Alan Mulally, who led the turnaround at Ford from 2006 to 2014 after running Boeing’s commercial aircraft business, built much of his career success through the use of ex-Boeing CEO Phil Condit’s “Working Together” approach.
The engineer and executive shared how that framework can work for advisors and their practices on Wednesday during this week’s Pershing Insite meeting in Phoenix.
Some of Working Together’s key ingredients are integrity, honesty, respect and trust. Those who aren’t interested or able to follow its tenets, Mulally explained, are politely invited (and urged) to “move on to other opportunities.”
“It’s about trusting the process and having zero tolerance for violations,” he explained. “Enjoy the journey, but there’s no [joking or] humor at someone else’s expense. You go along to get along, or you don’t get [the insights from] sharing.”
“Early on in my career, I wanted to be a financial advisor, so this is my dream to be with you,” said the retired executive, who spent 38 years at Boeing. The beneficial approach of the Working Together process, he added, “are true for all size companies.”
One of Working Together’s key tenants is that “all people know how important they are [in the process] — suppliers, investors, employees, [customers] and beyond,” he said, noting that 70% of a plane’s value comes from suppliers.
Having a positive attitude — “or finding a way” no matter what — is also critical, Mulally said, explaining how Boeing and later Ford used color codes (green, yellow and red) to track the progress and challenges facing work processes.
After Mulally was tapped to run Ford, he was asked what he knew about a business that has roughly 10,000 parts per unit and relies on sophisticated engineering.
“I said I worked on the 777, which has 4 million parts and stays in the air,” he joked. The Detroit News then ran a headline, “We think we got the right guy.”
Mulally saw cultural change as the only way to move forward for a company with a $17 billion net loss. “I worked to bring all leaders together and go through my plans,” he said.
This meant getting top managers comfortable with their projects being tracked for their problems — meaning being color coded yellow or red. “We had to say what was not going well,” Mulally told them. “And no one wanted to be the first to say something.”
That changed, thanks to Mark Fields — and later other execs — saying that they “would trust the process.”
Part of that process was getting all the Ford leaders to share ideas on how they could help correct problems. “That took six or seven seconds,” the former Ford leader said.
Plus, all the managers saw that — one week later — Fields was still at the table. “It was about trusting the process, and then we knew that no matter what happened, we were going to be OK” if everyone took care of business “and worked together.”
During the financial crisis, Mulally said, “We took a $23 billion loan [from the government] and paid it back.” The firm was not part of the Troubled Asset Relief Program.
“To be successful, you need to have a compelling vision, a comprehensive strategy and relentless implementation,” according to the retired executive.
“The stakeholder that gets me the most is that of the employees and how they feel about Ford,” he explained.
Today, 40% percent of workers worldwide are not satisfied with their jobs, and their level of engagement is only 20-25%, Mulally explained. “They are not going to work to ‘build a cathedral.’”
Creating a culture in which all stakeholders are engaged “is the key competitive and strategic advantage for any business,” he said. “Treat the reds like gems. Engage everyone in the most open and honest way to build a cathedral.”
According to best-selling author Simon Sinek — who spoke Thursday at Insite — Mulally stands out as “an infinite-minded leader” who “did remarkable things at Boeing and Ford.”
“It’s about reconfiguring minds away from the competitors to beat [in the short term] toward looking at the worthy rivals” to compete with in the long run, Sinek explained. The strength of these worthy rivals “shows you [your] weaknesses.”
In Ford’s case that was Toyota, the author pointed out. “As Mulally said when asked what car he drives, ‘Lexus, the best car there is.’”
The Ford leader “shared a culture about learning from Toyota,” according to Sinek. And Mulally succeeded by asking the right questions: Where can we improve? What can we learn?
— Check out Best-Selling Author Tells Advisors: Don’t Bring a ‘Finite Mindset’ to an ‘Infinite Game’ on ThinkAdvisor.