Donald Winkler, 52
Chairman and CEO
Ford Motor Credit Co.
It was early in the morning, and Donald Winkler’s office telephone was not accommodating his distinctive view of the universe. That is, the freaking voice mail wasn’t working. Winkler punched numbers in an order he thought was right, but the system rejected them each time. Growing more and more agitated, he finally yelled at the recalcitrant device, “Goddamn it to hell!”
At that, the chairman and CEO of Ford Motor Credit Co. caught himself. He jumped from his desk, spun around, and dug into a cabinet drawer. Winkler is rummaging through the same drawer right now, reenacting the moment in an interview. He turns and presents himself — transfigured! A red latex ball adorns his nose. “That morning, I looked at myself in the mirror with this on, and I asked, What did I accomplish by getting mad at the telephone? I felt like a fool,” Winkler says.
Here is what we take away from that episode, in the words that Winkler himself espouses.
Donald Winkler is profoundly dyslexic, and he is a startlingly effective leader. Donald Winkler doesn’t fail. Events fail.
You don’t see many guys with red latex noses roaming the top floor of Ford Motor’s world-headquarters building. Up until now.
Mark Turner, 34, vice president, corporate risk, Ford Credit: “We were meeting with a group of managers from Ford Motor. On the first day, one of the Ford Motor guys piped up, ‘If you guys in credit would just do this.’ Don said, ‘Hang on. I’m an officer of Ford Motor Co. We’re all part of Ford. If you’re going to sit in this room and work on this team, you’ve got to drop this ‘we’ and ‘they.’ And if you have a problem with that, let’s step outside.’ Don didn’t realize what ‘stepping outside’ meant in the manufacturing world. It was just his way of engaging. The whole meeting went quiet. He came back after a break and apologized. He said, ‘I’m just trying to make the point that this is a collective effort.’ People got the message, and this has turned into one of the most high-performing teams that I’ve worked on at Ford.”
Don Winkler, 52, is a dominating man. It is not just his weight, which, through lack of exercise, has ballooned to 250 pounds in the past year. Winkler talks straight, he talks often, and he enjoys monopolizing a room. Colleagues acknowledge, with both amusement and annoyance, that they must battle him in meetings for control of the microphone. For relaxation outside work, he lectures at schools and universities — wherever there’s an audience.
Winkler’s publicity handlers warn that he tends to wander during conversations. He does, egregiously, though where he strays typically is at least as compelling as whatever point he may have left behind. They mention his need to focus his gaze on something — which is why, if you don’t offer constant eye contact, he requires a mirror, a picture, or a window reflection behind you to avoid being distracted. Talking on the telephone, he sometimes stares at himself on a TV monitor or in a small mirror by his phone. He scribbles constantly in a little notebook to help track and synthesize what happens around him.
Winkler, in other words, struggles to process the world in the way that the rest of us do. On the other hand, he often sees that world in ways that we can’t or won’t. That a man of such disjointed perception was hired a year ago to run Ford’s huge finance arm (with more than 10 million customers and $165 billion in receivables) speaks to his productive harnessing of something that most people reckon is a disability. It also says something about how business today must be done and how we must think to survive. The complex, the chaotic, the unexpected — that is reality. Companies and their managers who steer straight-line courses do so at their own peril. Paths must be continually flexible and constantly recharted.
So it is for Ford. The company provides financing for more of its customers, more profitably, than anyone else in the industry. Yet late last year, Ford Credit was losing business in the United States to banks. And while truck sales were strong, sales growth for many of Ford Motor’s cars was weak. “When you’re best in class,” Winkler observes, “you risk standing still. It’s easy to be too content. You need to take the paradigm that you’re in and turn it upside down.”
That is to say, you slap on a red nose in meetings to show you don’t take yourself too seriously. You launch “Cato attacks” (after the hyperkinetic character of Pink Panther films) on the people who report to you, calling them out of the blue and demanding that they immediately recite their strategic priorities. You tweak the organizational language. Winkler, for example, won’t allow the word “but” to be spoken in his presence. “And,” which is more inclusive and more constructive, is the accepted conjunction. “People don’t fail,” he says. “Events fail.” People learn. His unfailing response to any statement that has even a hint of negativism: “Up until now.”
It sounds like bad ad copy. And it isn’t how folks in Dearborn, Michigan are accustomed to talking to one another — until now, that is. Rapidly, almost comically, since his arrival last October, Winkler’s stock phrases have infused the deepest reaches of Ford Credit.
Greg Smith, 49, president, Ford Credit North America: “We have a small subsidiary, AMI Leasing, in Worcester, Massachusetts. It’s not at all in the corporate mainstream. I visited last month for a business review, and every person in the room was wearing a button with one of the language tools: ‘But to and.’ ‘Up until now.’ Not only had they heard and grasped them all, they each had embraced the specific tool that he or she was having trouble with. At our Fairlane operation in Colorado Springs, there is a jar sitting on a table. Every time someone says, ‘but,’ that person puts a dollar in the jar.”
Winkler’s language is the language of “breakthrough leadership.” It is the strategy for organizational change that he has developed and preached, in one form or another, for nearly three decades. It is a way of thinking that was born of his need, as an engineer and as a dyslexic, for extreme systemization — and, too, of his need for perpetual reexamination and continual improvement. It is the lever that he hopes will revolutionize Ford Credit and, in a perfect world, Ford Motor Co. as well.
Breakthrough leadership began, essentially, in 1972 at a General Instruments factory. Winkler was a newly minted electrical engineer designing new microelectronic circuits. Compelled to ask questions, to understand everything completely, he was constantly on the production floor, schmoozing with the people on the prototype line. Together, they set up a “white room,” a place where his designs could be critiqued and tested. The result: Winkler’s projects came in far faster and yielded far higher productivity than those of his colleagues. General Instruments made him its worldwide-operations manager when he was 26 years old.
Winkler began writing about everything, taking meticulous notes to help him visualize his thoughts. He thought a lot about purpose — and then about how his personal mission drove his goals. “If it works for me,” he realized, “it should work for the business too.” The organization should produce a statement of purpose, he thought. It should work together to map its goals and its strategy. It must harness the energy of every individual.
In 1976, Winkler took such nascent thinking to Citibank, which had recruited him as vice president for its corporate-trust business. He took over an operation of 1,000 people who were pushing around massive piles of paper — with a rework rate on that paper of 20%. He took one group of workers aside and told them to invent their own ideal environment. He told them to ask themselves, “How do we break out of the box we’re stuck in?” The workers figured it out. Productivity soared.
Alan Weber, 51, vice chairman, Aetna Inc.: “Don worked for me in operations at Citibank. He’s not motivated by money but by success. He wants to accomplish and to get recognition for what he accomplishes. Maybe it’s because when he was a kid he had to sit in the back of the classroom. But accomplishment and recognition are what really turn him on. He’ll work 24 hours a day to get that. He always views himself as the underdog. He likes to surface from out of nowhere and win.”
Winkler refined breakthrough leadership at Bank One Corp., which hired him in 1993 to build its Finance One credit subsidiary. He thrived, according to people who worked with him then, by embracing the unconventional: He fused together the indirect-lending units of roughly 70 Bank One affiliates; sold home-equity loans to the less-than-creditworthy customers whom Bank One itself had turned away; and launched an online auto-lending program with CarsDirect.com Inc. Before leaving the company amid a mass exodus of top executives last year, he had turned a humdrum organization with $10 billion in assets into a $45 billion leviathan that enjoyed nearly 30% annual earnings growth.
Breakthrough leadership, Winkler says, is about creating “something that would not have happened otherwise and something that will never go back to the way it was. Leadership is about taking people to places that they wouldn’t have gotten to by themselves.”
The process begins with an annual reevaluation of strategic vision, purpose, and values. Put people in a room together, and get them to question themselves and one another. Why are we here? What will it look like when our purpose has been realized? What do we see when we imagine a successful end? “We need to establish the vision,” Winkler says, “so that we can share it with others in the organization. You can tell when chisel has met wood in a purpose statement. It actually becomes the working surface for everything that follows. It allows you to set direction. It’s the rudder on a sailboat.”
(Winkler has a purpose statement of his own. So bent is he on reexamination and improvement that he refines the thing 20 to 30 times a year. But over a quarter of a century, the basic conceit hasn’t changed much: “To get people to think smarter, in such a way that, through intellectual conversation and larger question asking, growth occurs, so that mankind will benefit.”)
The goal of this initial exercise is to start people thinking in new ways, to challenge their old ideas, and to inspire in them some innovative new approaches. In any business situation, Winkler argues, there is a “current view” and there is a “better view.” The current view reflects the status quo, the road most often traveled. The better view says that the often-traveled road is just one path in a world of infinite possibilities.
“A paradigm,” Winkler tells employees in many of his frequently held breakthrough-leadership seminars, “is a box that limits thinking and constrains growth. There are lots of reasons why we stay in the box, but the number-one reason is fear of failure. To break out of the box, you have to ask questions — power questions.”
Barrett Burns, 55, executive vice president, global risk management, Ford Credit: “I was chief operating officer at Finance One’s biggest division. There was one part of the business that really was falling apart. So Don and I visited, and they gave us a presentation. It was the usual stuff. All of a sudden, Don stopped the show and said, ‘Give me all the petty cash you have. Let’s have a town meeting.’ No one said a word; this hadn’t been done before. Don said, ‘Come on, just ask me questions.’ Finally, someone did, and he gave her $5. Someone asked another question, and he gave another $5. A guy asked, ‘How come the phones don’t work every day?’ Don gave him $25. ‘Why doesn’t the computer refresh our information daily?’ $30. He was using the cash as a technique to break down barriers. When it was over, the site manager was upset. Don told him, ‘You probably think that I’m going to get mad. Well, I am mad, but not because you have problems. I’m mad because if you don’t tell me what your problems are, I can’t help you.’ And word got around: If you tell Don what’s wrong, he’ll help you fix it.”
What comes after you break out of the box? You translate vision into strategy. “That is the hardest thing to do,” Winkler says. It’s hard, he says, because the exercise forces people to align vision with practice, to decide what truly is important. What strategic issues prevent growth? How do you begin to address them? Which projects do you set in motion?
Winkler starts a ball in motion by asking everyone in the room to decide, individually, which five strategic issues are the most important. That’s difficult enough for most managers. Once that’s done, though, the floor is open for discussion and negotiation. Suddenly, individual strategies become the group’s concern. Do they jibe with one another? Do they duplicate? Which ones best support the organizational statement of purpose? Which ones are most important?
At Ford, Winkler began gathering his top 100 executives for three or four days each month. At the onset, members of the group identified 1,800 or so projects that had been deemed important enough — by someone, somewhere, at some time — to merit attention and resources. 1,800 projects. “I thought, Holy mackerel, no wonder we’ve got some issues here,” Winkler says. “We were doing 50 projects on the Internet alone, and none of the people working on those projects were talking to one another.” After four months, the executives had distilled the 1,800 projects to the 84 that were most important.
Winkler’s most impressive strategic victory at Ford (indeed, he says, the biggest win of his career) was born of a similar “family meeting,” as he calls them. Both Ford Credit and Ford Motor were looking for ways to address cooperatively their slipping share of auto financing and their anemic overall car sales. Winkler and Lloyd Hansen, Ford Motor’s controller for North America, gathered a task force off-site.
Lloyd Hansen, 52: “This meeting started differently from most. Don had the room set up like a party, with hats and whistles and a banner that read, ‘Congratulations! 2002 Reunion.’ As people came in, Don and I shook their hands and congratulated them. This was a reunion, two years from now, of our group, and we were celebrating our success. Then we started talking to one another about what we had accomplished. And, of course, that led to ideas about what it was we really wanted to accomplish now. When it was done, there was a pretty clear vision statement. Then we asked, ‘If we’re going to accomplish this, what four or five key areas do we need to go after?’ “
The team agreed to rationalize dramatically a complex lease-pricing schedule that had been confusing and aggravating to dealers and their customers. The new schedule also simplified categories of customer creditworthiness, which had been yet another source of dealer angst. Most importantly, Winkler agreed to change the way that Ford Credit calculated lease residual values, which allowed for lower monthly lease payments. Ford Credit would take a lower margin — but Ford Motor would sell more cars, which in turn would allow Ford Credit to make more loans.
Many of the changes were put into place within 48 hours. Ford Motor’s U.S. car sales rose almost instantly. And Ford Credit’s lending contracts went up as well. In June, Ford Credit financed 54% of all the cars Ford Motor sold — up from 46% a year earlier. In practice, it is nearly impossible to finance a higher percentage. In large part because of that performance, Ford Credit’s operating profits in the first six months of this year totaled $741 million — up 17% from the first half of 1999.
As stunning as the company’s financial performance has been, Winkler is forging something even more remarkable at Ford Credit. He is changing the way that people talk, think, and behave. He is creating a place, he hopes, where people are accountable for their work; where openness and honesty dictate communication; where respect and trust determine relationships; and where “everyone,” as he says, “is on the same level.” Every idea counts.
After every meeting, after every transaction, Winkler sends an email message to the people involved: “Here’s what just happened, this is what we did right, this is what we could do better next time.” He expects members of his executive team to do the same after their meetings. He writes regular “love letters” to the people who report directly to him. The dispatches detail the people’s strengths, their weaknesses, and their strategies for personal improvement; the messages are the start of a dialogue to move those people to the next level — from good to great.
“You’ll know that you’ve got a real breakthrough when the values change in a place,” Winkler says. “Sure, you won’t see it overnight. You may see some numbers come up positive. But you have to look at the culture of a place over three to five years to see if you’ve really made anything happen.”
Elizabeth Acton, 49, executive vice president and chief financial officer, Ford Credit: “Don has made me more sensitive to my role as a leader, more aware of the shadow that I cast. Lots of people watch us, so my behavior is elevated out of the day-to-day. I think more strategically about it. What signals am I sending? What’s my body language saying? Where am I on the mood elevator, and how does that affect people around me? Don has sensitized me to that.”
Every morning, Don Winkler wakes at 3 AM. He begins each day with 20 minutes of mental calisthenics: simple exercises that help point his brain in the right direction. It is not something he particularly enjoys, yet he requires himself to keep at it. He feels that he cannot be effective otherwise.
“When I did my warm-ups this morning,” he says, “I was teary-eyed. I thought, There are people who don’t have to do all this. My productivity could be so much higher. Other people wouldn’t do it this way.
“But that’s good and bad. I’ll do something outrageous, and people will think that I’m a bit strange. But then, that’s okay. That’s good. Let’s be a little outrageous.”
Keith H. Hammonds (email@example.com) is a Fast Company senior editor. Contact Donald Winkler by email (firstname.lastname@example.org), or learn more about him on the Web (www.cyberwink.com).
Sidebar: What’s Fast
Donald Winkler, chairman and CEO of Ford Motor Credit Co., never misses a chance to preach the virtues of “breakthrough leadership.” For much of his career, he has been breaking the rules for what business leaders do. Here are his 10 principles for effective leadership.
- Set real priorities and real commitments.
- Grab hold of tough problems, and don’t delegate them.
- Don’t let the guy below you make the hard decisions.
- Set and demand standards of excellence.
- Create urgency! It’s always better to do something than it is to do nothing.
- Pay attention to details. Getting all of the facts is the key to good decision making.
- Be committed, and show it. Concentrate on possibilities.
- Be willing to see failure as a stepping-stone to success.
- Be tough and be fair with people. Avoid compromise when choosing coworkers.
- Last but not least: Play! You can’t accomplish anything unless you’re having fun.