Ford CEO Alan Mulally Focuses on the Company and the Outside World
Alan Mulally, the CEO of Ford Motor Co., through June 2014 is widely admired for his accomplishments in recapturing much of the past glory of Ford. Mulally has played a key role in two different industries. As the president of the commercial airplane business at Boeing in the late 1990s, he revitalized the company including a major thrust into digital technology. Mulally was hired as the CEO of Ford in 2006, to help turn around the company, at a time when Ford was on the verge of collapse. One of Mulally’s first giant moves was to borrow $23 billion by putting up Ford’s assets as collateral. The purpose of the loan was to give the company enough cash to survive until its cash flow position improved. The huge loan enabled the company to avoid bankruptcy and a federal government bailout. Ford soon became a stable, profitable company, and by 2013 became the number one seller of automobiles and trucks in the United States. A key part of the turnaround plan was to create global heads of manufacturing, marketing, and product development, thereby contributing to a consolidation labeled “One Ford.” The One Ford plan is a vision for the organization and its mission. At the heart of the plan is the phrase “One Team.” Another part of Ford’s vision derives from Henry Ford, who understood that the desire to move—to have freedom of mobility—is enduring and universal. Mulally believes that the company’s role in attaining his enduring vision will evolve. He believes that one day Ford might be part of connecting different modes of transportation, including bicycles, waterways, cars, busses, and subways. His short-range vision for automobiles is that they will really be another instrument on the Internet. Mulally believes that a leader must have a compelling vision and a comprehensive plan. He refers to this as positive leadership, referring to the idea that there is always a way forward, and that the leader must find the right path to move forward. Every employee is included in this plan, and everyone’s contribution is respected. Mulally also focuses on understanding what is happening in the world, such as sensing the rise of the middle class in Asia thereby creating an expanded market for vehicles. To help managers respond to the outside world, Ford holds a Business Plan Review meeting every week. The entire global leadership team attends either in person or remotely. Leaders discuss the worldwide business environment at the time, including such factors as the economy, the energy and technology sectors, and what competitors are doing, and what customers want. The group then talks about forces in the world that are going to shape what consumers will value in the future. The Business Plan Review meeting functions as both a strategic plan and a relentless execution plan. Mulally believes that leaders across the company are responsible for deciding “What business are we in?” At the same time leadership, with the contribution of their team members, must figure out what deep consumer need the company is uniquely positioned to satisfy. Mulally received a bachelor of science and a master of science in aeronautical and astronautical engineering from the University of Kansas. He also holds a master’s degree in management from the MIT Sloan School of Management.
- Which aspects of strategic leadership are mentioned in the case study? What additional suggestions could you give to Alan to improve his strategy?
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