American Icon (72 page)

But that is exactly what Mulally did—and he got all of them to help him do it. His disciplined approach cut through the company’s caustic culture and forced everyone to march in the same direction. He was tough when he had to be, but Mulally’s primary means of motivation was a shared vision—a vision of what Ford had been and could be again. He taught the other executives how to make decisions based on data instead of boardroom politics. And once he had, most of the decisions that saved Ford were made by the team as a whole.

“We were not organized for success,” Chief Technical Officer Paul Mascarenas told me. “Alan changed that with One Ford.”

O
ther men and women have taken broken corporations, fixed their flaws, and set them back on the road to success, but few have had as good a time doing it as Mulally. He led Ford through one of the most painful and far-reaching restructurings ever and guided it through the global conflagration that was the Great Recession with the same goofy grin on his face that he had when he walked in the
door. I once asked his media handler, Karen Hampton, if she had ever seen him stressed. She laughed, and told me about the day in 2008 when she had come into Mulally’s office and found him staring out the window, squeezing a stress ball.

“Oh no!” she exclaimed, pointing to the rubber ball. “If you’re stressed, we must be dead!”

Mulally started laughing.

“Don’t worry,” he said. “I hurt my wrist playing tennis.”

Once Mulally came up with his plan, he never doubted it would succeed. From the start, he evinced an almost religious conviction in its four points. It was a belief born of an engineer’s faith in numbers.

“The data says, if you take these actions it’ll work,” Mulally said when asked how he could be so certain, even in the midst of a crisis that was toppling his competitors. “Running a business is a design job. You need a point of view about the future, a really good plan to deliver that future, and then
relentless
implementation.”

Alan Mulally has now saved not one, but two American industrial giants. His success at Boeing alone would have been enough to ensure his place in the annals of American business history. With the turnaround of Ford added to his list of credits, many would rank him among the greatest CEOs ever.

Mulally’s serial success also proves that his unique approach to management—the weekly meetings, devotion to data, and emphasis on working together—is portable. Mulally always believed that. He used the same system to raise his family and run his tennis club. Now he is more certain than ever that the Mulally method is as applicable to small nonprofits as it is to major multinational corporations.

“What I have learned is the power of a compelling vision, a comprehensive strategy, a relentless implementation process, and talented people working together based on those commitments,” he told me during our last interview for this book, in May 2011. “We laid out a plan, and for four and a half years, we have been relentlessly implementing that plan.”

That meant dealing with reality, no matter how harsh it might be. It meant sowing the seeds of future growth even as the company
struggled to make it to tomorrow. And it meant staying the course, no matter how difficult that became.

“You’ve got to trust the process. You need to trust and nurture your emotional resilience,” he said. “Do you have a point of view about the future? Check. Is it still the right vision today? Check. Do you have a comprehensive plan to deliver that? Check. If you get skilled and motivated people working together through this process, you’re going to figure it out. But you’ve got to trust it.”

The leader’s job is to remind people of that vision, make sure they stick to the process, and keep them working together.

“Working together always works. It
always
works,” Mulally stressed. “Everybody has to be on the team. They have to be interdependent with each other.”

A
t Ford, the ultimate interdependency was the one that existed between Mulally and the man whose name was on the side of the building. He and Bill Ford made a great team. Mulally had the business and leadership skills that Ford lacked. Ford understood the history of his company and knew what it needed to do to save itself. But Ford did not spend a lot of time telling Mulally what to do. If his CEO had concerns, he listened to them and handed them back as questions. Most of the time, Mulally was just looking for someone to validate what he already believed. Ford helped him with the board, too, offering advice about when to pitch ideas and how to sell them. And of course, he kept the family out of Mulally’s way.

The Ford family as a whole deserves a great deal of credit for keeping its faith in the company through the biggest crisis in its long history. It was the Fords’ determination not to sell out that kept the board of directors from moving forward with “other options.” Their continuing control of Ford through their supervoting Class B shares is much maligned, but regular investors would have abandoned the company long ago and left it for the bankruptcy attorneys to pick apart. The Fords brought stability and a long-term view that other corporations secretly envied.

“I am very proud of the family and our board. They hung together through an almost impossibly difficult time, where everything that they were picking up and reading every day was worse than the prior day,” Bill Ford told me. “Every indicator was that this company was not going to make it. Our board and our family refused to accept that. They said, ‘If that’s true, we’re going to go down swinging.’ And that was certainly my thinking.”

Bill Ford’s own substantial contributions to the company’s turnaround have often been lost in the glare of the spotlight that shined so brightly on Alan Mulally. If the great-grandson of Henry Ford had not stood up and taken back his company, Jacques Nasser would have surely run it into the ground. And while he could not bring himself to cut deeply enough, Ford began the difficult and painful process of downsizing his company. He also understood the primacy of product. He personally approved many of the cars and crossovers that would become synonymous with Ford’s turnaround, including the Ford Fusion, Edge, and Escape Hybrid. And Bill Ford not only okayed Leclair’s borrowing plan, but also convinced the board and the family to mortgage the entire company to secure those loans. Without his dogged determination to preserve the Ford legacy—not just for his family, but also for Ford’s employees, its shareholders, and the nation as a whole—Ford’s story might have had a very different ending. It was not just Bill Ford’s willingness to step aside and make way for Mulally that helped save the company. It was also his unceasing effort to give him the time, the space, and the resources he needed for his revolution to succeed. Without that, Mulally may well have become just another victim of a company and a culture that seemed impervious to change.

I
once asked a group of Wall Street bankers what they thought the biggest threat to Ford’s future was, now that the company had turned the corner. Was it the ongoing instability of its suppliers, the increasing price pressure in Europe, or the threat of a second Asian invasion from China? Before I could even finish listing all the risks, a guy from BlackRock cut me off.

“The biggest threat to Ford Motor Company is that Alan Mulally steps off the curb tomorrow and gets nailed by a bus,” he said.

“Yep,” the others agreed. “That’s it. They can manage everything else.”

That was at the end of 2009. Concern about the end of Mulally’s tenure at Ford would increase as the months went by. Those concerns became all the more pressing after he turned sixty-five in 2010. By 2011, hardly a press conference went by without someone asking Mulally when he planned to retire.

“I haven’t thought about that at all,” he insisted when reporters pressed him on that point after the company’s annual shareholders meeting in May.

But everyone knew the clock was ticking. Few outside the company saw an obvious successor inside the Glass House, and many industry observers openly doubted whether the changes Mulally made in Dearborn could endure once he had left the building. Many Ford employees shared these concerns. The questions of when Mulally would leave and who would replace him were enough to make any room in Dearborn fall silent.

The ultimate test of Mulally’s revolution will be its ability to endure his absence. Boeing has suffered major setbacks since Mulally left Seattle in 2006. Insiders say that is because his successors have failed to maintain the processes Mulally put in place to guarantee success. When asked if the same thing could happen at Ford, Mulally says simply that he has given Ford the tools it needs to prosper. What the company does with them after he retires is beyond his control. Ford’s history is a long list of stunning successes followed by epic failures, of against-all-odds comebacks that turn into retreats back into mediocrity and mismanagement. But there are important differences this time that augur well for Ford’s future.

Many of Ford’s previous comebacks were based on breakout hits like the Model A, the Mustang, and the Taurus. Mulally’s plan was predicated on a sweeping transformation of Ford’s entire product portfolio. It was also about changing the way the company designed and built its cars and trucks. Henry Ford used mass production to cut costs and boost efficiency, then passed the savings on to consumers.
Mulally and his team globalized product development, shared platforms, and introduced new vehicles that looked better, drove better, and cost less than the ones they replaced.

Ford’s earlier recoveries were driven by strong leaders who too often became the objects of sycophantic devotion and slavish obeisance. These men inevitably became so concerned with preserving their power and positions that they drove away other talented executives or pitted them against one another in order to prevent a worthy successor from rising to the top. A cult of personality certainly developed around Mulally, too. Men and women throughout the company would rise to their feet and cheer when he walked into a room. They would blush when he hugged them in the hall and shyly ask for autographs. They would thank him with quavering voices at town hall meetings for saving the company and their jobs. But for all that, Mulally himself never ceased talking about the team. He constantly thrust forward other executives at press conferences, praising their contributions to Ford’s turnaround and making sure they got a share of the credit for it. Away from the public eye, he was constantly pushing his subordinates to share in the decision-making process and lead their own divisions the same way he led Ford as a whole.

But the biggest and most important difference between Mulally and his predecessors is that he attacked the root of the problem: Ford’s corporate culture. He took a sledgehammer to the silos that had divided the company into warring fiefdoms for generations. He forced everyone to stare reality in the face without flinching or turning away. It was not easy, nor instantaneous, but in the middle of a truly existential crisis, Ford’s executives finally stopped making decisions based on what was best for their own careers and started trying to figure out what was best for the company as a whole. That was something that had never happened before in Dearborn, and it was the key to Ford’s phenomenal resurgence. But only time will tell if Mulally has actually cured the disease or simply driven it back into remission.