(Photo by Ryan Kern/2015 WCUC)
With Ford Motor Co. months away from posting a $17 billion loss, many skeptics questioned whether an “airplane guy” was the right choice to take over the struggling auto manufacturer in 2006.
The former president/CEO of Boeing’s commercial airplane business, Alan Mulally was named CEO of Ford in 2006, a role he held until July 2014.
“I think of a credit union like I think of Ford,” Mulally said during a keynote speech at the America’s Credit Union Conference/World Credit Union Conference Monday in Denver. “We’re making all of these great resources available to everyone around the world.”
But to make vehicles available worldwide and pull the company out of its darkest days, a lot had to change.
First, Mulally had to figure out how to address a financial forecast that called for the company to post a $17 billion loss in 2006. At the same time, he had to revamp the company’s business plan to become more profitable and secure funding to make it all happen.
Ford refocused its business plan on providing a complete family of vehicles for the Ford and Lincoln brands while divesting the company of the other brands it owned. Mulally then worked to obtain $23.5 billion in private credit to help finance company operations.
But perhaps the most important move was changing the workplace culture at Ford.
Mulally instituted a weekly business plan review session aimed to increase the trust and transparency in the company. Each week, leaders would give updates on how operations were faring with different vehicle models, a drastic change from previous operations. At first, Mulally said all reports and charts came back with green coloring, indicating no problems present.
But problems did exist, according to company financials. And a Canadian team working on production of the Ford Edge experienced it firsthand, when it had to halt production due to a problem with the rear-end lift gate.
Still, the charts came back green.
Eventually, the Canadian team changed its charts from green to red, indicating a problem and no solution, and Mulally saw his plan began to work. With no prompting, other teams from around the company provided input on similar problems. Slowly the team took in the new information, made changes, and changed its progress chart from red to yellow--and back to green.
It was a turning point for Ford, he said.
“On one hand, everybody around the world knew what was happening,” Mulally said. “On the other hand, we had broken through the culture.”
Since then, Ford has made progress, repaying the initial loans, reinstating its dividend, and producing the most complete family of best in class vehicles, he noted. According to surveys, 87% of employees say the company is heading in right direction, said Mulally, adding the company did it all without obtaining government bailout money.
“Working together really works,” Mulally said. It’s driven by deciding what the vision is, relentlessly implementing the plan and then making sure “everyone knows everything to help turn those reds to yellows to greens.”