous CEOs.

The auto industry is going through an incredibly difficult and rapidly changing time, and new technologies are popping up all over the place. Auto startups seem to be on every corner. What advice do you have for the people who are trying to lead their companies through these very challenging times?

Leadership Through Challenging Times

Mulally:  The technology, the globalization, the mass-movement from the rural areas into the cities, all of these things are leading to a tremendous, what you consider to be disruptions but also tremendous opportunities to further serve the greater good. My advice is to continue to use that business plan review and that creating-value roadmap process where, in the business plan review, every leader goes through what’s happening, from their point of view, in the world: demographics, technology, globalization, suppliers, competitors.

So, every week, we’re going through all of the things that are changing, then checking our plan to see where we might need or want to capitalize on those changes from a strategy point-of-view and then continue to build that into the business plan review. So, for example, the things that are going on with the power trains now, with electric vehicles, with natural gas, the power trains, with hydrogen, with autonomous vehicles, with transportation as a service, these things are just nothing but great opportunities to figure out … We’re always going to have cars and trucks, but they’re going to be part of a bigger transportation system because, with the cities getting bigger, this is going to be a quality-of-life issue and a quality-of-life opportunity: rapid transit, mass transit.

So, by constantly looking at all of these things and then incorporating them into your business plan — but with a product plan — then not only are you going to be able to continue to profitably grow and serve. But also, it’s going to allow everybody to focus on continuous improvement and the greater good worldwide.

So, just build it into the process, keep enhancing the culture to deal with it, make it a positive thing, so people aren’t scared about the change, and embrace it for the greater good.

I’m very excited about the potential that we have to really improve people’s lives, especially from a safety point-of-view and transportation-as-a-service, to be able to move around in these ever-increasingly large cities.

Morgan:  I agree, and I think the BPR you set up is the center of rapid-learning loops. Each week you learn more and can help manage through this environment, so I think the BPR is central in that.

Mulally:  You bet.

Fast-Forward to the Future

Morgan:  Last question. Today, you’re still busy. I know you are on the boards at Google and the Mayo Clinic. What kinds of things are getting you excited these days? What kind of challenges are you dealing with?

Mulally: Well, I’m also on the board of Carbon3D, Jim, which is the first 3D technology that actually creates the product in 3D as opposed to layers on additive manufacturing. This is our dream. I’ll just stop there. This was our dream when we created the Triple seven digitally. Where all four million parts we wanted to capture digitally, now the data can be saved on servers around the world. Then, when you needed a part, you just pull it down and make the part in 3D. The simplification of all of the logistics and the warehouses and being able to do it in a timely manner, was our dream. Now we can do that by creating the products with oxygen and light at Carbon3D.

So, that’s been really, really, really fun to support. Of course, as you mentioned, Google will continue to change the world because they’re fundamental vision is to organize the world’s information and make it available to all of us. You think of what that’s done for all of our lives, plus businesses — one of them being the Mayo Clinic. The Mayo Clinic is the finest institution for serious and complex healthcare, and it’s being digitized. And all that information is being made available so that we can learn from it and continually improve our healthcare.

So, all of them kind of fit together because it’s all about technology — about digitization and miniaturization of sensor-set. And it’s all about improving people’s lives, whether it’s transportation or manufacturing. As you know, people want to know how I could help them with working together and their management systems, so I’ve enjoyed that too, and I’m also really enjoying Nicki, my wife of 49 years, and our five kids.

I guess you could say I have a portfolio of things, and I get a chance to keep working with you, and I’m looking right here at our latest creation together,  Designing the Future , by Mr. Morgan and Mr. Liker — that was really fun to support you with that too.

Yeah, thank you so much for that. You added so much to that book. It’s got your fingerprints all over it, and thanks so much for joining me today. It was great talking to you again.

Mulally:  Well, Jim, I just, one more time, you were one of the first people that I met when I joined Ford.

You were well along on continuous improvement and lean and lifelong learning. You had a critical job in the design and manufacturing of the Ford cars and trucks, and you trusted me, and you embraced me. And I’ll always treasure our working together, starting with your leadership and your partnership and your friendship. I wish you the very best in your continuing contribution to design and manufacturing and quality and productivity. So, thank you very much.

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Alan Mulally’s Working Principles

by Mark Kenny | May 18, 2020 | Tips | 0 comments

Alan Mulally – the former CEO of Boeing and Ford, known for turning both of those companies around – followed a formula for getting any  team to work together and be successful.  I heard him speak about it at the Emerge Stronger virtual conference last week.  I captured his one slide for you (yes one slide – see above), and pulled out three practical applications:

One, everyone knows the plan for the team (or company) to succeed – everyone .  There is absolutely no confusion by anyone on your team or anywhere in your organization.  Everyone knows what must be done.  Even the part-time receptionist.  It means one page or one card that contains the plan (not three pages, not twelve pages, not forty-seven pages).  One, short, easy to understand page.  Alan used to carry it around with him on a little card and showed it to everyone.  It means communicating the plan over and over and over and over and over and over and over and over and over again.  Communicating the plan never stops.  Everyone knows.

Two, how people treat each other is crystal clear with zero tolerance .  We treat each other with love, respect, listening, helping, appreciation.  This means a list of specific behaviors that everyone knows and that you review at the start of EVERY meeting.  Alan had these listed on the opposite side of the same card (see above) and reviewed them in leadership meetings with dozens of executives when they were losing $17 billion a quarter.  Don’t tell me you don’t have time to do the same.

Three, you have a clear process and trust the process .  Alan created business process reviews where every objective was color coded green/yellow/red.  Everyone rated their own objective / initiative and shared the status once a week.  More importantly, it was an environment of sharing where people were open about issues.  No hidden issues.  No secrets.  And people have a spirit of helping each other solve problems.  This means that you as the leader must create an environment where people can be vulnerable, open with issues, and rewarded for sharing.  You must do this.  Otherwise you are managing a secret.

Too simple?  Well, it wasn’t for a Fortune 5 company… 😉

Now go build a #strongteam!

by Mark Kenny

Mark is a keynote speaker and author who works with leaders who want to eliminate territorial thinking, create strategic alignment, and build a stronger leadership team.

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Strategic Discipline Blog

Cadence of accountability – how alan mulally rid ford of poor performers.

Posted by Douglas A Wick on Mon, Feb 18, 2019

Do you feel your organization puts up with mediocre performance?

American Icon: Alan Mulally and the Fight to Save Ford Motor Company by Bryce G. Hoffman shares insights on how to encourage, inspire, and make your team accountable. Mulally turned Ford Motor Company around using BPR’s (business plan review) and SAR’s (special attention review).

BPR’s and SAR’s are principles, resources, and tools we share with our Scale Up customers.

BPR’s are Scale Up’s Meeting Rhythms. They establish a Cadence of Accountability .

Lack of Leadership & Accountability at Ford

When Alan Mulally met with Bill Ford to consider becoming CEO of Ford Motor Company there were a lot of concerns.

“The operating people are on quicksand,” Ford told Mulally. “I need help.” Mulally realized Ford’s problems were serious.

“This is going to be a culture shock,” Ford cautioned.

The Board’s Expectations

Bill Ford wanted to make sure Ford’s Board of Directors agreed with the decision to hire Mulally. Two board members, Hockaday and Thornton, met Mulally for lunch. They quickly went from skeptics to salesman.

They had one concern.

“Alan, if the board offers you this job and you take it, you need to understand that there are no sacred cows,” Hockaday told Mulally. “Any friends of Bill that are in the wrong positions or you conclude are not the right guys, you can get rid of them—and Bill will confirm that.”

Mulally shook his head. “That’s not an issue, because I’m not going to have to get rid of many people,”

Mulally’s response was worrisome to Hockaday and Thornton. They believed the time had come for bloodletting at the top of the house in Dearborn.

The weakness of Ford’s bench prompted them to look outside the company for a CEO in the first place.

“How do you come to that conclusion?” Hockaday asked. Mulally responded by outlining his system of weekly meetings for them, just as he had for Ford. He told them this approach enforced extreme accountability on a weekly basis. It left no hiding place for those not committed to executing their part of the business plan.

“It’s likely that a lot of people at Ford aren’t used to that, and they will self-select out,” Mulally said. “I won’t have to do it.”

Learn more about Mulally and one challenge he faced in this 2 minute video:

Ford Motors Meeting Week

Mullaly’s first week was “meeting week” at Ford Motor Company.  Each month Ford’s senior executives sat through one agonizing caucus after another, each devoted to a different issue or facet of the company’s operations. There were meetings to discuss Ford’s finances, meetings to discuss sales, meetings to discuss new products.

Since Ford’s executives seemed to like meetings so much, Mulally asked his secretary to schedule one more. When he had them all together, Mulally started laying down his law.

“There are too many meetings,” he told them. “When do you have time to think about the customer?”

Nobody answered.

From now on, Mulally continued, there would be only one corporate-level meeting—his “ business plan review ,” or BPR. It would be held every week on the same day, at the same time, in the same place. Attendance would be mandatory for all senior executives.

“The data sets you free,” he said with a smile.

“We are the decision makers,” Mulally said. “We need to make decisions and not pass the buck.”

Ford executive unwilling, or unable to perform did self-select themselves out.  The result, Ford made a dramatic turnaround, and Ford Motor Company was the only US car dealer not to get a government bailout.

Mulally BPR’s changed Ford’s culture, eliminated office politics. More importantly it created a harmonious culture of accountability. Learn why at Which is Best Individual Meetings or Team Meetings? Personal Story on Accountability.

Strengthen your teams performance and accountability!

Positioning Systems is obsessively driven to improve your business and your team’s execution.   3 Strategic Disciplines :  Priority ,  Metrics  and  Meeting Rhythms  help your business dramatically improve your forecasting, individual, and team performance creating alignment.

As an Execution Decision, Strategic Discipline increases your Profitability.

Positioning Systems helps your business achieve these outcomes on the Four most Important Decisions your business faces:

We help your business Achieve Execution Excellence.

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Positioning Systems helps mid-sized ($5M - $250M) business Scale-UP. We align your business to focus on Your One Thing !  To achieve growth, you need to evolve in today’s rapidly changing economic environment.  Have you been avoiding a conversation on how you can successfully grow your business? Contact [email protected] to Scale Up your business! Take our Four Decisions Needs Assessment to discover how your business measures against other Scaled Up companies. We’ll contact you .

In 8 P’s – A Powerful Way to Discover Strengths, Weaknesses, Trends I shared why this tool is superior to the traditional SWOT, and better then SWT.   Last week I met with a former E-Myth customer to help his business craft a plan for 5-10 years.   More on why the 8 -P’s and what we learned next blog.

Topics: weekly meetings , Cadence of Accountability , meeting rhythms , Meetings a Cadence of Accountability , leadership meetings , Alan Mulally , American Icon

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Organizational Culture Change Example – Alan Mulally Ford Turnaround Story

by Tushar Vakil | Leadership

Organizational Culture Change Example – Alan Mulally Ford Turnaround Story

Alan Mulally’s Ford turnaround is an amazing example of organizational culture change. How do you change the culture of an organization to a high-performance culture? How can leadership contribute to organizational culture change? The Alan Mulally Ford turnaround story is the best example of leadership and organizational culture change.  Read how Alan Mulally not only transformed the organizational culture but also orchestrated one of the most spectacular turnarounds in business history.  Learn how you can transform the culture at your company into a high-performance culture.

Henry Ford, the assembly line, and the American Icon

Ford motor company is the American icon that Henry Ford started in the early 1900s.  In the year 1913, Ford was the first company to start cars’ mass production through the assembly line process.  The assembly line manufactured model T car was priced affordably for an average American, and it became an instant success.  By 1925, Ford had a 56% market share in automobiles, and it became one of the most successful car companies in the world.

Click below to read an equally spectacular failure story

The FAILURE story of the legendary Henry Ford and the lesson for leaders

The American icon in trouble

Fast forward to 2006, just about 100 years later – Ford Motor Company, the American icon, was about to lose $17 billion that year.   The company’s debt was rated at “junk” status, and the stock had halved in value from $17 in 2004 to about $8 in 2006. Bill Ford, the great-grandson of the legendary Henry Ford, had taken over the company’s helm for the previous five years but was unsuccessful in turning the company around.  If things didn’t change drastically, Ford was on the verge of bankruptcy.

The call for help from Bill Ford to Alan Mulally for organizational culture change and to save Ford

Bill Ford called Alan Mulally to take charge of the troubled company and turn it around.   Bill Ford knew that Alan had pulled a similar feat at Boeing and figured that Alan Mulally’s leadership genius was his last chance to save the iconic company from bankruptcy.  Alan had successfully maneuvered Boeing through the Asian financial crisis of the early nineties and the catastrophic events of 9/11 when they had to reduce their production of airplanes from 620 a year to just 280.  Boeing survived and thrived through it all, under the stewardship of Alan Mulally and his leadership skills.  In fact, Boeing had launched the 777 airplanes that allowed it to sprint ahead of the archrival Airbus.  In 2006, when Bill Ford called him to take the helm at Ford, Alan was in the middle of developing the 787 Dreamliner airplane.

Alan didn’t want to leave Boeing.   He had joined Boeing as a fresh graduate engineer and risen to the level of CEO.  It was the only company he had worked for in his entire 37-year career. Alan had successfully maneuvered Boeing through the unprecedented crisis of the terrorist attacks on September 11, 2001.  Overnight, Boeing’s orders halved. Alan’s leadership helped Boeing survive and thrive.

On top of it, Alan knew very little about the automobile industry. Leaving Boeing to come to Ford was not a consideration.  Bill Ford pleaded his case with the loss of countless people’s jobs if Ford were to go under.  Alan Mulally agreed to lead Ford, the American icon, in an attempt to save it from going under and turn it around.

image Source – Ford Motor Company, CC BY 3.0, via Wikimedia Commons

Bad times for American auto manufacturers

2006 was a bad time for American automobile companies.   Japanese companies like Toyota and Honda were making better cars at a lower cost and steadily taking market share.  But that was not all.  Ford had a lot of internal problems.  The once glorious company was now plagued with regionalism and fiefdoms, too many low-quality products, and a culture that stifled any change or innovation.  If Alan were to be successful in turning Ford around, he would have first to transform Ford’s culture.  Without a drastic change in culture, any attempt at turning the company around would likely fail miserably.

Winning over the board and the team at Ford

Bill Ford wanted to ensure that the Board of directors was OK with appointing Mulally as the CEO. The board at Ford had already decided to hire an outsider as the CEO as they didn’t see anyone within Ford that was fit for the CEO’s role.  Once he convinced Alan Mulally to take over as the CEO, Bill Ford arranged a meeting of the board with Alan.  The board assured Alan that he could reappoint or fire anyone he thought was unfit – even if that person was close to Bill Ford himself.  Alan smiled and assured them that he wasn’t going to fire anyone.  He had better ideas in mind to turn the company around.

How did Alan Mulally turnaround, Ford? Through Organizational Culture change!

Here is how Alan Mulally orchestrated the organizational culture change and a spectacular business turnaround

Changing the status quo at Ford

During his first few weeks at Ford, Alan attended too many meetings for his comfort.  He found that many things were discussed in the meetings, but little seemed to get done.  He quipped – If we spend all our time attending meetings, when will we have time to think about our customers?  He then introduced the concept of Business Plan Review (BPR) meetings that Alan had successfully used at Boeing.   Alan and the entire leadership team at Boeing met every Thursday for BPR or Business Plan Review.  At the weekly BPR meeting, each leader had to deliver a brief status update on their top 4-5 priorities.  He used a simple red-yellow-green indicator to show whether the plan was on track or not.  Green meant that things were going as per plan.  Yellow meant that there were challenges to achieve the plan, but there are measures in place to get things back on track.  Red meant that the plan was off track and needed urgent attention.

Alan’s first BPR at Ford

At his first BPR  (Business plan review) meeting at Ford, Alan Mulally asked the 16 top leaders at Ford if they were in green, yellow, or red on their top 5 priorities.  To Alan’s surprise, almost everyone responded by saying that everything was OK, and everything was green! 

Alan responded – We are about to lose $17 billion this year, and you are saying that everything is OK?  Did we plan last year to lose $17 billion this year?   If the answer to that question is yes, then we are in the green. Otherwise, we are not!  Eventually, one leader admitted that he was in red.

Alan Mulally thanked the leader for his honesty, stood up, and applauded the leader.  He said thank you for having the courage, telling the truth, and admitting that you have a problem and don’t have all the answers, and are unsure how to get things back on track. 

What he said next was simply amazing.  I am Alan Mullaly.  I am the CEO of Ford.  I know very little about making and selling cars.  I definitely know a lot less than you guys do about making and selling cars.  And it is OK!  He said – “We just need to act on reality. Then we’ll be back making the best cars in the world. I know nothing about building cars.  It is ok to admit that.  We have to be completely honest, accept reality, and then decide further course of action.”

A dose of radical transparency was delivered

That was a dose of radical candor and transparency.  Usually, the opposite happens in organizations.  Leaders often don’t know the answers but are afraid to admit them. Team members are afraid to call out the leader on such issues.  Meeting after meeting, leaders talk about all kinds of issues but avoid talking about the proverbial – “elephant in the room.”  Leaders pretend to know things and posture to others that they know, even when the truth is that they are unsure and need help. A culture of honesty and transparency allows issues to be brought out in open.  Without admitting the problems, without facing the reality, there was little chance Alan, or anyone could turn a company around.

Billionaire Ray Dalio calls this radical transparency.   In his famous TED talk, Ray Dalio openly shared an email that his subordinate had written to him.  It was candid feedback on his own performance.  In a normal organization, anyone giving such feedback to the CEO would probably get fired.  But Ray not only welcomed such radical transparency, but he was also happy to share it with ALL the employees in his company and the entire world through his TED talk.  Ray Dalio credits his success to the principle of radical transparency.  Transparency allows discussion of problems and their solutions.

Read the article on Ray Dalio and radical transparency here – Creating a team culture where the best ideas win .

Alan had the courage and the humility to admit openly that he didn’t know the answers.  Can you guess what would have happened if Alan, instead of admitting that he didn’t know, would have postured to know the answers?  When the idea comes from the boss, people just jump on the idea.  Instead of fixing the real problem, chances are that the team would implement the boss’s idea to please him and get on his good side!  Alan had the discipline and the courage to say – “I don’t know” openly so the people who really know can start working on the problem!

Patrick Lencioni defines this leadership quality as vulnerability-based trust.  What is vulnerability-based trust?  It is a place where leaders comfortably and quickly acknowledge their mistakes, weaknesses, failures, and the need for help. These leaders also recognize the strengths of others, even when those strengths exceed their own.

A culture of Psychological Safety

Extensive research by Amy Edmondson shows that psychological safety is essential for high-performing teams.  She defines Psychological safety as a belief that one will not be punished or humiliated for speaking up with ideas, questions, concerns, or mistakes.  When the leader exhibits humility, it increases the psychological safety of the team.  This allows the team to discuss problems, brainstorm solutions, try various options, learn from mistakes and find innovative solutions.

Coming back to the BPR at Ford,  Alan Mulally said we have brilliant people working in this organization.  Let us ask for help from them.  And they did! Alan recalls that 10 minutes later, the leader and the team were well on their way to solve the problem.   The right people were called in to help, and they would take the discussion offline to make a plan to get back on track.  Alan called these meetings SAR (Special attention review) meetings.

Discipline to stay the course. 

A normal CEO would have been extremely tempted to add their “two cents” worth to solve the problem.   They would say – “Have you tried this or have you tried that?”  What would have been the result if Alan did that?  I guess some or all of the leaders would immediately jump on the idea to impress the new boss!  What would have been the result, knowing the fact that Alan didn’t actually know much about a car company?  Alan had the discipline to keep his mouth shut, honesty to admit he didn’t know, and the courage to ask others for help.

How do you get your leadership team to a much higher level of honesty and transparency?  Continue to the end of the article, and I will answer this question.

Dr. Marshall Goldsmith quotes Peter Drucker – Our mission in life is to make a positive difference.  It is not to prove how smart we are, and it is certainly not to prove how right we are!  Leaders often get lost trying to prove how smart we are and how right we are.  Alan Mulally said clearly with his words and his action that he was not there as the Ford Motor Company’s CEO to prove how smart he was and not there to prove how right I’m here he was.  His job was to turn the company around and make a positive difference in the lives of people.

That was the first major step towards the organizational culture change that Alan Mulally orchestrated at Ford. Can you imagine the impact of Alan’s candor and transparency on the 16 top leaders at Ford who was present in the first BPR?  Alan didn’t just offer a new way to conduct meetings or solve problems, but showed a completely new way of interacting with the team members – a major step towards creating a culture of honesty, transparency, and accountability.

Read the article: Psychological safety at work – Why you need it and how to develop it .

Zero tolerance for bad leadership behaviors

A second major step towards organizational culture change

The other major step towards the organizational culture change that Alan Mulally implemented at Ford was zero tolerance for bad leadership behaviors.

What are some of the bad leadership behaviors, and what is the impact on employee engagement, performance, and culture?

Read my article:  Poor leadership behaviors and their collateral damage

Egos, politics, silo mentality are just the side effects of poor leadership behaviors.   Poor leadership behaviors leave significant collateral damage to trust, relationships, accountability, and focus on results.  This drastically reduces performance.

No bad leadership behaviors tolerated

Alan Mulally had zero tolerance for bad behaviors as well as any deviation from established norms. 

No sarcasm or jokes at the expense of other team members. There was no gossip and no talking behind the back.  Any feedback had to be delivered directly to the person and his/her face.  Everyone had to pay attention during the meetings: no cross-talk, no checking on emails, and no phone calls.  Alan clearly led by example.  He would stop the meeting and ask the person to use the phone or check emails if it was more important than attending the meeting.  Discuss issues and suggest ideas based on merit: no ego pampering, no silo mentality, no individual goals at the expense of team results. 

Ten norms (rules) imported from Boeing.

Alan Mulally also imported 10 rules from when he had worked at Boeing:

1. People first 2. Everyone is included 3. Compelling vision 4. Clear performance goals 5. One plan 6. Facts and data 7. Propose a plan, “find-a-way” attitude 8. Respect, listen, help, and appreciate each other 9. Emotional resilience … trust the process 10. Have fun … enjoy the journey and each other

Accountability for results. 

As a leader at Ford, if you had promised to do something, as per the BPR, you’d better have a good reason if there was any deviation!  Alan’s key ingredient for success was “tough love.”  He held everyone accountable, and he started with himself.

A gut check moment happened when one of the senior leaders went to Alan’s office to talk to him about his policy of zero tolerance.  He said – what is this boy scout stuff of being a “good boy”.  We are all adults and we don’t need a babysitter to tell us how to behave.  Alan listened to him patiently.  Then he replied – Yes we are all adults.  I made a choice to create this culture at Ford.  You can make a choice too.  Stay here and be a part of it, or go somewhere else where you can behave the way you like.  This was one of the board members Alan was speaking to.  He was stunned!  He decided to leave Ford.

One more board member approached Alan with a similar issue.  Alan absolutely insisted that no bad behavior will be tolerated anymore at Ford.  This board member also decided to leave Ford. The rest of the board members decided to work on changing.  Alan provided them help – in the form of stakeholder-centered coaching.  He gave them all the support and encouragement.  But there was zero tolerance for bad behaviors.

Alan said that no individual, however brilliant, should not be allowed to create a toxic culture.

Alan turned Ford around working with the same 14 of the 16 board members, who had taken Ford to a $17 billion loss!  That is the power of organizational culture change.   It is not the people, but the culture!

Alan had promised the board of directors at Ford that he would implement BPR at Ford but had no intention of firing anyone. It was possible that a few people may leave because of the transformation in culture and not being able to cope up with the new culture of accountability.  And he kept that promise.  Unlike many CEOs who start their tenures with mass layoffs, Alan did not fire any senior leader.  Some people left on their own because they didn’t want to fit into the new culture.  That is a testament to Alan Mulally’s leadership and his ability to implement organizational culture change successfully.

Read the article: Team coaching – Everything you wanted to know about it .

Maneuvering the long road to success through organizational culture change

Over the years, there were a lot of ups and downs.  The worst was yet to come.   At the height of the 2008 financial crisis, Ford’s stock went down to just $1.  Analysts questioned the appointment of an outsider as the CEO of the big three American auto companies. A local reporter asked how he could be successful as a CEO when he knew nothing about cars.  Alan quipped that an average car has 30000 parts. A Boeing 777 has over 3 million parts. Plus, an airplane has to stay up in the air, so the margin of error in building an airplane has to be zero! The reporter was speechless.

Alan had to make some tough decisions.   He had to sell many of Ford’s luxury brands like Jaguar, Land Rover, Volvo, and Aston Martin. He had to renegotiate the unreasonable union contracts.  Internally, he had to break down the silos and remove the fiefdom mentality through his “One Ford” plan.  Despite staggering losses, Alan borrowed $23 billion to restructure the company.  These once controversial decisions turned out to be brilliant moves over the long term.  Alan Mulally’s leadership genius saw things ahead of time.

Alan Mulally’s Ford turnaround – delivered through organizational culture change

In 2014, when Alan Mulally retired, he had successfully turned Ford around – pulling off one of the biggest and most difficult turnarounds in the business history, and a testament to Alan Mulally’s leadership.  After the financial crisis of 2008, when General Motors had to be bailed out by a Government loan, Ford refused help from the Government, as Ford had secured money years in advance and was on the road to recovery.

In 2010, the net income at Ford had shot up to $6.6 billion. Ford had delivered 16 consecutive quarters of profitability and was well on track to return to its former glory days. Also, in a company driven by labor unions, Alan Mulally’s approval rating was unbelievable at 97%.  That is the power of Alan Mulally’s leadership and his ability to orchestrate organizational culture transformation.

P.S.  Alan Mulally was and the leadership team at Ford were coached by the same process that we offer for your leaders.  Read about the process at the end of the article.

Get the same coaching process for your leaders to create a culture of high performance.

How to implement an organizational culture transformation at your company.

Want to transform the culture at your company into a high-performance culture?  Then get the Alan Mulally leadership plan for your organization!

Alan Mulally supported the leaders with a team-centered coaching process.  We offer the exact same process for your leaders! 

Take your top leadership team through the stakeholder-centered coaching process and change your organization’s culture.

Create a culture of openness, transparency, feedback, and accountability – just like Alan Mulally did at Ford.  Identify and rectify poor leadership behaviors with guaranteed and measurable results.

• As Marshall Goldsmith used to develop leaders at 150 of the Fortune 500 companies, we offer the same coaching process.
• Our leadership coaching using a stakeholder-centered coaching process – delivers guaranteed and measurable results.
• Do you want to transform the culture of your organization?  Do you want to develop effective leaders who deliver results?
• Connect with a leadership advisor to find out how our individual and team coaching can help you develop leaders, transform organizational culture change, and deliver high performance.

We offer our New Age Leadership – NAL Triple Advantage Leadership Coaching

that delivers guaranteed and measurable leadership growth.  It is based on a stakeholder-centered coaching process with a 95% effectiveness rate (in a study or 11000 leaders on 4 continents).  It is used by companies ranging from startups to 150 of the Fortune 500 companies to develop their leaders.

Here are some of the salient benefits of NAL Triple Advantage Leadership Coaching

Time and resource-efficient : The leader does not have to leave work to attend training programs.  We go to the leader and her team.  And it only takes 1.5 hours per month. The rest of the time, the leader is working to implement with her team.

Separate and customized improvement areas for each leader : Every leader is different.  One size fits all approach doesn’t work.  Individual development areas for each leader aligned to the business strategy.

Involves entire team: Unlike most leadership programs, NAL Triple Advantage Leadership Coaching involves the leader’s entire team, and it has a cascading effect – increasing the team effectiveness and improving organizational culture.

The leader becomes the coach: for continuous improvement for leaders themselves and their teams. It is like kaizen for your leadership development.

Cost-Effective: Our entire one-year coaching engagement often costs less than sending the leader to a short-duration leadership program at any reputed B school.

Guaranteed and measurable leadership growth: as assessed – not by us – but anonymously rated by the leader’s own team members.

Pay us only after we deliver results! : We work with many of our clients on a pay for results basis.  What does it mean?  If the leaders don’t improve, you simply don’t have to pay us.

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References:

American Icon – Book by Bryce G. Hoffman