Alan Mulally’s Secret to Ford’s Success (Exclusive Book Excerpt)

I have been fortunate to interview some of the world’s top business leaders and everytime I write a book I ask myself who in my Rolodex should I include? What would my readers want to hear from? It was a no brainer to include Mulally the savior of Ford to talk about opportunity. With Mulally’s announcement of his retirement on July 1st (which surprised the street b/c they were expecting a retirement towards the end of the year), I wanted to post a piece of my Alan Mulally Chapter from Opportunity Knocking.

Alan Mulally of Ford

(this following is an excerpt of Opportunity Knocking)

When Mulally found out I was writing a book about opportunity, he wanted to participate because of his passion for unlocking and tap- ping into circumstances. His approach to weighing opportunity is very pragmatic. Mulally looks at the concerns or worries facing the company and turns them into positives. He explained it to me this way: “I like the word ‘opportunity.’ I looked up the definition in the dictionary, and one of the definitions is ‘a good chance for advancement or progress.’ Think about how cool that is! The word ‘opportunity’ is just fantastic. You don’t wait for an opportunity. It doesn’t come to you when you are just sitting in a room.”

Mulally uses the following three-part checklist to unlock opportunities:
• Weigh the risks of the opportunity.
• Be sure all opportunities support the vision.
• Be open to opportunistic gems.

Before I sat down with Mulally, his office emailed me the image shown on page 50—an ad from 1925, to which I immediately gravitated. The ad’s message is simple, yet powerful: “Opening the Highways to All Mankind.” Talk about a compelling vision. All good organizations have one—it is the beacon that guides a growing company. Some CEOs would have turned down the overwhelming challenge of restoring and revamping that vision, but for Mulally, coming from Boeing, it was a chance to contribute to another American icon.

GETTING BACK TO BASICS

When Mulally took over, Ford was a $16-billion company but may as well have been a dozen small businesses. The company had no unifor- mity and was not “best in class” for quality, fuel efficiency, or safety. There was no real synergy. Ford was losing money and market share. It was sinking—fast. Mulally seized the opportunity he saw in this dire situation, even though it meant taking bold steps.
How did Mulally define opportunity in this situation? He decided to narrow the company’s focus to the original Ford brand alone. This was a huge decision, and not one he took lightly, as it meant gutting the company of many of its iconic brands.

Mulally and his team went back to basics, defining a vision and then sticking with it. First, they needed to define opportunity by decid- ing what Ford was. What kind of brands would it offer? They decided to offer a full family of vehicles: small, medium and large cars, utilities and trucks. Second, Ford focused on being best in class for all of its vehicles. Third, Ford ensured its vehicles would be accepted—and adapted—by consumers around the globe. If a model was developed for the US mar- ket, it needed to be adaptable to car buyers in other countries.

Using this three-pronged approach has enabled Mulally to lever- age all of the company’s assets to serve the different needs of Ford’s global consumers: “We realized that although our cars may be the same overall, it’s the subtle nuances of taste of our consumers throughout the world that would enhance them. Eighty-five percent of our vehicles are the same but they are customized to the unique tastes and require- ments of every country and every culture around the world.”

When Mulally was initially trying to figure things out and prioritize what needed to happen, he recalls asking a question of his team: “Guys, how are we doing?” Looking back, this was a pivotal moment. At that time, Ford was losing $17 billion a year and Mulally knew the answers were not going to be easy.6 But he had the courage to shine the spotlight on the ugly reality instead of letting it fester in the shadows. By asking this question, Mulally forced his team to acknowledge they had to make some serious—and extremely painful—decisions if the company was to survive. He said to me, “We needed a plan to build a cathedral.”

Making tough decisions like these is where having a clearly defined vision and sticking to it becomes crucial. For many, the changes at Ford were devastating. But from shutting down facilities and laying off workers to eliminating brands, the actions Mulally and his team took would help boost profitability and create a stronger company over the long term.
When we spoke about these difficult decisions, Mulally told me, “No matter what industry, we want our leaders to be looking through clear glasses and have a clear plan. The situation is not good or bad. The situation is just the way it is. We get to decide what to do about it. We ask ourselves, what is the real situation and what will we do to really prosper? It’s all about people.”

From the boardroom to the showroom, Mulally emphasizes the symbiotic relationship Ford executives need to have with employees in order to succeed. If workers don’t share the same vision and enthusiasm they are let go or they leave on their own. When developing cars the company looks at the wants and needs of its global consumers. In many ways, human capital is even more valuable than monetary capital. The dynamics of an organization are key. Mulally has the personality, pas- sion, and drive—he looks for people like himself because he knows that the success of his company depends on it.

If you are inspired by what you read pls click here and order your copy of Opportunity Knocking.

Advertisements

Leave a comment

Filed under Define Your Opportunity, Leadership, Passion, Uncategorized

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s