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The Key to Ford Motor Company's Revival : Alan Mulally

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Arianna Briske

on 28 November 2016

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Transcript of The Key to Ford Motor Company's Revival : Alan Mulally

Alan Roger Mulally
Born August 4, 1945
Attended University of Kansas
Received a BS and MS in aeronautical and astronautical engineering
Also attended MIT's Sloan School of Management
Received a Masters in Management



American Icon: Alan Mulally and the Fight to Save Ford Motor Company By Bryce G. Hoffman

Career with Boeing
1969 - hired immediately after graduation as an engineer for Boeing. He held numerous project management positions, contributing to multiple airplane designs. Most notable contribution was his lead in the cockpit design of the 757 / 767. This design encompassed many new aspects, such as the first all digital flight deck for a commercial aircraft.
Career with Boeing
1998 - became President of Boeing Commercial Airplanes

2001 - Chief Executive Officer duties were added

2006 - named as person of the year by Aviation Week & Space Technology
Career with
Ford Motor Company
Alan Mulally is well known for getting Ford through the automotive crisis without taking a government bailout.

2009 - included in the Time 100 list

2011 - named Person of the Year by the Financial Times ArcelorMittal Boldness in Business Awards

2011 - named CEO of the Year by Chief Executive magazine

2012 - awarded an honorary degree of Doctor of Science by the University of Kansas for his notable contributions to engineering and the transportation industry

Ford Motor Company

2006 was a pivotal year for Ford and their then CEO and President, Bill Ford.

In previous years, Bill had made significant progress in the revival of Ford. He refocused the company on building and selling cars / trucks and was the first American automaker to introduce a hybrid vehicle.

Bill's successes were met with further adversity and he acknowledge the need for him to step down and be replaced. Bill met with a few others before setting sites on Mulally.

The Key to Ford Motor Company's Revival :
Alan Mulally

Thank you!
Career with Boeing
1992 - became Vice President and General Manager of the 777 program.

1994 - became Senior Vice President of Airplane Development

1997 - became President of the Tomlin, Space & Defense Systems and Senior Vice President.
Adversities Faced at Boeing
September 11th terrorist attacks shocked the aviation world. Production of jets dropped nearly in half and over 20,000 jobs were lost.

"None of us ever thought commercial airplanes would be used as a weapon. It was devastating,” Mulally

The slow down was so dramatic that the only way to survive was to cut costs by 50% - the cuts were hard on a human level but the company culture Mulally instilled lead everyone left to join forces to save Boeing.

These tough choices allowed Boeing to unveil a new airplane in 2003, the 787 Dreamliner.
"I know whats wrong." he said. "Help me find a solution." Ford asked the other directors to help him find a new CEO. "This company means a lot to me. I have a lot tied up in it." Ford said. "But the one thing I don't is my ego."

Bill Ford
Adversities Faced at Ford
When first hired Mulally was faced with jealousy from other executives who were up for his position. They were upset and hesitant about an outside executive taking over.

He responded to their uncertainties with confidence in his abilities.

"The average car has thousands of different parts and they all have to work together flawlessly." "That's really interesting," Mulally replied with a smile. "The average passenger jet has four million parts, and if just one of them fails, the whole thing can fall out of the sky. So I feel pretty comfortable with this."

Career with
Ford Motor Company
2006 - became President and CEO of Ford Motor company.

Mulally initially declined the offer, stating he would stay with Boeing because there was an airplane he still wanted to build.

Joe Laymon can be credited with changing Mulally's mind. He spoke in terms of what Ford could do for Alan, rather than what Ford needed him for - a tactic similarly described by Dale Carnegie in How to Win Friends and Influence People.

"I'm not here to change your mind," Laymon told him as they sat down. "I'm just here to help you with your conversation."

Adversities Faced at Ford
Adversities Faced at Ford
Mulally quickly recognized there was a lack of transparency and truth at Ford. For example, data such as estimated demand was inflated and given to suppliers in hopes of receiving lower pricing. This was not his management style.

Upon realization, Mulally instated his "business plan review" (BPR). This was a meeting with senior executive, every week on the same day and same time. Each is required to report progress. Any further debate on a subject was to be followed up immediately after at a "special attention review" (SAR). These meetings were intended to instill transparency and keep communication open throughout. Mulally pushed for honest, correct information at these meetings - even if it was bad news it was an accurate look at the progress.

Employees were also uncertain about their new President. In his last position he was involved in cutting thousands of jobs. Mulally was honest about his time at Boeing, explaining that sometimes job cuts are the only way to save a company. Employees realized he was there to revive Ford, like he did at Boeing. When asked if he would bring in his own executive team, he said "my team is right here."

Mulally further instilled team work by being open and accessible to all employees. He was known to stop by and sit in on meetings for a little while - entering the room with hand shakes and shoulder squeezes. His willingness to listen was effective at motivating employees for their top performance.
Adversities faced at Ford
Ford needed simplification all around. Their vehicle offerings needed streamlined, their global lineup needed reducing and their organization chart needed restructuring.

Mulally insisted on a full family of vehicles - cars, crossovers and trucks. He explained this was the best way to combat fluctuating fuel prices and changing consumer preferences. He eventually reintroduced the Ford Taurus.

Mulally created an org chart with with business units and functional areas. He created four units : asia pacific, european, americas group and Ford credit. This streamlining brought divisions together, further enforcing Mulally's team work style.
What we can learn from Alan Mulally
Mulally is the prime example of a servant leader. Even as President and CEO he walks the same halls as his employees. He sits in on the same meetings as his employees. He views everyone as an essential part of the team and wants to hear all opinions, good or bad. Mulally wasn't preferential when it came to corporate status. He once offered the promise to cut his salary to $1 a year if Ford took a government bailout. Well that never happened and his salary wasn't cut - but the promise showed he wasn't in it for the pay, he wanted to win this fight as much as anyone else. He instilled a fighting drive in everyone to reach financial stability.
"What I have learned is the power of a compelling vision."
Alan Mulally
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