“Bill’s principles, framework, and methodologies align very closely to my own Working Together Principles that were applied to measurable success at Boeing and Ford. I was proud to nominate Bill as an MG100 member to help us advance systemic, extensive leadership development that increasingly creates healthy, thriving businesses, and enhances human flourishing. I look forward to our continued work.” – Alan Mulally (former CEO, Boeing Commercial Aircraft, and Ford Motor Company)
How Alan Mulally saved Ford
It was the summer of 2006, Alan Mulally was knee deep in getting the Boeing 787 “Dreamliner” designed and built when Bill Ford asked him to take over his role as President and CEO of his eponymous company. Ford Motor was slowly going out of business, as were the other major car companies, due to years of hubris and poor management practices. Bill Ford was over his head and needed help. Mulally was tasked to come in and save the embattled company.
Ford knew that Mulally was his best and last chance as he had pulled off a similar miracle of sorts years ago at Boeing. In the 90s and early 2000s, Boeing was getting its butt kicked by Airbus and needed to do a better job of designing and building competitive aircraft. It took several years, under difficult circumstances (9/11 being one of them) for Alan Mulally to lead the process that successfully turned Boeing around. Ford wanted him to do it again. This time in Dearborn, Michigan.
Mulally did not want to leave Boeing. It was the only place he had ever worked since graduating college. He loved the company. He loved designing and building airplanes. He and his family loved the Seattle area where Boeing was based. However, it was too tempting to be asked to run an American institution such as Ford. Moreover, his aerospace engineering background favored solving difficult problems such as the one laid out by Bill Ford.
Once he finally agreed, Mulally spent time learning as much as he could about the business and the industry. He was a quick study and became confident that he could fix the ailing Ford.
Ford had a toxic, macho culture that was ruthless to outsiders, had forgotten its customers, and had an outdated and bloated product lineup of vehicles that fewer and fewer customers wanted. On top of this, they were running out of money. His task would not be an easy one.
Mulally quickly won over the company and its board of directors. In 8 years, he took a company from the brink of collapse to dominate the industry.
How did he do it?
Mulally focused on the basics. He had a list Core Values of how to run organizations. He honed them over 20+ years. They were the bases for his success at Boeing. When he came to Ford, these simple rules were the foundation of this unprecedented turnaround.
I was fortunate enough to hear him speak last year at a Vistage event as he described in some detail the incredible story. Mulally used just ONE slide for the entire hour-plus talk as he walked us through his 10 Core Values and the parts they played. Here they are:
- People first
- Everyone is included
- Compelling vision
- Clear performance goals
- One plan
- Facts and data
- Propose a plan, “find-a-way” attitude
- Respect, listen, help, and appreciate each other
- Emotional resilience … trust the process
- Have fun … enjoy the journey and each other
He also came up with four decisions below that he knew Ford had to get right in order to climb out of its tailspin. Coincidentally, these decisions line up well with the framework of People, Strategy, Execution, and Cash that I use as a foundation for the work I do with my clients.
(American Icon book excerpt) On November 14, (2006) as he was finalizing his presentation for the board, Mulally finally managed to distill everything down to four simple points:
1 Aggressively restructure to operate profitably at the current demand and changing model mix. (EXECUTION)
2 Accelerate development of new products our customers want and value. (STRATEGY)
3 Finance our plan and improve our balance sheet. (CASH)
4 Work together effectively as one team. (PEOPLE)
Not only did Mullaly and the team from Ford execute an improbable turnaround over the next several years by relentlessly executing a strategy focused on the customer by a cohesive team, they did it during the Great Recession. GM and Chrysler needed taxpayer money to bail them out. Ford did not take a dime.
Suggestion: Write down your four simple yet impactful decisions to drive your company over the next few years. Can you distill them down to one sentence each?
I encourage you to read the entire fascinating story as told by Bryce G. Hoffman: American Icon: Alan Mullally and the Fight to Save Ford Motor Company.
Bill – Certified Growth Coach, Foundations in NeuroLeadership certified, MG100 member, Predictive Index Certified Partner
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5 thoughts on “How Alan Mulally saved Ford Motor Company with four simple decisions”
Just got off the phone with you as we are both members of the MG 100 (Marshall Goldsmith’s 100 Coaches) and after hearing you speak about Alan Mulally, I had to come and read your quite remarkable, clear and articulate article about his approach to leadership including his 10 Core Values and four steps that Ford needed to get right of: Execution, Strategy, Cash, People that he presented to the Board.
What I appreciated about those steps is that Alan (and you in your work) got where the Board was coming from and knew that what they’d be listening were:
1. Execution (= get results that are profitable) and how that probably got the Board’s attention, appreciation and respect right out of the gate
2. Strategy (= “Okay, you got us at ‘hello,’ now how are you going to do that?”)
3. Cash (= “Okay, now tell us again how this is going to lead to cash because we’ve been hemorrhaging money for years”)
4. People (= “Okay, you’ve made a compelling and convincing case, now we’re willing to listen to you about, ‘Ugh, people’ “)
I’m guessing that got “buy in” from the Board enough to gain him a vote of confidence to run with it.
Now of course, when he was approaching his people, he put them first and knowing that they knew more about the car business than him (he was an aircraft guy and had spent most of his career at Boeing) and with sincere egolessness, reached out to them and essentially said, “I need your help to figure this out.”
I’m guessing that his humility compared to the prior hubris in leadership at Ford combined with his respect, confidence and belief in Ford’s people being able to come up with the answers the company needed to fix itself, not only gained their buy in, but won them over.
Mark – Excellent summation. Thanks for the comment!