How Alan Mulally Saved Ford

COLUMN: Ford Motor Company Gets the Freedom Award

  on June 28 2011 9:44 AM
Ford Motor Company CEO Alan Mulally
Ford Motor is searching for CEO Alan Mulally's replacement, according to a report. Mulally is expected to retire within two years. Reuters

Approaching the Fourth of July, America's national celebration of freedom, I thought of what company best embodies that spirit this year.

The Freedom Award is not given lightly, since independence is perhaps the greatest quality of life we can enjoy as humans, and Americans. But this year, one company stands above others as the clear winner, the corporation that best speaks to America's free spirit and quest to keep it that way.

I've followed Ford Motor Company closely since 2003, when I began writing a book published by Wiley titled Ford Tough: Bill Ford and the Battle to Rebuild America's Automaker.

Let me be truthful: I took a hit or a few over the years since that book came out in 2004 from people who said Ford was dead and gone and there was no such thing as a battle to rebuild America's automaker. They suggested Bill Ford, then the company chairman and CEO, had no chance at getting the company back on track.

But I got to know Bill Ford Jr. a little bit, and the key people around him involved with trying to tackle the herculean task of reshaping Ford, a company all but broke with little in the way of obvious hope at hand in terms of product and financial resources, and I saw and wrote about something different.

It was clear to me from the start that Bill Ford would not remain the company's CEO for long. That's what made him a good leader. He knew a strong operations CEO was needed, and he was determined to find one. The great-grandson of Henry Ford, he envisioned being chairman, not CEO, a sort of broad-vision steward of the company, and his family's, legacy. I knew he had looked into getting Nissan's Carlos Ghosn as Ford's CEO, but that didn't work out for either party. Still, they share mutual respect.

I also knew he would not fear hiring someone from outside of Detroit's hubris-laced automotive executive ranks to lead Ford.

So it appeared to me he had a good chance of saving Ford.

Enter Alan Mulally, hired as Ford's CEO in 2006 and the rest is history, of course. The company has earned more than $9 billion in profits the past two years, and is gaining market share while bringing exciting product to market that customers like and want.

But it wasn't that simple. Even Mulally faced his share of doubters from the start.

Hired from Boeing as an engineer by training who emerged as a company vice president before Ford gave him the opportunity, Mulally arrived as an affable, approachable, positive and energetic source. Behind the scenes, he looked company leaders in the eye, demanding they talk to him about realities, however uncomfortable they may be, and work at solving those realities, however painful it may be.

The culture resisted in fits and starts in the beginning. All the while, Mulally brought operational energy and can-do vision to the forefront, saying phrases repeatedly like how he was going to send Ford flying.

Nobody had the heart to tell him Ford was not Boeing, an airplane manufacturer.

I got the chance to know Mulally through regular correspondence after he read some of my leadership books, including Ford Tough, The John Deere Way, How Toyota Became #1 and Turnaround: How Carlos Ghosn Rescued Nissan. An avid reader, Mulally enjoys studying industry and leadership and he sent me some handwritten notes on the books, pointing to cues he would implement at Ford.

We began to trade exchanges periodically over leadership, and how the effort to turn Ford around was going. At times, it was tough. The company was product-bare and it had little in development in the pipeline. When buyouts were offered to white collar employees several years back many took them eagerly, suggesting if they tried to stick it out they would probably fall to ruin with the company.

The story is well known from that point, about how Mulally and the company's board of directors, with the blessing of Bill Ford and the Ford family, bet the entire corporation, down to it's trademark Blue Oval logo, for a loan of more than $20 billion for the task for taking the final steps in remaking Ford into a profitable and viable automaker.

Focusing on key elements required for turning around a company including cost-cutting, product design, lean operations, and one synergistic vision, Mulally shed distractions like Volvo and Jaguar, and preached the passion of One Ford to everybody who would listen. Those inside the company that didn't listen found themselves another job.

For, despite Mulally's affability, it was one way or the highway.

Many believed, however, and they are now getting the job done for all to see and experience. Ford did not file bankruptcy, and the company did not take government bailout assistance. Ford Motor Company did it the old-fashioned way - the American way. By leveraging the company's future and working hard to get the job done, Ford gets the Freedom Award this Fourth of July holiday, representing lessons we can all learn and take into the future.

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