The 3 Simple Steps That Saved Ford

What Mulally pulled off at Ford is a good reminder that keeping things simple and well-focused is clearly the secret to success.

Ford

In 2006, Ford Motor Company was in a dreadful shape. Its stock price had fallen 50% in just two years and the company was on its way to losing $17 billion that year. Fortunately, the CEO, William Clay ‘Bill’ Ford realised his inability to turn things around and hired Alan Mulally who had spent over thirty years working for Boeing in the commercial aviation area. Analysts scratched their heads; how was a non-car guy ever going to save Ford?

Mulally retired in May, 2014 and after his eight year stint at Ford the company could hardly be in better shape; Ford reported 2013 profits of $7,2 billion, up from $5,7billion of 2012. In a recent interview he outlined the three basic steps he applied in tackling Ford’s problems:

1. Vision Statement

Realising that Ford was full of fiefdoms that were fighting among themselves and that Ford cars had regional designs that wasted huge amounts of money, Mulally instituted the vision of ‘people working together as a lean global enterprise for automotive leadership.’

2. Strategies

Given that vision, the following two strategies were developed and broken down into specific goals:

  • Consolidate and Globalise the Product Offerings: Mulally quickly sold off Aston Martin, Land Rover, Jaguar, and Volvo, which were major distractions to the company. Then he developed the plans for global models as opposed to the regional variations that were driving up cost and complexity and causing a lot of in-fighting.
  • Operate as ‘One Team’: That team consisted of the heads of the product lines and the functional leaders. This team met weekly in a massive room at Ford headquarters filled with hundreds of colour-coded charts showing goals and progress. In those sessions, the charts were reviewed and Mulally focused on team building. For example, one behaviour Mulally encouraged and rewarded was individuals coming forward and asking for help from other team members in areas where they were having problems.

3. Accountability

For each goal, a specific individual was named as responsible. Each goal had specific measures that would make it clear whether progress was being made and the goal had been achieved.

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