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Ford Motor Co. chief Alan Mulally has been the driving force behind the revival of two big companies. (Brendan McDermid/Reuters/Brendan McDermid/Reuters)
Ford Motor Co. chief Alan Mulally has been the driving force behind the revival of two big companies. (Brendan McDermid/Reuters/Brendan McDermid/Reuters)

The manager

Lessons from a turnaround champ Add to ...

Alan Mulally has twice turned around legendary corporations that hit economic quicksand, first at Boeing Commercial Airlines Group and more recently with Ford Motor Co., where he is president and chief executive officer.

Journalist Bryce Hoffman, who chronicled the efforts at Ford for his new book American Icon, summed up in a ChangeThis manifesto nine lessons that he learned from Mr. Mulally:

More from Harvey Schachter

Have a clear, compelling vision

At Boeing, the vision was to shrink the world and bringing cultures together through jet transportation. At Ford, Mr. Mulally found it in the company’s archives, in an old Saturday Evening Post advertisement from 1925 in which Henry Ford outlined his vision for the company: “Opening the highways for all mankind.”

Mr. Mulally made a blow-up of that ad and mounted it on his wall, passed out copies to top executives, and weighed all product decisions against that objective. It’s why he focused on the EcoBoost fuel-saving motor, which was cheaper than hybrids or electric engines.

Have a plan, stick to it, and keep it simple

Mr. Mulally joined Ford in 2006, when the iconic auto maker was on the verge of bankruptcy. He distilled his turnaround strategy for the company to four points: aggressively restructure to operate profitably within current demands and changing model mix; accelerate development of new products that customers value; finance that plan and improve the balance sheet; and work together effectively as one team.

Those four points were distributed on wallet cards to every employee.

Work on a better plan

Even while executing that turnaround plan, he knew Ford would need another plan down the road and was pushing his team to develop it. And that wasn’t just true for the turnaround: In Europe, where the company was operating successfully, he surprised the top team by asking, “What’s your better plan?”

Work together

Ford was known for its backstabbing executives but Mr. Mulally had zero tolerance for such behaviour. He prohibited jokes at another’s expense and encouraged teamwork by tying executive compensation to the success of the company as a whole.

Include everyone

For Mr. Mulally, working together didn’t mean just executives, but all stakeholders, including Ford’s suppliers and the auto workers’ union, which gave some ground to help the company get back on its feet.

Bigger is not always best

Mr. Mulally noted that some of the most profitable auto makers in the world were also some of the smallest. He told his team they needed to figure out how to make money at current volumes rather than obsessing about growth.

Know the numbers

One of Mr. Mulally’s favourite sayings is, “The data will set you free.” Numbers overcome defensiveness and obfuscations, making the path ahead clear. His management approach is based on clear, measurable goals and tracking performance against those objectives.

Fear not

No matter how bad things got at Ford, especially during the global financial crisis, Mr. Mulally believed his plan would work and shared that confidence with others.

Relentless execution

You may have a great plan and supreme confidence, but you also need relentless execution of that plan. “This is where leadership really becomes important. You have to wield the proverbial iron fist in a velvet glove,” Mr. Hoffman writes. “You need to challenge every assumption, stress test every element of your plan and keep a laser focus on your goals.”

Special to The Globe and Mail

Harvey Schachter is a Battersea, Ont.-based writer specializing in management issues. He writes Monday Morning Manager and management book reviews for the print edition of Report on Business and an online work-life column Balance. E-mail Harvey Schachter

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