The remarkable turnaround of Ford led by Alan Mulally -- without U.S. government financial aid -- provides an outstanding example of how to gain competitive advantage through organizational culture.
When Mulally arrived at Ford (NYSE:F) in 2006, the automaker’s culture could be described as silo rivalries with leaders embroiled in turf wars. This culture drove Ford to the verge of bankruptcy.
Continue Reading Below
Following are seven practices that helped Mulally save Ford by transforming its dog-eat-dog culture into a sled dog team that pulls together.
1. Communicate an Inspiring Vision
In an earlier article I wrote about the power of having a vision phrase. Mulally communicates a memorable vision phrase, Henry Ford’s “opening the highways for all mankind,” to express how Ford is making the world a better place and serving humankind. Mulally describes Ford as giving people “freedom of mobility” so they can “access opportunities for growth.” This unites Ford’s people around a shared vision and focuses them on a cause greater than self.
Mulally frequently speaks about the vision and factors it into decision-making, including in discussions to evaluate new product development priorities. Ford’s newly designed F-150 pickup for 2015 fits the vision well. Its aluminum-based body makes the popular pickup lighter, more fuel efficient and affordable.
“One Ford Plan” is another phrase Mulally uses to describe the plan to progress toward Ford’s vision. By communicating the plan, he makes the vision credible.
2. Make Your Values Known
Memorable phrases can also be used to communicate the leader’s values, in other words, how the leader expects people to go about making progress toward the vision. Mulally frequently uses phrases including “One Ford,” “one team,” “the power of teams,” and “working together always works” to communicate how much he values team players. He distributes wallet-sized cards with Ford’s business plan on one side and 16 expected behaviors (values) on the other. “Work together effectively as one team” is on the card.
3. Live It
Mulally walks his talk. In meetings he is a facilitator/coach rather than a dictator. He prohibits humor made at the expense of others. He expects leaders to openly share the obstacles they face. He celebrates and enthusiastically praises leaders who help one another instead of focusing solely on problems in their domain.
4. Think Win-Win
Rather than thinking of other individuals and organizations as competitors, Mulally employs a “win-win” mindset and approach in relationships. It helped him forge an agreement with the United Auto Workers union to make certain changes necessary for Ford to make a profit in return for bringing production back to the U.S. It also helped him consolidate Ford’s purchases to suppliers that were willing to partner with Ford to drive down costs in return for receiving a greater share of Ford’s business.
5. Get Everyone on the Same Page
Mulally talks about the importance of developing a collective point of view. One process to do this is the weekly “Business Plan Review” (or “BPR”) meeting attended by the global leadership team, and all business and functional leaders. At BPR meetings, leaders present updates on progress to achieve their goals. Goals are color-coded green for on target, yellow for at risk, and red for off target. When problems are identified, follow-up meetings are scheduled to dig deeper and identify solutions. In addition to implementation issues, BPRs include strategic topics such as the economy, labor supply and competitive developments.
Alignment is also achieved by encouraging feedback. This practice gives people a voice and helps decision-makers identify optimal solutions. Mulally communicates the importance of creating a safe environment for honest dialogue. The approach of developing alignment through conversations that move people toward consensus, rather than forcing it, makes alignment and excellence in execution more likely.
6. Take a Positive “Can Do” Attitude
Mulally leads with positive comments rather than criticism. With a plan in place, good people to implement it and continuous improvement of the plan, Mulally maintains an optimistic attitude that Ford will continue to make progress toward its vision.
7. Be Results Oriented
Task excellence and results are important to Mulally. He talks about “relentless implementation” and “let the data set you free.” He follows a set of metrics to assess progress and results, and the metrics are tracked weekly and analyzed during the BPR meeting. Doing so grounds the group in reality and provides an objective means for assessing where the organization stands. In Ford’s case, consistent positive results help build greater unity among the overall team.
Ford’s Connection Culture
Alan Mulally’s practices transformed Ford’s culture into what I’ve described as a “Connection Culture.” In this culture everyone feels like part of the team versus feeling unsupported, left out or lonely.
A Connection Culture provides an enormous competitive advantage for organizations. The lack of connection in most cultures today is why 70 percent of the workers in America (and 88 percent globally) are not engaged and giving their best efforts at work. If you want to drive your team ahead of the competition, implement these practices from Alan Mulally’s playbook.