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Leadership: Optimism Against the Odds

Let’s say you’re the CEO of a company that just lost more than $12 billion dollars the preceding year. Your company is not expected to post an annual profit until 2009. So what do you do? Hide your head in the sand? Scream at your team? Learn to read tea leaves?

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Well, if you’re Alan Mulally, CEO of Ford Motor Company, you do none of the above. You radiate optimism. You talk up new opportunities and reassure people that things will get better. Mulally may be excused as being a bit naïve; after all, he’s a newcomer to Detroit and best of all he’s not responsible for the years of mismanagement that put Ford into its current nosedive. He was hired in September 2006 to save the company. So far, he hasn’t moved the sales needle, but he has reinvigorated its sense of purpose. And for that reason, Mulally is someone who knows how to smile when the red ink is lapping at your chin. As gleaned from a recent interview Mulally gave to reporters Jeff McCracken and Joe White of the Wall Street Journal, here’s what we can learn from his example:

Get grounded. As a Boeing executive, the auto business was new to him so there was a steep learning curve. He read research, studied reports from consultants, and he talked to his stakeholders – employees, dealers, and suppliers. This information gave him a true picture of what was working and what was not. He went out of his way to seek different points of view inside and outside the company.

Focus on the business. Mulally applied his engineering mindset to problem-solving. By asking questions, he learned how Ford did things as well as what it could do better. For one, he insisted on business plans for all business units, something that had not been done previously. His outsider status gave him a unique perspective; he could look at existing problems from new angles and suggest alternatives.

Manage the team. Mulally learned the capabilities of his people by observing them in action. As he noted in his interview with the Wall Street Journal, he didn’t get rid of lots of people. Mulally did just the opposite. He delegated more responsibility to more people. If things did not work out, he made moves, but he gave his people time to prove themselves.

No matter what Mulally says or does, the proof of his tenure will become clear if Ford survives. Mulally did have reason to smile when Ford’s second quarter earnings were posted. For the first time in two years, Ford was in the black to the tune of $750 million.

Still, the challenges ahead are enormous. If Ford can produce cars and trucks that enough consumers want to buy; partner with the UAW to reduce and manage legacy health and pension costs; get labor, material, design and production costs under control; and return the company to profitability, Mulally will be hailed as a hero. If not, he’ll be remembered as a very nice man, talented and optimistic, but against whom the odds were stacked too high.

Sources:
Jeffrey McCracken and Joseph B. White “At Ford, the ‘Outsider’ is Optimistic” Wall Street Journal 7.23.07

John Baldoni • Executive Coach/Author/Speaker • Baldoni Consulting, LLC • www.johnbaldoni.com

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