To the skeptics who wondered whether an “airplane guy” from Boeing had the knowledge and wherewithal to lead Ford Motor Co. out of one of the darkest periods in its history, Alan Mulally delivered a convincing response.
“The average automobile has around 10,000 parts. They're very, very sophisticated,” Mulally said shortly after he was introduced as Ford’s president/CEO in 2006. “I might point out that the [Boeing] 777 has four million parts—and has to stay in the air.”
An aerospace engineer by trade, Mulally understands the beauty and power of the design, construction, and distribution details involved in creating both of these intricate modes of transportation.
But perhaps his strongest trait as a leader has been a knack for simplifying that sophistication—defining the core principles and products on which to focus and creating a collaborative, problem-solving culture in which everyone in the organization is, and feels, invested.
Mulally, 69, will address these themes at the America's Credit Union/World Credit Union Conference this month in Denver through the lens of his experience guiding strategic operations at two iconic, global companies.
“The thing I’ve found over the years—37 at Boeing and eight at Ford—is the absolute importance of three universal principles: a compelling vision, a comprehensive strategy, and a relentless implementation process to deliver that strategy and vision,” Mulally told Credit Union Magazine.
Ford was on the ropes when Mulally arrived from Boeing, where he had served as president/CEO of its commercial airplanes business. Ford was about to post annual losses of $12.7 billion, and its reputation had sagged due to dilution of the Ford brand, decreasing demand for its products, and an uncompetitive cost structure.
Through a series of chess moves, Mulally put Ford back on firm footing. The company sold off luxury brands such as Jaguar and Volvo, renegotiated its contract with the United Auto Workers, and committed to creating a complete family of small, medium, and large cars and trucks with the very best-in-class quality, fuel efficiency, safety, connectivity, and value.
In what was viewed as a gamble at the time, Mulally demonstrated great foresight just months into the job by mortgaging the company to obtain $23.6 billion in private credit. That maneuver enabled Ford to restructure its business to operate profitably, invest in the new products consumers wanted and valued, and stay afloat during the Great Recession without taking government aid—whereas General Motors and Chrysler did receive add.
Of Ford's accomplishments during his tenure as president and CEO, which ended in July 2014, three stand out for Mulally.
“First, we saved the company. And we didn’t take precious taxpayer money—we did it the right way,” he said. “We created a successful, profitable, growing, expanding company that is going to provide a lot of value for a lot of people going forward.
“Second, we created the best vehicles in the world—the safest, the highest quality, the best fuel efficiency, the lowest carbon emissions—and connected them seamlessly to the Internet. To be able to do that with so many talented people, and provide so many jobs, so many great careers.
“Third, we're contributing to the big issues we all care about. Ford is a major contributor to economic development, to energy independence and security, and environmental sustainability worldwide.”
Mulally’s business plan review (BPR) meetings served as the foundation of Ford’s well-documented turnaround. During these two-and-a-half hour sessions, held every Thursday at 7 a.m., Ford harnessed the collective power of its global stakeholders, which included the employees, consumers, Ford store owners, suppliers, investors, consumers, and unions.
At the BPR meetings, which continue under new Ford CEO Mark Fields, global business and functional skill team leaders present color-coded progress updates. Green indicates projects remain on target, yellow signals potential problems, and red illustrates major concerns.
Bringing these issues to the table allows peers who have experienced similar issues to offer advice on potential solutions. Guarded rivals quickly transform into partners.
“Collaboration is absolutely the key. That unleashes all the creativity required to solve the issues,” Mulally said. “And the accountability is tremendous, because you’re all doing it as a team. You’ll do whatever it takes to help each other change the reds to yellows to green because we're all in it together.
“Airplanes and cars are so sophisticated,” he continued. “When you’re creating them, sometimes things will go well, sometimes not so well—just as every business has its ups and downs. The whole idea is to have a management system that deals with reality and takes decisive action to accomplish your plan of creating these great products and companies.”
Mulally’s passion for dreaming big was fueled by President John F. Kennedy’s challenge to send a man to the moon, and he came to view transportation devices as more than just a functional tool.
“I’ve always wanted to contribute to important things for the people of our world,” Mulally said. “I’ve had a chance to travel the world, and I found my first love in airplanes.
"One of the reasons they’re fantastic, besides being a technical marvel, is that they connect people around the world. If you can get people together, we always find out that we have more in common than we are different. And then we choose to work together for the good of all of us.
"I found my second passion in automobiles. So my real passion is to move people around safely and efficiently," Mulally added. "I love helping thousands of talented people come together and work together to deliver important contributions."
Mulally has turned his attention toward 21st-century innovators. He joined Google’s board of directors last summer, and in June he became the first independent director at Carbon3D.
The three-dimensional printing firm recently introduced a process that forms objects from a pool of resin rather than printing them layer-by-layer, which promises to advance 3-D printing capabilities from prototyping to manufacturing.
What innovations does Mulally foresee leading the charge in coming years?
“Based on the technology of computing and sensors, and miniaturization of hardware and the software, we’re going to see the connected world accelerate,” he said. “Digitization is going to continue to change all of our lives. It’s going to provide great products and services, and dramatically improve quality and productivity. It’s going to touch every aspect of our lives.”