Transforming the Leadership Team
In the summer of 2006, Bill Ford, the great-grandson of Henry Ford and then CEO of the Ford Motor Company, informed his Board of Directors that the carmaker was in serious trouble. Despite his best efforts, he knew it was time for him to step aside. In a moving speech, Ford humbly and courageously advised his fellow directors that he was not the person who could save the company and asked for their support in helping him find a new CEO for their troubled business.
That’s when America’s oldest car company turned to Alan Mulally, who, as the leader of the Boeing Company’s Airplanes Group, had managed to navigate turbulent waters in the wake of the devastating consequences of September 11, 2001, by transforming the business division into a model of corporate collaboration. While many observers questioned the wisdom of hiring someone outside the automotive industry at such a critical time, Bill Ford knew what he needed most in the next leader of the company that bore his name was not automotive expertise but management savvy.
Before accepting the job, Mulally had been told by members of Ford’s board that he should feel free to eliminate any senior executives he felt had to go. However, Mulally replied that he didn’t think that would be necessary because he planned to install a team-based management system he called “Working Together” to drive a high level of mutual accountability among the executives.
When he arrived in Dearborn, Mulally found an organization that was fractured, dysfunctional, and more focused on turf battles and political infighting than delighting customers and winning in the marketplace. Nevertheless, he was confident his management system would improve Ford’s performance just as it had at Boeing.
The centerpiece of Mulally’s system was a two-part weekly session that was mandatory for all senior leaders. The first part of the session was the Business Plan Review, or BPR for short. In the BPR, each senior leadership team member gave a summary of what had happened in the previous week and what was planned for the upcoming week to move key initiatives forward. During the summaries, there was no debate or discussion, which meant there were no opportunities for the one-upmanship or backbiting so typical in the usual corporate meeting. If items needed further discussion, they were handled in the second part of the session, the Special Attention Review, or SAR.
The purpose of the BPR was to stay focused on the big picture and create a transparent environment where people listen for understanding rather than for verbal combat and, most importantly, where individuals could feel safe. This sense of safety in the BPR flowed over to the SAR, where the discussion focused on how team members could help each other solve issues rather than fighting about who was to blame. By implementing a management system that gathered everyone needed to make smart decisions in the same room, Mulally enabled a dramatic performance turnaround.
Mulally’s team-based management system broke down silos and served as the foundation for a collaborative culture that allowed all team members to understand how their parts connected to the whole as departments throughout Ford emulated the BPR/SAR meeting process. The resilience of the Ford Motor Company was a testament to the humility and courage of a great leader who knew when it was time to step aside, another great leader who knew what to do to save a dying company, and the innovative management system that restored Ford to profitability. In 2012, Ford posted a handsome profit of $8 billion.
To learn more about the team-based management system, see my new book Nobody Is Smarter Than Everybody: Why Self-Managed Teams Make Better Decisions and Deliver Extraordinary Results.