Alan Mulally On Creating a Motivated Organizational Culture 

At a recent Vistage Executive Summit, I had the tremendous fortune of seeing Alan Mulally speak. He is well-known for having turned Ford around, from a company that made average cars across a variety of brands, such as Land Rover, Aston Martin, Volvo Mazda and others, to a single-brand focused company that made high quality cars that people wanted to buy again. It was a plan he called “One Ford”. Some of these stories related below are also told in his book, “An American Icon”, in which he tells many stories about creating great organizational culture.

 

Alan’s leadership style is one that is focused on people. Would you be surprised that Alan was trained as a rocket scientist and his first job at Boeing was as an engineer? Alan is known for focusing on people over process, recognizing that teams working well together could accomplish far more than individuals working separately. Many people in the audience at this event commented that Alan is the kind of leader they would love to follow, based purely on seeing him speak for an hour. That is a reflection of just how engaging and inspirational he was. Just to further hammer that point home, the audience for this event was mostly CEOs.

 

It was clear from day one that the biggest change that Ford needed was a change in the organizational culture. That change needed to start at the top. Alan brought his playbook how to create skilled and motivated teams. The first play in his book is called “People First”.

 

Alan spoke proudly of turning Ford around. The business press loves to cite the numbers that show how successfully he was: massive profits, , regaining market share, new car sales, etc.
Alan Mulally on organizational culture

Source: Wall Street Journal

 

Alan spoke proudly of these numbers, but, he also felt strongly about employee’s reaction to the turnaround. When summarizing his thoughts about the Ford turnaround, he said:

“One of the most important metrics was how our people felt about the company”

 

Alan recalled one his first leadership team meetings. His team would come in with status reports. Major goals, all color-coded red, yellow or green, depending on the status of each project. At the meeting, most people came in with their projects all green. However, since everyone at the table knew that Ford was going to lose money that year, there is no way that everyone’s goals was green.

 

One leader had a few reds marked on his status report. So Alan asked this person to come sit next to him. The person assumed they were being brought next to Alan so he could fire him. They talked about the challenges and obstacles he faced. Alan didn’t fire him. Instead, they, together, looked for solutions.

 

Over the next few weeks, more and more of the leadership team changed their colors to yellows and reds. They identified the real challenges in the business. They worked together to find solutions. They stopped hiding problems. The culture started to shift. At the foundation of this cultural shift, Mulally built a safe environment in which his team could work and thrive. Alan’s comment:

 

“If you only ask your team to bring you solutions to problems, you end up with secret problems”

 

While researching this blog post, I found many people attributed Alan’s success in turning Ford around was his emphasis on making Ford data-driven. “The data will set you free” was one of Alan’s favorite quotes. Data was certainly one of the most important instruments he used to manage his teams, for which he made sure everyone knew the company plan, status and areas that needed special attention. Contrary to the above, in his presentation that I attended, Alan spent the entire time talking about teams and people.

 

At the end of the talk, Alan left plenty of time for Q&A. One question from the audience was: “What one or two things kept you up at night?”

 

Alan’s response was classic: “If you let it happen, anything can keep you up at night. You need to manage your energy. Your job as a CEO requires you to get some sleep. So, get some sleep.”

 

Takeaways from Alan Mulally’s speech

  1. People first – People will drive the success of your business and set the foundation for your organizational culture. You need to find out how your people are doing
  2. Safe culture – Create a safe organizational culture where people can bring their problems so you can solve them together
  3. Get some sleep!

The man who was the first to bring problems to Mulally? Mark Fields. Mark now runs Ford.

 

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