The story of how the venerable Ford Motor Company managed to recover from the Great Recession of 2008 is considered one of the greatest corporate turnarounds in U.S. history. Not only did Ford recover, but it ended up thriving and achieving heights once thought impossible for an American carmaker.
On the 10-year anniversary of this remarkable rebound, it’s instructive to examine how Alan Mulally, the former Boeing executive who was recruited to save the company, led Ford’s recovery. Not only did he re-ignite innovation and consolidate operations within the organization, but also he revived consumers’ and employees’ passion for the Ford brand.
Mulally accomplished all of this by communicating and role-modeling the attitudes and behaviors that his organization needed to embrace. While other business leaders often seem to come down with a case of the “do as I say, not as I do” syndrome particularly during crises and challenges, Mulally provided the words and the actions that inspired, informed, and instructed his employees to make Ford successful once again.
For example, before he arrived at the company, executives seemed to be more intent on protecting their turfs and exploiting their peers’ vulnerabilities than on moving the company forward. To combat the silo-ed thinking and self-preservation that had characterized most leadership meetings, Mulally instituted weekly business performance review (BPR) meetings that required a level of rigor, scrutiny, and detailed analysis from the company’s leaders that had been previously unheard of. He admonished them to “let the data set you free” and instituted a uniform set of metrics by which everyone would be measured.
While the executives initially bristled at Mulally’s demands and resisted the changes, over time they began to see that the transparency and egalitarianism that he enforced effectively united them to work together on the company’s business goals and that the commitment he expected was in service of resurrecting the Ford brand.
Mulally also modeled Ford’s core values of working together, having fun, and including everyone by eating lunch in the company cafeteria. Instead of using the posh executive dining room as his predecessors did, he would stand in line at the salad station, chat up anyone he found himself next to, and then walk up to a table of employees and ask to join them. He didn’t only talk about Ford’s values, although he did refer to them regularly. He demonstrated them visibly, thereby conveying his personal commitment to the company’s core values.
Perhaps the finest example of Mulally’s “do as I say and as I do” style came about when one of his direct reports decided to put it to the test. In American Icon, Bryce Hoffman describes how Mulally had introduced a color coding system for his executives’ reports that used colors to indicate the status of every program or project — green for those that were on track or ahead of schedule, yellow for those at risk with potential issues or concerns, and red for those that were behind schedule or off- target. The idea was to make it easy to track changes in status and pinpoint problems.
Mulally had assured his team that the meetings were a safe environment where they could raise problems for the group to work on together, but at the beginning, everyone insisted on labeling all their charts green. Finally Mark Fields, then-president of Ford’s U.S. business, decided to test Mulally’s words of assurance. Hoffman writes that Fields thought “somebody has to figure out if this guy is for real.”
At the next meeting, Fields began his presentation with some preliminary data and then moved on to a chart that showed a new product launch was delayed; it was marked with a red flag. He paused and waited in silence, along with the rest of attendees, expecting to get chewed out and possibly fired for admitting a problem. That’s what would have happened under previous leadership.
Instead, Mulally started clapping and commended him for the “great visibility” he shared. Turning to the rest of the group, Mulally then asked who could help Fields address the problem and facilitated a discussion among the group that identified potential solutions. The meeting served as a turning point for Mulally and his people. They learned he was true to his word.
Mulally was effective because he combined clear and compelling communication with distinct and deliberate action. Within a year of his arrival at the company, managers throughout the organization began to emulate his focused and data-driven approach and everyone’s energy was focused on re-building the Ford brand. Soon thereafter, Ford the company was restored to profitability and Ford the brand, to preeminence.
Mulally’s “do as I say and do” leadership during Ford’s crucible moment demonstrates the exponential power of integrity. Integrity could quite possibly be the most important characteristic of a leader. Not only is it inspiring and engaging — it’s contagious.
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