Indeed Alan Mulally has done it at Ford. I had the pleasure of hearing him speak at a conference this week and I am impressed with his leadership. Under Mulally, Ford has not only turned profitable this year and survived the recession without government bailout or bankruptcy, but more importantly the company is resurrecting the Ford brand and image.
There were many skeptical in the industry when Bill Ford in 2006 recruited Alan Mulally, a top executive at Boeing, to lead Ford. But it sure looks like a good decision now.
Ford had actually stopped making cars in the U.S. and was only making trucks here. “We went to work reducing overhead including a new agreement with the Union.” “We are now converting some truck plants to build car components again”, said Mulally. "We are fighting for the soul of manufacturing in the US."
For example, the new Ford Fiesta shares about 65% of its parts with Fiesta models sold in Europe and China. The upcoming new-generation Focus that goes on sale here next year will share as much as 85% of its content with similar versions of the compact car sold in other regions of the world. Such a strategy enables Ford to spread design and development expenses across a greater number of vehicles. As a stand-alone American-designed and -built vehicle, the Focus would have sold about 150,000 units annually. But as a global vehicle, its development expenses are spread across sales expected to approach 2 million.
Mulally has also been focused on quality. In the last few years, Ford vehicles have been getting better quality ratings. In a recent auto quality study, Ford moved from 14th place in 2006 to sixth place in 2010 with a quality rating above Toyota.
Coming from the Aerospace industry has made Alan very quality oriented. As he pointed out, safety and continual improvement are very important in the Aerospace industry where products are complex systems with lots of subassemblies and parts. Alan has also been a student and fan of Toyota’s TPS, Juran, and Deming. Ford was Lean before Lean and Alan wants to honor that tradition.
Cars are getting more complex everyday with a lot of electronic controls, and perhaps there is a lot more to learn from the Aerospace industry.
I really liked Alan’s thoughts on teamwork, visibility and management meetings. "Definitely... this is a team sport! In our weekly meetings, every functional area is represented including Quality. Communication is important. We need to get the whole team on-board. We need to have a plan and everyone must know and understand the plan.”
Alan celebrates finding improvement opportunities. It is an important part of the culture of process improvement. “How can all the lights in the dashboards be all green when we just announced big losses?” He applauded the manager that brought that first issue up in a meeting. "Thanks for that visibility. How can we help you solve that problem?" Next week, the charts were a rainbow of colors,” he smiled.
The pressure is immense in these meetings because there is so much visibility. It's all out there and everyone knows who is doing what. But the pressure is positive... a pressure to correct problems and improve. You have to follow up and take action.
One-Ford Pocket Card with Expected Behaviors
“We have to have good communication in meetings and mutual respect. We don't allow side conversations in meetings. If someone is talking, we stop the meeting until they stop or ask them to leave. We don't allow humor at anyone's expense either. It is not really funny. Our leaders are not only responsible for process improvement in their areas; they are also responsible for skills development.”
Alan is definitely an inspiring leader and I am not surprised this “aerospace guy” was named 2010 Man of the Year by Automobile Magazine. We can follow Ford’s example and keep our eyes open for talent and good ideas from other industries.
References:
“Ford's student driver takes the wheel”, Alex Taylor III, Fortune Magazine, 11 2 2006
“Fixing up Ford”, Alex Taylor III, Fortune Magazine, 5-12-2009
http://money.cnn.com/2009/05/11/news/companies/mulally_ford.fortune/
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