When Alan Mulally joined Ford as CEO six years ago, Bill Ford helped him define pretty neatly the challenges (and opportunities) the company was facing: There were too many brands under the Ford umbrella (Aston Martin, Jaguar, Land Rover, Volvo, plus an equity position in Mazda); the company had too little control over its regional manufacturers around the globe; and, domestically, Ford was too focused on big SUVs when the world was turning toward smaller, more fuel-efficient cars. Also, Mulally says, "In September '06, when I arrived, the first forecast I saw for profitability was a $17 billion loss. And we achieved it."
Mulally can celebrate a different kind of achievement today. Ford reported a pre-tax profit of $2.4 billion in the first quarter of 2013, the highest in North America since Ford started reporting the numbers in 2000; vehicles sales and ad revenue rose 10% year-over-year; and Ford gained marketshare in Asia. While the automaker's turnaround tale under Mulally's leadership is well documented, what hasn't been unearthed is the story of where, exactly, the CEO found inspiration for his mission. In 2007, Mulally tells Fast Company, "I was looking for a compelling vision, a comprehensive statement to deliver that strategy." He found the company's mission for the foreseeable future in a 1925 advertisement in the Saturday Evening Post. It featured a painting commissioned by Ford's ad agency called "Visions of Tomorrow."
"That was the vision of Henry Ford originally," Mulally says. "Everybody would understand what Ford stood for."
Mulally recently detailed for Fast Company how this 88-year-old painting and ad became an inspiration for the future of Ford.
Why was this painting commissioned and paired with this message at this time?
What Henry Ford and Edsel Ford were trying to do at that time was to lay out a very compelling vision for the consumers about Ford ... and that's also what Ford was doing with all the stakeholders at that time, trying to communicate the same message.
Sounds familiar. What was going on at Ford in 2007 that made this ad especially poignant?
We only had $28 billion in the bank, so it was going to be gone really fast, and clearly we were losing money on all the brands and all the areas around the world. And we were going nowhere and losing market share.... I was going through all the visions that people had had over the years and then I came across this advertisement, and you could imagine what that meant to the team and me to see that, because there was the vision of Ford ... and that could be the vision of Ford going forward, where everybody would understand what Ford stood for, and everybody could align themselves and their work to create an exciting, viable, profitable, growing company.... So you can imagine the innovation and the creativity that that compelling vision enabled. It just unleashed everybody to deliver this plan. And everything you see today is a result of that strategy, and the relentless implementation of it, to deliver that compelling vision that Henry laid out on January 24, 1925.
How did Ford go so many years without a central thesis like this?
You know, I don't know the specific answer to that question. Ford had a number of different strategies over the years that they thought obviously made sense at the time, just like all the different brands, and also the regional operations. But all I know is that when we pulled together the team six years ago, with Bill, that we kind of tapped into all the knowledge that we had, and we knew that the direction was not gonna be successful in competing against global powerhouses. And so we decided that this is a vision and this is a strategy that we should follow, and you never know until you start implementing. But clearly, we're on a very, very positive, growing path based on making cars and trucks that people really do want and value. And we're doing it more productively than our competition.... I think it would be very hard to move Ford off of this fundamental business plan now.
Was this painting and message an attempt to revolutionize Ford from the inside out or did it also still translate for consumers?
I can't emphasis how strongly it touches all the stakeholders, and that was the idea.... Today, everybody knows that Ford is committed to serving all around the world a complete family of cars that are best-in-class. The communities know it. The employees know it. The suppliers, everybody knows. So I think the more the powerful vision includes everybody, the more useful it's going to be.
It's also a philosophy of being market-driven, and customer-in, versus product-out. Because a lot of companies will come up with an invention, and they'll further enhance that invention, but that's more like product-out, as opposed to serving fundamental needs. Now, a cool story about that is, somebody asked Henry Ford one day how he got his inspiration for the automobile and did he talk to the consumers at the time. And he said "I did talk to the consumers about what they want in value, but what came back with was that they wanted a faster horse."
That famous line.
And so what they were really saying was "I'd like to get from A to B; I'd like to get there faster; I'd like to get there safely; I'd like to get there more reliably." And it's one thing to look at the market and where it is and what customers want in value, but it's also about having a point of view in enabling technology--what can you really do to deliver on the intrinsic and inherent values that people really do want and value? And I think that's again why this "Opening The Highways To All Mankind" statement was just so successful at pulling everybody together. It's just exciting, and it's compelling.
What's happening in the world or in technology that's allowed you to do this now that maybe wasn't possible six years ago?
I think some of the big, fundamental things that are happening in the world are, one, economic development worldwide.... We're so interdependent, and what one country does is such an important part of what happens in the global economy.... I think another is that, it used to be that around the world, people seemed to value different things. Europe was a little bit ahead on fuel efficiency and lower CO2. The United States enjoyed lower fuel prices than Europe, and we had a relatively smaller economy in Asia-Pacific. So now we have these huge economies all around the world. Everybody cares about not only quality and functionality, but they also want the power of choice, whether it's a small vehicle or a large vehicle. They want the best fuel efficiency, no matter whether it's an F-150, or it's a Fiesta. They want absolutely all the safety features on a Fiesta versus an F-150, because they're making a lifestyle choice now on how they want to move. People want to be able to move around, and feel the power and the joy of personal mobility, which is one reason that it was really easy to pull everybody together around the world, because once you have a compelling vision, it makes it easier for everybody, no matter where they are around the world, to pull together and use their resources as one team.
And you feel like a painting and statement from 1925 captures all of this today?
I'll tell you the coolest thing is that last sentence. See the one, "The motor company views itself today with less with pride and great achievement.."? Cause here he is, the number one producer in the world, but not thinking of himself with what he's done, but with a sincere and sober realization of new and larger opportunities for service to mankind, worldwide.
You don't see words like "mankind" used twice in advertisements today.
Exactly, so there we are, accelerating the implementation of Henry Ford's original vision. I think, you know, I've been in business a long time, but I have never seen such a link between the founder's vision and what the company's doing 110 years later, as this.
What about the painting, the image itself speaks to Ford today?
There's just so many neat things about it. You got the family; you got the mother and the father and the kids; and you've got the vehicles. And remember, at that time, before the automobile, people didn't go more than 10, 12 miles away from their home. And now, you look at how the Interstate System and the roads went up, how people started to move around, and all of our data around the world says as soon as you have discretionary income, as economies grow, that people want to go travel. They want a car to move around. They want to get on an airplane and move around. Cause they want to be part of the world. So you have that visual. Then you have the visuals up at the top, with the factory, and when I look out my window--see the smokestacks up there?--I am looking at exactly that building. I'm looking at the Rouge, and there is the final assembly, and you can look at the final assembly and go to the right, and you can see where he made the steel, all the wood products, the plastics, all the way down to the iron ore coming, because he's completely vertically integrated. You can see the whole production chain of Henry Ford's original vision. And so on my wall, I have this really big print. I turn nine 90 degrees, and there is exactly the same factory that's on that print. I mean, you look at that picture and you know exactly why you're here.
This interview was edited and condensed.