Alan Mulally: working together helped save Ford

Credited with saving Ford from bankruptcy and government bailout, Alan Mulally is recognised as one of the industry’s most innovative leaders. At the World Credit Union Conference in Denver,...

Credited with saving Ford from bankruptcy and government bailout, Alan Mulally is recognised as one of the industry’s most innovative leaders. At the World Credit Union Conference in Denver, he told delegates how, by working together and co-operating, Ford staff and management transformed the business into the leading automotive brand in the United States.

As the organisation’s former president and chief executive, Mr Mulally played a key role in the implementation of the One Ford plan, which focused on serving customers in all markets with a full range of vehicles with leading quality, fuel efficiency, safety, smart design and value. Prior to joining Ford, he had been the executive vice president of the Boeing Company and president and chief executive of Boeing Commercial Airlines.

In 2008 he testified in Washington before the US Senate Banking Committee on behalf of Ford’s competitors – GM and Chrysler. He explained that he did so because he believed saving them was the right thing to do, knowing that their failure would impact on the whole automotive industry and the USA’s GDP.

When he joined Ford in 2006, he came with a new vision of sharing ideas and encouraging staff members to speak about the issues faced.

His lack of experience in the sector meant that industry experts who said he was not “a car guy” greeted him with scepticism. Asked what he would bring to the business, he said: “The average car has ten thousand parts, and issues like quality and safety need to be taken into account. An airplane has four million parts and stays in the air.

“The whole idea is to create a safe and efficient airplane. Everybody needs to know and work together, listen to each other, appreciate each other. Working together is so important worldwide to create these services.”

He thought he would stay at Boeing forever, but when he got a call from Bill Ford, the great grandson of founder Henry Ford, Mr Mulally decided to help revamp the company, which he saw as one of the country’s greatest brands.

“I was asked to serve an American icon that provided so many jobs for so many people around the world,” he said. Ford had focused on large vehicles and didn’t have small vehicles that they wanted as the world’s economy was slowing down. At the time Ford was losing money on every brand and vehicle.

“The vision of the founder of Ford was to create products in every country where they sold the vehicles. We were competing with so many brands and had so many different models.

“What I brought to Ford was the idea of working together, everybody working together to create this one Ford. The management philosophy at the time was to only show problems if you had a solution – so nobody knew anything.”

He encouraged staff to talk about the problems they faced and work on solutions together. He suggested colour coding charts depending on the problem: red for serious problems, yellow for minor issues and green for no problems. Changing the management culture took time, but employees eventually started to share problems.

“The idea was to trust each other, identify issues and work together to turn red into yellow and green, and to remove fear and intimidation from management. We wanted the hearts and minds of everybody to get the business going.”

After that Ford started growing profitable, paid back its loans, reinstated dividends, and became the number one automotive brand in the USA – as well as in many European countries. It also became the fastest-growing automotive brand in the Asia-Pacific region, with a complete family of cars.

Today, 87% of employees think Ford is going in the right direction, as opposed to 55% when he took over.

“You guys have a great vision, including everybody knowing everything,” Mr Mulally told credit union representatives in Denver. “That’s what you are about, and you can to create a lot of value for a lot of people from around the world.”

He also told them about being a credit union member of BECU, a credit union originally established to serve employees of the Boeing Company.

“I’ve seen a lot of financial institutions over the years, but I will never forget having a partner absolutely committed to my success. I loved supporting them. What credit unions do […] is so compelling, I’ll be pulling for you every step of the way.”

Mr Mulally added: “Credit unions are the perfect example of working together, their mission is to help people gain access to finance. We just need to keep showing everybody that this is the right way to do it and follow principles.”

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