Ford CEO stresses roots, creativity

Feb. 4, 2011, 2:15 a.m.

Alan Mulally, president and CEO of the Ford Motor Company, has a lot to say about leading a business. Since Bill Ford handed him the keys to the then struggling car manufacturer in Sept. 2006, Mulally has led the company’s share price to a nine-year high, while GM and Chrysler, its two main domestic competitors, went bankrupt and were bailed out by the government.

But yesterday, speaking at the GSB’s “View From the Top” lecture series at Bishop Auditorium, Mulally, armed with a notepad and pencil, was there to listen.

Ford CEO stresses roots, creativity
(KOR VANG/The Stanford Daily) Alan Mulally, CEO of Ford Motor Company spoke yesterday at the GSB. He drove home several points, including persistence and innovation.

“Let’s do a case study on Ford. I’m looking for a few more good ideas,” Mulally said. “This is Stanford. We’ve got the smartest people in the world. What are we going to do?”

When Mulally arrived in Detroit in 2006, after a successful career at Boeing, he inherited a company that was projected to lose $17 billion that year. Ford, Mulally said, was a regionalized “house of brands,” with no comprehensive strategy, no scale and no global integration.

“We were unprofitable in every one of those brands, and on every model we were losing money,” he said.

As audience members began rattling off turnaround plans, Mulally repeatedly commented on the stunning simplicity of the ideas that fueled Ford’s return to profitability.

The MBAs in the audience suggested investments in R&D, repositioning and simplifying the Ford brand, figuring out what customers want, lowering reliance on incentives and cutting dividends. Turn by turn, Mulally would chime in with a “really” or a “wow.”

These ideas felt like no-brainers. But putting them into action in Detroit, at a company with 100 years of history and a variety of entrenched interests, was not as easy.

“I would propose to you that everything you said is about leadership,” Mulally said.”Because every one of those is a courageous decision.”

To really turn Ford around, Mulally said, the company had to move back to its roots, and attack the auto market with the same discipline and creativity as Henry Ford showed 100 years ago. Mulally spoke passionately about Ford’s ability to continue to play a global leadership role today.

“We are a key part of the solution for economic growth, but also environmental sustainability and energy security,” Mulally said.
First, however, Ford needs to continue doing what it has again begun doing so well–selling cars. Yesterday, Mulally made it clear that he is attuned to that mission.

“I’ll be outside after this to take your car orders,” he quipped. “We’ve got some great vehicles for you.”

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