“Alan Mulally, CEO, Ford Motor Company”

ASSIGNMENT # 3

Introduction This document presents to discuss questions posed based on the integrated cases provided in the text regarding “Alan Mulally, CEO, Ford Motor Company. The sections discussed below are based on the reference case scenario presented in the book, where CEO Alan Mulally’s leadership style and his organizational performance are being evaluated.
Discuss the role of leadership and how it can impact organizational performance.
Leadership influences organizational performance depending on the level to which the leaders enables manages and team to plan, organize, control and act effectively. It is always up to the leadership to see and evaluate the strengths or weakness of any organizations. If the company is strong in financial terms that it has got a great leader or the reverse is always true as well.
To achieve greatness, a leader must understand the human element involved, of course adding their own and carefully watch the details every step of the way. A strong leader must know whom they can trust, seek reliable information and make decisions, often without hesitation that will have an overall effect on the direction, speed and all other future decisions. Obviously, this is not an easy task to perform through the long journey but still manageable with creative strategies and hard working. In a large complex organization and environment only a 100% fully engaged human leader could hope to achieve these lofty requirements to fulfill their duties. Thus, leadership is not for everyone, and leadership is one with responsibility. A leader must be able to lead with agility, recover from mistakes from within the organization or their own mistakes; perseverance, strength of character, and boldness are therefore often-key components.
When leaders fail and there are so many ways to fail, the organization can go through chaotic situations and recover, or even come apart and self-destruct from within. When that happens, everyone loses, and if that organization is a company or large corporation, failed leadership will determine the untimely and unfortunate fate of all the vendors, lenders, customers, and employees.
Too, the vendors, lenders, customers, shareholders, regulators, employees must be on board and in it to win it, one with the goals, objectives and vision of the company. It is up to the leader to see that all this is working like a great team. In practice however, it is not the realization of perfection in processes that must be sought, rather the agreement by all players to move in that direction while achieving the goals. Flexibility, agility and the ability to adapt swiftly are what the leader must strive for while they motivate the team to work together and put in their best efforts. The role of leadership in any organization has a direct impact on the performance of the business. So with such a responsibility demanded, it is obvious to choose our leaders wisely, or we've already sealed our fate.
Discuss Mulally’s leadership style at Ford Motor Company and provide examples of how his actions fit this style.
Mulally’s leadership style at Ford Motor is mainly based on extraordinary determination with great vision. It is always true that leaders with such qualities can really make the differences in any organization. Alan Mulally leadership style is based on a great relationship behavior that participate every one in the company. He uses selling and participating style in his leadership at Ford. He provides directions, encourages tow-ways communication and helps builds confidence and motivations on parts of the followers. He tried to prove that working as a team is the right answer for great achievements.
Under the slogan “One Ford” he encouraged working as one team, with one plan in order to achieve one goal, a goal to save Ford which is an American and a global icon.
“Communicate, communicate, communicate’ is Mullaly’s slogan which he believes that everyone should know the plan, its status, and areas that needs special attention. This proves his intention and believes in two-ways communication. He also encourages participants to share their ideas during the weekly Thursday meetings. Due to the economic turn down, Ford was looking someone with a new vision looking for a new direction and achievements. So they finally managed to found out the right leader with those requirements to fill up the gap. The general goal was to move people towards a new set of shared dreams. That is what he has done by setting people free to innovate, experiments, and participate in all kinds of organizational activities for one targeted goal. He sets up high standards for performance by being obsessive about doing things better in the car industry.
Discuss how goal setting helped Ford improve its performance.
Goal setting is the foundation for personal and business success. Ford, like most carmakers, still faces a tough road. But the fact that it has not only survived the Great Recession but is also showing real signs of promise is a testament to how rapidly Mulally's leadership has turned the company around. Upon arrival at Ford, Mulally set up goals where they work hard altogether and reach.
His goal was clear and simple as this “An exciting viable Ford delivering profitable growth to all”. After setting up this clear goal, he came up with plans on how to reach and deliver the results. He aggressively worked to restructure the general system in the organization.
This includes developments of new products to attract customers. He believed working together as one team to finance the plan and improve the company’s balance sheet. At the time of his arrival the company was in verge of financial collapse but he decided to take some strong measures by maintaining the company’s independence. Even if all these action doesn’t bring the necessary results within the short period but indications are out there for better results. So therefore, his goal setting and great leadership has resulted in improving the company’s performance.
Assess Mulally on each element in communication openness including message transmission, trust, agendas and goals.
When he first joined Ford, Mulally gathered all the necessary information he was looking for about the company by interviewing dozens of employees, analysts, and consultants, and filling those five binders with his typed notes. The research allowed him to develop a point of view about the auto business that now frames all his decisions.
He is a leader who believes in open communication with all employees around him. He wants to make sure that everyone in the corporate knows what is going on around, so that everybody speaks the same language and be on the same page at the same time. “His openness has won him support thought the organization”.
This is what he also said, "When I arrived there were six or seven people reporting to Bill Ford, and the IT person wasn't there, the human resources person wasn't there," says Mulally.
"So I moved up and included every functional discipline on my team because everybody in this place had to be involved and had to know everything."
He developed a point of view about the auto business that now frames all his decisions. He created plastic cards with four goals on one side ("Expected Behaviors") and a revised definition of the company ("One Ford") on the other. (Hellriegel, & Slocum). To Mulally, it is like sacred text: "This is me. I wrote it. It's what I believe in. You can't make this shit up."
Mulally is insistent about that. "If somebody starts to talk or they don't respect each other, the meeting just stops. They know I've removed vice presidents because they couldn't stop talking because they thought they were so damn important."
Mulally instituted color-coding for reports: green for good, yellow for caution, red for problems. Managers coded their operations green at the first couple of meetings to show how well they were doing, but Mulally called them on it. "You guys, you know we lost a few billion dollars last year," he told the group. "Is there anything that's not going well?" After that the process loosened up.
Evaluate the effectiveness of Mulally’s leadership style and recommend whether he should continue with this style, or use a different style.
A leader must be a visionary and get the team on board to become one with that vision, motivating everyone to put in their best efforts, even go beyond, then harvest that synergy and foster that inertia. Having this vision in mind, Mulally exercised his leadership style to be effective by being supportive and helpful to the employees in every corner of the business. Even if some of his moves were a desperate and very hard at some points but it paid off at a later stage. Making the right moves at the right time is one of his appreciated qualities of style for success. Placing an innovative action in the industry by looking a head is also another way of witnessing his effective measures for challenging other competitive companies in the market.
When we evaluate his leadership style, the following areas are his strengths which put him to be the best and a great manager in the industry.
Having a clear plan is the base for his effective leadership. His original plan is to invest in the company long term future of the core brand sensing the recession that eventually came; he established $23 billion in lines of credit within 90 days of taking the CEO job. Those credit lines have enabled Ford to invest in new product development while avoiding the government assistance that other car makers in the US had to take.
Having a clear point of view on both his plan and the industry contributed to the business. Mulally is a very effective communicator. He speaks in a down to earth tone with a very clear point of view on his business and his plan. As an example, he says in the New Yorker interview that fuel efficiency, safety, quality and value are going to drive consumer decisions on car purchases. That's the kind of clear, concise, easily repeatable point of view that an organization can use as a guide post.
He understands the culture very well and tried to make it work with the plan. Mulally is pushing for consistency of purpose, transparency and collaboration in the management culture at Ford. He has put an end to calendar based rotations of executives into new assignments so that they have enough time to prove themselves in the jobs they're in. He is insisting that managers put their cards on the table in weekly update meetings so that everyone has the opportunity to help solve small problems before they are getting bigger.
Finally, focuses and follow ups have been part of the on going procedures in order to make that everything is moving according to the plan.
Mulally has set up clear systems that keep the management and all the team accountable to the plans. Every initiative and its major tasks are color coded as green for on target, yellow for questionable and red for a problem. This creative system has helped the company to identify, track, discuss and resolve a problem whenever they arise.
Based on the fact that Mulally has contributed to the Ford community, by proving an effective leadership style which brings a drastic change and improvements to the organization. By doing so, he further reduced unnecessary brands of cars and related costs that helped Ford to stand by its feet through the hardship time. He showed that leadership is all about encouraging others toward the goal of the organization.
So therefore, I suggest he has to maintain his leadership style and move forward for better and greater achievements in the future.
References:
Hellriegel, D., & Slocum, J. W., Jr. (2011). Organizational behavior: 2011 custom edition (13th ed.). Mason, OH: South-Western Cengage Learning. http://www.automobilemag.com/features/awards/1001_2010_man_of_the_year_alan_mulally_ceo_ford_motor_compan y/index.html http://ces.crunchgear.com/2011/01/we-interview-alan-mulally-ceo-of-ford/ http://guides.wsj.com/management/developing-a-leadership-style/how-to-develop-a-leadership-style/ http://media.ford.com/article_display.cfm?article_id=24203 http://www.time.com/time/magazine/article/0,9171,2007401,00.html