Case Study on "Alan Mulally CEO Ford Motor Company"

Case Study 6 pages (2005 words) Sources: 5

[EXCERPT] . . . .

Allan Mulally and Leadership at Ford Motor Company

Historians have many approaches to history. One which applies to the case of Allan Mulally is that of the "great man" or leader. In such analyses, leadership and its effects upon the course of an organization are key in analyzing change in that organization. This is certainly the case with Ford Motor Company. In this essay, the author will discuss the role of leadership and how it can impact organizational performance. Secondly, the author will discuss Mulally's leadership style at Ford Motor Company and will provide examples of how his actions fit this style. Thirdly, they will examine how Mullaly's goal setting helped Ford improve its performance. Fourthly, the author will assess Mulally on each element of communication openness. This will include message transmission, trust, agendas, and goals. Finally, they will evaluate the effectiveness of Mulally's leadership style and recommend whether he should continue with that style, or use a different style.

For as much as Mulally is associated at the present time with Ford Motor Company, this is not where he spent the majority of his career. Prior to joining Ford in 2006, he rose up the ranks at Boeing where he served as executive vice president of the Boeing Company and president and CEO of Boeing Commercial Airplanes. There, he was responsible for all of Boeing's commercial airplane programs and other related services. In addition, Mulally also was a Boeing Executive Council and also served as the Boeing senior executive of the Pacific Northwest. Previous to the above positions, Mulally served as the president of Boeing information. Mulally joined Boeing for the first time in 1969 and progressed through a number of very significant engineering and program-management assignments. These included contributions to the 727, 737, 747, 757 and 767 airplanes ("Alan mulally," 2010).

Interestingly as we will observe below, this apparent wedding to high technology has not jaded Mulally to the benefits of highly optimized off the shelf technologies for the common consumer. His leadership style is broad enough that he could function both in the more unlimited high-tech environment of Boeing as well as in an environment where the consumer demographic like Ford is so much different from what he experienced before.

So, what can a former aerospace engineer bring to a car company? Evidently, CEO Mulally may be bringing the difference between solvency and survival rather that bankruptcy for Ford Motor Company. For many of the top Ford executives, bringing Allan Mulally was the ultimate in outside of the box thinking, an aspect of the high-tech world of Boeing that seems to being paying dividends at Ford Motor Company.

At times he can slip back in the Boeing mode. For instance, in November of 2009 when talking to Wall Street analysts in November of 2009, he described the debut of the fuel-efficient Ka at the "Paris Air Show" instead of the "Paris Motor Show." However, his soft, sensitive style has allowed him to adapt to a totally different business and he appears to be succeeding, at least in the sense that he has kept the company away from Uncle Sam's begging bowl. However, the financial losses are still the highest that they have been in Ford history. The recession trashed Mulally's 2006 vow to make money by 2009 and he acknowledges that he will not even break even until 2011. The thing that keeps him in the job is that while Ford's position may not be ideal, it is far better off the General Motors and Chrysler. Mulally claims that if they stick to the plan and his goals, they will get through the recession. This has been a hard sell in the conservative, stodgy culture of Ford which has been very resistant to change. While he has been understanding of other views he has been hard core on one item-change is good. He has imposed a single strategy, imposed discipline, problem-solving and transparency upon Ford so that the divisions now turn out multiple purpose vehicles from the same factories that can be sold in multiple markets. Also, he has taken quality Ford models such as the Taurus that had atrophied in Ford's calcified culture and gave them new life (Kiley, 2009).

This goal setting it seems is starting to show some results. In a talk on Bloomberg TV with report Mark Crumpton, the reporter acknowledged to Mulally that Ford had its most profitable first half in more than a decade and earned 2.6 Billion dollars in the second quarter. Stock is up more that 4%. Ford stock is paying dividends for the first time since 2006. He said that they will be a positive cash position by the end of 2011. In essence, they will not only have avoided government handouts like their industry rivals but will have turned things around, made a profit and paid a lot of the debt back. Mulally is predicting a gradual improvement followed by the beginnings of profitability in 2011 (Mulally, 2010).

Automobile Magazine named Alan Mulally as Man of the Year for 2010

for keeping Ford out of the government TARP subsidy trough that General Motors and Chrysler both fell into. "Mulally is living proof that a single, extraordinary leader with vision and determination really can make all the difference in an organization. In 2006, when Bill Ford, Jr., went shopping for someone to take over the role of Ford CEO, he was looking for not just a talented executive but for someone who had demonstrated the ability to reinvent and reimagine an entire corporate culture (DeMatio, 2009)."

Where Automobile Magazine agreed with many others was that one of Mulally's best leadership traditions (and ironically one of his most controversial) was to resurrect the Ford workhorse success the Taurus back from the corporate scrap heap. What had made the Taurus a hit was its low cost, fuel efficiency and team design. The results saved Ford from Disaster in the 1980's and the revived version seems to be helping to do so now under Alan Mulally ("The 1986 taurus," 1999). The new 2010 Taurus came out in 2009 to rave reviews (Piotrowski, 2010) and the Festiva and Fiesta have rejoined the Ford fleet (Abuelsamid, 2009).

The leadership success of Mulally may translate beyond Ford Motor Company. In a report, U.S. President Barack Obama has named Mulally as well as 17 additional executives, to the U.S. Council on Exports. This advisory group is charged with increasing domestic exports. Like many countries, the administration is banking on the ability of America to export and climb its way out of the worst economic downturn in some more than seventy years. As Obama put it "My administration has worked to improve advocacy for our exporters, remove trade barriers and enforce trade rules in an effort to ensure that the benefits of global trade are broadly shared...I am confident that their depth of experience in the private sector will be valuable as we continue working to open new markets for American goods, boost our exports and level the playing field for American workers." (Oosting, 2010).

According to Bill Ford, Ford Motor Company's executive chairman and the person responsible for hiring Allan Mulally sums up the new CEO's style succinctly: "Alan is not a very complicated person. He is very driven." (Taylor III, 2009) Alex Taylor III the senior editor of Fortune Magazine calls it the "Mulally" method, a good-natured by never-ending insistence on following the plan). The plan that Mulally has laid out for the company has identified specific goals, created a process that moves Ford along toward those goals and has installed a complementary system to insure that they get accomplished. The CEO demands his weekly or daily updates and ensures complete transparency (ibid). All of this has shattered Ford's formerly Balkanized culture and is remolding it into a profitable company once again. Now, instead of simple careerism that had motivated the senior management, Ford's top leadership has now been encouraged to think of the company first and career advancement afterward.

This planning and determination is remaking the automobile in the image of Allan Mulally just as the image of aircraft was remade when he was the CEO at Boeing. Interestingly, this near future does not include hybrids due to the new and undeveloped nature of the technology and the infrastructure that make them economically problematic. This is why there is a need for a more effective use of off the shelf technologies in automobiles until electric and hybrid cars can be made at prices that people can afford By pushing the envelope in areas where the automobile consumer public are comfortable, it will be possible to proceed without immediately introducing hybrid and electric cars (Zakaria, 2010).

In terms of effectiveness, it is this leadership style that has saved Ford. The effectiveness of this style has been proven by Ford's ability to refinance its recovery on its own terms and without government assistance. If the style is working, why change it? Unless the progress stops,… READ MORE

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