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Retired Ford chief Alan Mulally on automaker’s dark days and new future

How the MIT Sloan alumnus revived the struggling company during the recession

November 18, 2015

Alan Mulally, SF '82

Alan Mulally, SF ’82, at Wong Auditorium Nov. 17

One of the biggest leadership challenges is “going from ‘I’ to ‘we’,” said retired Ford Motor Co. president and CEO Alan Mulally, SF ’82, in a Nov. 17 talk with students at MIT Sloan.

Mulally learned this lesson early in his career as a young airplane engineer, and it buoyed him as he steered Ford through the recession. He led the company from 2006 to 2014, taking it from historic losses in 2006 to profitable years beginning in 2009. When the automotive industry crisis hit, Ford was the only company in the Detroit Three not to receive a government bailout.

On selfless leadership

Mulally began his career as an engineer at Boeing Co., where he developed a leadership style known for inclusivity—though he learned this the hard way.

“Things were going great, and Boeing asked me to be a supervisor,” he told students. “I had an employee to supervise, and I thought my job was to teach him to be just like me. I gave him 14 iterations on technical work, and on the fourteenth one, he said, ‘I’m quitting the company because of you. You’re a great person, and you’ll make a good leader someday, but you should think about what your real job is. Maybe the company is asking you to tell me the strategy, not how to be a carbon copy.’”

“Thank God this happened with my very first employee,” he said. “Since then I’ve gone from “I’ to ‘we.’ Trust me, you’ll learn this lesson.”

On the importance of candor

Mulally was known for this progressive management style at Ford, where he focused on streamlining Ford’s operations around the world with candid, town-meeting style roundtables with employees across the globe.

“The most destructive management style is to hide problems,” he said.

Mulally urged Ford employees to share positive news with green coded charts and trouble spots with red. Some colleagues were extremely hesitant to share “red” issues.

“People were scared,” he said. “Then, one week, [vice president] Mark Fields presented a red chart. People were looking away. They were scared for him. I started to clap. One person offered to help him with his problem, and another chimed in. Solved. The next week, charts began to look like a rainbow.” Today, Fields is president and CEO of Ford.

On brand awareness

In addition to supporting a transparent culture, Mulally restored Ford to its historic prominence by concentrating on its original brand instead of a vast portfolio.

“Ford had become a complicated house of brands,” he told students. “It had really become a house of Aston Martin or Volvo. Over time there was no synergy between all these Fords and no synergy in competing with global competitors with all of these different departments, all over the world.”

The company sold Land Rover, Aston Martin, and Volvo to concentrate on Ford alone.

“We’d lost track of the blue oval,” Mulally said. “Brand clarity, brand promise is the most important thing: We were going to focus on Ford and on making every vehicle best in class.”

On Ford’s road ahead

Mulally believes he helped restore Henry Ford’s vision of a “highway accessible for everyone, everywhere” with an array of products at various prices.

“Now, people who know cars believe we have the finest in the world,” he said. “Ford store owners are in the best position they’ve ever been. And 89 percent of employees believe in the company as more than just a job.”

In his beleaguered home city of Detroit—where population has plummeted to around 600,000 from nearly two million in 1950—Ford has added jobs, employing 44,000 people in the area in 2015, up 16 percent from 2010.

The momentum continues overseas.

“Ford is the fastest-growing brand in the Asia-Pacific, Russia, and China, and we’re harnessing all of our capabilities in production all around the world,” Mulally said. “We’re accelerating Ford’s original vision of creating careers all around the world.”