How Alan Mulally saved Ford Motor Company with four simple decisions

Alan Mulally

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Ford had a toxic, macho culture that was ruthless to outsiders, had forgotten its customers, and had an outdated and bloated product lineup of vehicles that fewer and fewer customers wanted.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:

  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

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 Scaling Up 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.

Contact me or sign up for my upcoming workshop in April to learn more about how you can apply these fundamental principles and framework to your business.

Be Exceptional!

Scaling Up Workshop II

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The world-renowned Scaling Up Business Growth Workshop empowers you to accelerate profitable growth using a time-tested and results-driven methodology. Through this exclusive learning experience, Gazelles Coaches has empowered more than 40,000 executives and their leadership teams with proven tools and strategies to scale up smarter.

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* Receive 50% of the fees for this workshop paid for by the state of MA.  Click here to see if you qualify.

“Like many good coaches, Bill knows that buy-in, follow through and confidence are enhanced when ideas and priorities are generated from within the organization. Bill will motivate and guide you to do the work and make progress producing alignment and results” – Global Educators’ Office of the President

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