Management Lessons You Can Learn From Alan Mulally

June 30, 2011
Former Ford exec believes Mulally's turnaround strategies can be applied in any industry.

Harvard Business School professor John Kotter has said that 70% of all major change initiatives fail. With those odds, the deck certainly was stacked against Alan Mulally when he took over Ford Motor Co. in September 2006.

As we all know by now, though, Mulally led Ford from the brink of bankruptcy to profitability, respectability and stability.

In the process, Mulally positioned himself as this decade's ultimate business icon -- the Lee Iacocca of the 2000s.

So why -- and how -- did Mulally succeed where countless others have failed to turn around their struggling companies?

That's among the questions that former Ford executive Gerhard Geyer tries to answer in his new book, "Ford Motor Company: The Greatest Corporate Turnaround in U.S. History."

"It's a fantastic story," Geyer says of Mulally's achievements at Ford.

Geyer believes that Mulally exemplifies the leadership principles outlined in Kotter's book, "A Sense of Urgency."

They include:

  • Create the vision -- Mulally and his top brass created the "One Ford" plan, which charted a course for Ford's product development, manufacturing strategy and financial rehabilitation.
  • Act with urgency -- Mulally and his team developed the One Ford plan less than two months after Mulally became president and CEO.
  • Develop the guiding coalition -- When he created the One Ford plan, Mulally involved all the affected internal and external stakeholders, from the UAW to Ford's bankers and investors.
  • Communicate the vision -- "His motto is communicate, communicate, communicate," Geyer points out in the book.
  • Generate short-term wins -- The $23.5 billion "survival loan" was a short-term win, Geyer asserts, as was the introduction of several competitive vehicles that "stabilized Ford's 15-year-long decline in U.S. market share."
  • Make change stick -- "The One Ford action plan is a permanent institution at Ford Motor Co.," Geyer writes. Mulally told Fortune in 2009 that he has a "disciplined business-review process" in place, and Geyer notes that Mulally is involved in implementing One Ford on a daily basis.
"His Thursday business-plan review meetings, as well as the hundreds of performance charts (updated daily), constantly keep top executives abreast of Ford's worldwide developments," Geyer writes.

Creativity and Charisma

Geyer, who worked for Ford for more than 30 years, also marvels at Mulally's leadership traits: his decisiveness, creativity and charisma among them.

"Most importantly, he is a collaborator," Geyer tells IndustryWeek. In his book, Geyer notes that Mulally "considers all of his 16 direct reports indispensible."

Ford is coming off its seventh consecutive quarter of posting a pre-tax operating profit, and the automaker in early June said it expects its worldwide sales to jump 50% by the middle of the decade.

Still, Geyer says he has taken some heat from the automotive press for pinning so much of Ford's success on Mulally. But he stands by his assertion that Mulally has been the driving force for Ford's turnaround.

"Here's a man who knew nothing about the auto industry ... coming into a new industry and with virtually the same team that his predecessor had, and he changed the culture and established Ford as one of the more dynamic companies in the world," says Geyer, who speaks with a thick German accent.

"There has to be something behind it, and in my opinion, it is this man called Mulally."

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