The Power of a Compelling Vision
The book detailing the Ford Motor Co.’s remarkable turnaround under Alan Mulally is titled “American Icon.” Maybe that’s because “All the Right Moves” was already taken.
During his eight-year tenure as CEO before retiring in 2014, Mulally turned the books from Thunderbird red to Model T black, largely by transforming the culture and inspiring employees with his vision for a return to excellence.
He saw a company that had become regionalized, hampering its scalability—so Ford sold off luxury brands Aston Martin, Jaguar, Land Rover, and Volvo, and reduced Ford’s stake in Mazda.
He recognized a company content with being a fast follower on technology—so he stressed a commitment to being best in class on fuel economy, quality, safety, and design.
His “win-win” negotiating style paved the way for a deal with the United Auto Workers that kept manufacturing in the U.S.—at reduced but still healthy wages that allowed Ford to be profitable.
And he harnessed the collective power of his global leadership team through a candid “status check” meeting every Thursday at 7 a.m. called the business plan review (BPR). There, division leaders present color-coded progress updates: green means projects remain on target, yellow signals risk, and red illustrates major concerns.
BPRs altered the fundamental tendencies of these power brokers, turning them from guarded rivals into collaborators who navigate each other’s roadblocks. Mulally’s successor, Mark Fields, continued the practice— a testament to the meetings’ impact.
“I’m more convinced than ever, after doing this for 45 years, in the power of a compelling vision, a comprehensive strategy, and a management system where you manage the implementation of that strategy relentlessly,” Mulally, now on Google’s board of directors, told Bloomberg last year. “I think that works in for-profit, nonprofit [sectors]—any organization that is trying to deliver something really important.”
Frugality Mixes Well With Agility
The association of frugality with agility is very strong, says Navi Radjou, co-author of “Frugal Innovation.”
“Agility means you save on time, and time is your most valuable resource,” he says. “That’s why we think being frugal is not only about saving money, it’s saving on time.”
Large organizations understand they have to be nimble, but their structure doesn’t allow them to help the micro-entrepreneur. “The heart is in the right place, but the body is not responsive,” Radjou says.
Being small is an advantage for credit unions. “They can operate with more agility, but more important, their size allows them to have more empathy with the micro-entrepreneurs.”
Keeping lending local and community- based means if you lend to someone and bump into him or her at the coffee shop or grocery store, you can’t run away, Radjou says. The relationship has a certain empathy, more accountability, trust, and familiarity.
The more distance between the business and the customer, the less trust there is. This leads to standards such as higher interest rates as a way to “de-risk” the relationship—or the lack thereof. “The smaller you are, the closer you can get to the next generation of innovators and job creators—the job makers, not the job takers,” he says.
Embrace Being Scared
Disrupt or be disrupted. That’s the new axiom in business.
Today’s companies need to generate a steady stream of bold new ideas or risk going out of business, Luke Williams says in his TED Talk, “Ideas are the Recipes.”
“You have to embrace being scared,” Williams says about innovation. “You don’t know where an idea is going to go. You don’t know what the answers are going to be.”
Williams advises companies to avoid:
• Incremental ideas. Ideas that support your current business model are the most comfortable, but only further narrow your future path. “Sooner or later you will reach the end of that path,” Williams says.
• Waiting. If you wait until you are backed into a corner by environmental changes or a new competitor, it’s too late. Don’t ignore new ideas just because the market hasn’t caught up to them yet.
“It’s not about technology; it’s about how you think,” Williams says. “It’s not about how to spot and react to new products and technologies coming out in the market and trying to decide what to do; the real challenge is to work out how you can be the disruptive change.”
Mulally, Radjou, and Williams will deliver keynote addresses during the joint America’s Credit Union Conference/World Credit Union Conference, July 12-15 in Denver. For information, visit CUinDenver2015.org.