Business Standard

Book Extract: A connected culture

Ford Motor's former CEO Allan Mulally wanted leaders to openly share the obstacles they faced

Michael Lee Stallard 

Author: Michael Lee Stallard
Publisher: ATD Press

ISBN: 9781562869274
Price: Rs $24.95

When Alan Mulally was introduced as the next CEO of Ford Motor Company in 2006, he stunned the audience by candidly answering the question "what kind of car do you drive" with the response, "a Lexus . . . the finest car in the world." The room fell silent. Mulally's tenure as CEO of Ford was also full of surprises, particularly the remarkable turnaround he orchestrated.

The year Mulally arrived at Ford, sales, market share, and profits were falling, and the automaker's culture comprised silo rivalries with leaders embroiled in turf wars. This culture drove Ford to the verge of bankruptcy. By the time Mulally announced his retirement in May 2014, he had led Ford to 19 consecutive profitable quarters and rising market share in North America. And unlike American rivals General Motors and Chrysler, Ford did not seek a US government bailout following the financial crisis in 2008. At his retirement, rather than the stunned silence Mulally experienced when first introduced, Ford employees gave him a standing ovation.

Alan Mulally is an excellent example of a leader who created a connection culture. He used founder Henry Ford's original vision of "opening the highways for all mankind" to express how the company makes the world a better place by serving others. Mulally explained that Ford gives people freedom of mobility so they can access opportunities for growth. This united employees around the vision and focused them on a cause greater than self. The vision was also factored into decision-making processes, such as in evaluations of new product development. The newly designed F-150 pickup, for example, got an aluminum-based body that made it lighter, more fuel efficient, and more affordable.

Book Extract: A connected culture
Mulally also boosted value in the Ford culture. He frequently used the phrases "One Ford," "one team," "the power of teams," and "working together always works." He also distributed wallet-sized cards with Ford's business plan on one side and 16 expected behaviors (values), including "work together effectively as one team," on the other. In meetings, he acted as a facilitator and coach rather than a dictator, prohibiting humor made at the expense of others. Rather than thinking of other individuals and organizations as competitors, Mulally employed a "win-win" approach to external relationships. This helped him forge an agreement with the United Auto Workers union to make the changes necessary for Ford to make a profit in return for bringing production back to the United States. It also helped him consolidate Ford's purchases to suppliers that were willing to partner with Ford to drive down costs in return for receiving a greater share of Ford's business.

Mulally expected leaders to openly share the obstacles they faced, and celebrated leaders who helped one another instead of focusing solely on problems in their domain. Another way he increased voice was through the weekly business plan review (BPR) meeting. Held at Ford's global headquarters in Dearborn, Michigan, the BPR is attended by the global leadership team and all business and functional leaders, either in person or by teleconference. At BPR meetings leaders give updates on their goals, which are color-coded green for on-target, yellow for at-risk, and red for off-target. When problems are identified, follow-up meetings are scheduled to dig deeper and identify solutions. BPRs also address strategic topics, such as the economy, labor supply, and competitive developments.

Reprinted with author's permission

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First Published: Mon, November 09 2015. 00:07 IST