Today’s top executives are expected to be everything and do everything right. From dreaming up realistic solutions to impractically complex, shifting challenges, to having the charisma and presence to rally stakeholders around a vision for the future, leaders have an impossible task. And the pressure to be perfect can be as stressful as the job itself. It’s why at the MIT Leadership Center we encourage people to ease up on the pressure, focus on your strengths, and be an “incomplete leader.” Very few leaders can be great at sensemaking, relating, visioning and inventing.
But Alan Mulally comes really close.
There’s a good reason why Bill Ford Jr. celebrated with champagne when he learned Mulally – former president and CEO of Boeing Commercial Airplanes and now a Google board member – would take the reins of Ford Motor Company. The company was clearly broken: its stock price had fallen precipitously (the low was $1.01 per share in 2008), its debt was at “junk” status and 2006 would go down as the worst year in its history with a $12.7 billion loss. It was widely expected that Ford would eventually file for bankruptcy. But by the time Mulally retired on July 1, 2014, Ford had succeeded in making a triumphant turnaround, a history-making revitalization that others attempted and only Mulally achieved.
How? He quickly figured out what the problems were, built a base of support, aligned to a new vision of what Ford could be, and drove execution. Sounds simple right? But no one before him was able to cut through the political infighting, entrenched culture and poor quality.
The centerpiece of Mulally’s solution was as basic – and pivotal – as a weekly meeting. Here’s what he shared with me recently when we sat down for an MIT Leadership Series interview.
- Sensemaking. When Mulally moved from Boeing to Ford, he had to quickly understand the dynamics of the auto industry, a failing company, a changing economy and shifting consumer preferences. He relied on his team – and together they worked to recognize reality, make sense of it and then deal with what was really important.
Mulally explained, “Every week, we got together and went around the world. We looked at all the risks and opportunities and the business environments. We looked at our strategy. ‘Does it still make sense? Are there any changes we need to make?’ Then we looked at the details of our plan… You’re constantly updating your sense of reality, but it’s not just me doing it, it’s the entire team.”
Communication amongst his team was crucial, but so was prioritizing. Mulally instituted a traffic light system to keep them focused – green light, all is well; yellow, some attention is required; red, situation critical.
- Relating. Ford’s board, shareholders, suppliers, customers, management team – none were happy with the way things were. Mulally stepped in with the notion of working together as a team with transparency and honesty. With his boyish grin, positive attitude, and ongoing support, he connected with others easily. But he needed everyone else to connect too.
“It was such a natural thing for me to include everybody, because that’s what you have to do if you’re going to change the world with a new product,” he told me. “It was really important that we had everybody on the team, the leaders around the world, the skills teams around the world, and that we – together – unite around the vision, the strategy, the implementation plan.”
His weekly meeting offered the ideal forum, where Mulally fostered a safe, open, encouraging and respectful environment. “Every week, we worked it [the strategy and the plan] together, helping each other turn the reds to yellows to greens.”
- Visioning. Mulally introduced the concept of One Ford, with a comprehensive strategy built around People, Products and Productivity – and oh, by the way, had to shift people’s mindsets so that they really believed a turnaround was possible and a new Ford was just ahead.
“The more people know why you exist and what the vision is and what the strategy is for achieving it – and they’re involved in it, know the status, feel appreciated – the more people will engage and love what they do,” he said.
Mulally believes the real competitive advantage is to create a healthy company where everybody is fully engaged, contributing with their hearts and minds, and believing they really are contributing to something that’s bigger than just making a salary. “They’re actually contributing to making a cathedral, something that’s really important for everybody.”
- Inventing. At a time when Ford was losing billions of dollars every quarter and when the company had basically been mortgaged to foot the bill for the turnaround, it was up to Mulally to drive relentless implementation with the goal of achieving profitable growth.
Even when things looked dismal, he didn’t give up on his plan. “Everybody knows what we’re trying to get done, the status, areas that need special attention… everything we share outside is exactly what we share inside. They’re not different plans. You’re not telling different messages to different people.” It’s clarity – not a source of stress. You know you’re working on are the right things.
The company that was going out of business for 30 years became profitable. To help make the turnaround possible, Mulally used a simple tool – a weekly meeting – to emphasize the importance of making sense of the current reality; to encourage and showcase joint collaboration and ownership of the problems; to remind people of the vision guiding them to a better future; and the need to always work the plan no matter what happens.
Mulally may be a “Googler” now, but the underpinnings of his leadership approach remain the same. “There’s more the same than different – Boeing, Ford, now Google,” Mulally concluded. “The collaboration is exactly the same.” Perhaps we will see more weekly meetings showing up on a global basis.
And he’s still working on projects that can change the world.