University of California
Type of paper: Thesis/Dissertation Chapter
Successful leader: Alan Mulally
Allan Mulally has been CEO and president of Ford Motor Co. since September, 2006. Before he joined Ford, Mulally served as a president and CEO of Boeing Commercial Airplanes from September 1998 to September 2006. He holds a bachelor’s and Masters of Science degrees in Aeronautical and Astronautical Engineering. Also, he earned a Master’s in Management from the Massachusetts Institute of Technology. Alan Mulally is an inspired leader that holds wisdom to become a successful leader. He turned Ford Motor Co. from an almost bankruptcy company to a profitable company. Microsoft Co. wants to swift Mulally away Ford, but Mulally make a right choice to stay where an successful leader should be.
In the 103 years of being an automobile maker, Ford Motor Company faced it biggest financial crisis in 2006, with roughly $12.7 billion of annual loss. On the verge of bankruptcy, Chairman William Clay Ford Jr. chooses Alan Mulally to be the company new CEO in hope that his leader skill will somewhat save the company. Alan Mulally did not have any experience with automobile before the job offer at Ford. Surprisingly to everyone in the industry, Mulally not only help turn Ford around, but stay on top due his expertise and leadership skills.
Taking a risk: Change
When Mulally first started out, he did hit some obstacles. Ford was still having financial trouble even before and after Mulally taken over. In 2008, the company loses $14.8 billion, more than back in 2006. Ford was in need of help, when the company decided to joined with Chrysler and GM to testify in front of Congress about the collapse prediction of American auto industry. The “Big” three company was hoping government could assist to keep the auto industry from folding. After appearing in front of congress, Mulally decide Ford would go at it alone, without the help of the government. Mulally take huge risk, overcome many obstacle in order to put Ford back in the fast lane. With his “no-fail” attitude, he instills that attitude in his people, because he knew for sure that Ford would make a comeback. Mulally also make big change in the product line, because he realized that “it not about the car or truck consumers bought, but the technology inside them”(Alan Mulally). This was the reason he changed the Ford vehicle inside and out.
Internal environment changes
According to Mulally “we were going to be world-class, we needed to pull together and leverage and use our assets around the world to create a power house – One Ford, One team”. In order to become one team, the internal of the company has to be strong. To do this, Mulally “forced” everyone in the company to be on the same team, by having his weekly meeting a safe environment where data could be share without executives eying each other for advantages. He encourages leaders, managers to be honest when they need help and not try to hide the mistakes. Mulally also makes sure that the executives attended the weekly meeting bring a comprehensive updated on the progress their department was making. Thanks to this weekly meeting the company discrepancy in the data were exposed. Mulally realized that in addition to the plain Ford there also Ford of Europe and Ford of Asia, with little coordinated or cooperation between any of them, he decided to merge all Ford together to make a global enterprise. Then instead of the many plan Ford used to come up with every years, Mulally only has one, that he stick and hammer, helped pull the company out of the slump together not individually.
Mulally’s strategic to renovates the company
The 7 practices are as followed: (1) communicate an inspiring vision this help unites Ford people to share a vision and focus on a cause that greater than one self, Mulally values team players, that why he would use phase like “One Ford, One team, the power of team, and working together always work”. That why (2) makes your values know is a common phase used to express how Mulally expect people to go about making the progressed toward the vision. Mulally walk his talk, which means that he does not just all talk, he also sets examples. He is doing the thing he said, he coach people in meeting rather than being a dictator. He (3) lives it up to his promise. (4) Think win-win is the approach, Mulally employ in thinking of other individual and organization instead of competitor. This helped him in his relation with United Auto Worker to make certain changes necessary for Ford. Since Mulally want everyone to work together for the company, and not as individual. It’s important to (5) get everyone on the same page; by encourage communication between department in an honest dialogue environment.
As Ford wasn’t doing so good, many people is worry that they can’t do it. This is why Mulally encourages the (6) take a positive can do attitude in his practice; where he lead with positive comment rather than criticism. Mulally last practice is (7) be resulted oriented because task excellence and results are important to him. Mulally followed a set of metrics to assess progress and result. In Ford case, consistent positive result help build greater unity among the company. The 7 practice is part of what help save the iconic brand, with the helped of a great leadership like Mulally Ford once again live down the hardship, and stay on top of the automobile world. Over the past 30 years Ford has earned close to $30 billion dollar, Ford stock once sold for $1.96 dollar in 2009; now goes for $12 dollar a share today.
External environment changes with car model and customer.
Before Mulally arrived at Ford, ford oversea subsidiaries were have their own freedom of design and version of the car, which have the same name, example the compact Ford Focus. Even the cars had the same name and same goals, but there are no common component parts of the car. The car was designed based on the market segment of those individual subsidiaries. Soon after discover the weakness; Mulally decide to change the company into one whole. He decided that every car that make in Ford name has be to from the same global platform, and must have 80 percent common parts. This strategy generates a huge economic scale for Ford Motor Company. Mulally didn’t keep this strategy for himself but he share with the whole industry. There is more than few car companies’ start to duplicate the global platform production like Ford. Ford is trying to build more car with gas efficiency due to consumer demand and gas price rising. Mulally understand the market needs and wants for the better car that can perform and healthy for the environment at the same time. The consumer responds well to the new model Eco Boost engine. All the stockholders enjoy the increase dividend since Ford has a big turnaround. Ford Motor Company’s stock price is also rising due to the good change inside and out of the company.
Can Ford stay at the top always?
Through all this Mulally has made his stand in the automobile industry, from being an outsider to working miracle in making Ford stand on top once again. He shares his expertise and leadership skill with all the people he works with so that everyone can improve in job performing. He understood the important changing culture and how to do it in the right way so that it can motivate the employee and encourage them to be more efficiency. Now, every employee at Ford understands what team work is, and how to cooperate in teamwork. The future of Ford is bight and promising. Mulally decided to stay at Ford and decline the offer from Microsoft company. It’s more than enough to tell that Ford Motor Company is the place for a successful leader.
ged-fords-culture/ http://www.businessweek.com/stories/2009-03-04/alan-mulally-the-outsider-at-ford http://www.mckinsey.com/insights/strategy/leading_in_the_21st_century_an_interview_with_fords_alan_mulally http://www.fastcocreate.com/1680075/saving-an-iconic-brand-five-ways-alan-mulally-changed-ford-s-culture