Transformational Leadership: Culture and Behavior
In the annals of business history, Alan Mulally’s stewardship of the Ford Motor Company from 2008 to 2014 stands out as a stellar example of effective leadership. His feat of turning around Ford, amidst some of the most tumultuous times the automobile industry has ever faced, is often hailed as one of the most remarkable business achievements of the past 50 years.
After leaving a thirty-year career at Boeing, Mulally took the helm at a struggling Ford. The automotive giant was a massive, bureaucratic and failing organization in a severely distressed industry. This extraordinary chapter in Ford’s history is vividly depicted in the book “American Icon,” a must-read for anyone interested in transformative leadership and corporate turnarounds.
I would like to focus on a single, seemingly unassuming aspect of Mulally’s leadership methodology at Ford. It may come across as simplistic, or even rudimentary, but I think it was a pivotal element in the transformation he spearheaded.
Defying conventional wisdom, Mulally made the audacious decision not to dismiss the majority of Ford’s staff during the turnaround process. Ordinarily, one might have expected Mulally to overhaul the existing leadership — those responsible for Ford’s predicament when he took over. Surprisingly, he retained most of the existing team, hiring only one outsider.
So how did Mulally achieve such a dramatic turnaround under these circumstances?
The answer lies in Mulally’s innate ability to hold individuals accountable while demonstrating genuine care and concern. In fact, one could argue that his signature blend of firmness and empathy was a significant driver of Ford’s transformation.
An illustrative example from Mulally’s tenure involves a regular meeting he instituted for his executive team. The aim was to maintain a clear understanding of the challenges faced by the company and devise effective strategies to tackle them. These meetings were intensive, exhausting, and held weekly. When a key member of Mulally’s team failed to attend one such meeting, Mulally’s reaction was unique. Instead of expressing anger or frustration, he calmly communicated the consequences: that absence from these critical meetings was incompatible with a leadership role at Ford.
Mulally’s approach was not marked by bitterness or anger. Instead, he demonstrated a sincere commitment to holding people accountable whilst maintaining an atmosphere of respect. This approach extended to even the smallest of issues, such as discouraging the use of mobile phones during meetings. Much like a dedicated teacher, Mulally would pause and maintain eye contact with the offender until the device was put away. Such seemingly minor interventions required the courage always to uphold the company’s values and culture.
It is often the case that senior executives are preoccupied with addressing the politics and confusion prevalent in their organizations. They are keen to see improvements in middle management practices but fail to realize that their behavior sets the tone for the rest of the company. In fact, it is the CEO’s prime responsibility to relentlessly and uncompromisingly uphold the desired organizational culture and behavior, albeit in a caring and respectful manner.
Many will associate Mulally’s tenure at Ford with the strategic decision to divest non-core brands and redesign specific vehicles to cater to particular markets. However, if asked about the most crucial aspect of the turnaround, Mulally will invariably point to the creation of a new culture and behaviors, from the top down. Few leaders have embraced this challenging task as wholeheartedly as Mulally did, fearlessly and unswervingly, yet always with a touch of humanity and warmth.