18 Months in Crisis Mode

So here are some lessons from a Leader guiding his company through crisis for a little over a year now, and getting some traction.
A partial list of what Alan Mulally inherited when he took the CEO job at Ford in the Fall of 2006 – the “Brutal Facts:”

  • A divided company, actually a lot of different companies under one roof, each with a leader going in a different direction
  • Tight cash flow with a real risk of running out altogether
  • A built-in $3,400 expense premium on every finished product based on onerous labor costs
  • Complexity of business systems that predecessors had been unable to untangle
  • Infighting and turf wars among his direct reports
  • Lots of elaborate plans (marketing, manufacturing, sales, product) followed by poor execution
  • A talented and dedicated team of workers (the problems lay mostly with management, not the workers!)

At lunch last week in Charlotte, home to big banks reporting record losses, my friend sat down and said, “Well, at least we can celebrate Ford’s good news.”
Indeed, Ford had just reported a $100 million profit, the sixth quarter of year-on-year improvement. Ford isn’t out of the woods by any means, but Mulally’s leadership seems to be having an impact, and Wall Street has growing confidence he will deliver on his goal of sustained profitability by 2009.
Kirk Kerkorian, a billionaire with a history of bullying the leadership of the other two Detroit automakers, is bullish on Mulally. As of Monday, he had acquired a nearly 5% stake in Ford, with tender offers for more. Jerome York, advisor to Mr. Kerkorian, was quoted in The Wall Street Journal as pleased with the progress the CEO was making in cutting costs and focusing the business. “. . . he has the skill set, the passion, the vision to succeed. We have a lot of confidence in him.”
Every Leader I talk with these days is in the middle of a tough quarter, and foresees more tough quarters ahead. Mulallys’ timeline stretches for three YEARS . . . minimum!
So what’s he been doing, that provides examples to all of us, whether we’re running a public behemoth or a promising start-up?

  • Get everyone on the same page. Ford has 750,000 representatives worldwide, including their dealerships. “One Ford.” This is the internal branding message that ends individual fiefdoms and reminds every Leader of their higher purpose within the company.
  • Re-consider each product. Mulally pledged to “rationalize” each of the company’s cars – code for “should we really be building and selling this? If so, why?”
  • Hold everyone accountable. The CEO shifted from multiple smaller meetings of his division heads into a consolidated Thursday morning meeting. Each Leader must give a frank assessment of their status and progress. Mulally asks pointed questions and expects clear answers. With all the leaders in the same room, he ensures cooperation and execution.
  • Maintain until complete. Mulally spoke of “one Ford” six weeks into his tenure. Now, 18 months later, the phrase has been formalized – “One Ford” — as an operating principal. No one would mistake it for the leadership fad or flavor of the month.
  • Pursue simplicity. Under Mulally, Ford is simplifying product lines, marketing campaigns, internal communications, planning, decision-making. This clears out clutter and makes more room for execution.

This is what one Leader is doing during tough times. They’re working for Mulally and Ford.
What’s working for you and the company you lead?

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