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3 Lessons From Alan Mulally's Tenure at Ford

Amidst widespread reports that Ford will soon announce COO Mark Fields as the successor to CEO Alan Mulally, the time is right to consider what small business owners and entrepreneurs can learn from Mulally's legacy.
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When personnel news at large companies dominates the headlines, it's easy to turn away. In most cases, you wonder how, if at all, this changing of the guard in corporate America has any influence on your life as a small business owner. (Unless, of course, you happen to own stock in the large company).

But with the news this week that Ford CEO Alan Mulally is soon stepping down, you have a legitimate reason to look into his leadership methods, and to see how you can apply them to your own company. This is, after all, a CEO who took over at Ford in 2006 when it was losing billions of dollars. He turned the venerable automaker around, revamping the company culture and restoring the business to profitability. 

Here are three lessons from Mulally's legacy that you can apply to your own leadership efforts: 

1. Defining the four key parts of every CEO's job. In a November 2013 interview with McKinsey, Mulally outlines four things every leader should do:

(1) Facilitate connections between the organization and the outside world;

(2) Hold yourself and your teams accountable for deciding, "What business are we in? What is the deep consumer need we are uniquely positioned to satisfy?"

(3) Articulate and model a set of behaviors; and

(4) Reinforce the processes the company is using to meet its goals.

It's a short paragraph, but it covers a lot of ground. If you had to substitute a word or short phrase for each of the above four tasks, those words would be:

(1) Liaison and ambassador;

(2) Big-picture inquisitor;

(3) Role model;

(4) Procedural czar. 

2. Creating a culture where the top team is unafraid to oppose you. Al Amador, a principle consultant with The Table Group, likes to tell a story about how Mulally was once asked to name his greatest "technological" contribution to Ford's turnaround.

"I taught my executive team how to argue," was his answer--all but ignoring the word "technological." But never mind the details. The point is that from Mulally's perspective, altering the chemistry of the top team came first: specifically, the change in its behavior, from consensus-seeking to argument-airing.

Why is it important that the best teams trust each other enough to vent their conflicts? One reason--aside from avoiding the artificial harmonies that create simmering internecine tensions--is that leaders need to prevent themselves from being surrounded by suck-ups. If your top team is too sycophantic, they'll never help you uncover what you don't know. Your blind spots--and the organization's--will remain blind spots. 

In fact, Hal Gregersen, an expert on innovation and disruption, believes most organizations remain blind to future competitive threats because the top team tends to insulate itself from conflict and criticism. Keep that in mind, next time a meeting with your top team ends and no one at the table disagrees with you. 

3. Presiding over a smooth leadership transition. Succession planning is never easy, especially when the successor is following a legend like Mulally. But as Jena McGregor points out in a fantastic Washington Post column, some of the transition from Mulally to COO Mark Fields seems to have already happened: 

Fields, a 25-year veteran of the company, was named chief operating officer in 2012, and even then his future ascension was seen as inevitable...Meanwhile, Fields already runs the weekly business-review meeting that Mulally instituted, Bloomberg reports, and is in charge of all day-to-day operations of the automaker. 

The lesson, in a nuthsell, is that you don't want to announce a succession until it's already clear to most insiders that the successor is ready, capable, respected--and already doing some of the job. 

So before you shrug away the news of Mulally's departure as just another big-name transition in the headlines, think again. There's a lot you can learn from a leader like him. 

IMAGE: Shutterstock
Last updated: Apr 24, 2014




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