The leadership style that turned Ford Motor Company around
Thursday, October 22, 2020
This article first appeared in RealLeaders.
It’s no secret that many businesses are hurting in 2020. Transportation, hospitality, and brick-and-mortar retail outlets selling nonessential goods and services have been hit the hardest. The last time we were in a similar situation was during the Great Recession of 2008. Although the causes were different, both situations flattened revenues so much that business as usual led many companies to failure.
How are leaders supposed to navigate such tough challenges? One way is with humility.
Why does humility matter?
Leadership requires working together. A leader’s biggest challenge is to inspire others to fully engage with a shared goal, whether that’s to improve financial performance, increase safety, launch a new product, or undertake a major change. Leader humility is an extraordinarily powerful way of influencing those around you to volunteer their full support to achieving shared goals.
I define leader humility asa tendency to feel and display a deep regard for others’ dignity. Because leadership requires working together, this is a game-changer. You can still be strong and have high standards but demonstrate respect for others’ sense of self-worth.
How humility fuels a turnaround
As a great example of this, consider one of the toughest cases of performance management in business history: the rescue and turnaround of Ford Motor Company from near bankruptcy to a soaring success following the Great Recession.
The leader behind this success story is Alan Mulally, former president and CEO of Boeing Commercial Airplanes, who took over as CEO of Ford in its decline. Mulally applied a management approach he developed and used at Boeing, which he calls the “Working Together Management System™,” or WTMS™ for short.
Mulally transformed an organization that was failing—losing $17 billion the year he arrived—into a dynamic enterprise by creating full employee and union engagement with his “One Ford” plan. Under this plan, Ford became the only major U.S. automobile manufacturer to survive the threat of bankruptcy without federal bailout money.
Mulally earned the trust of jaded employees because he personally delivered and accepted nothing less than behaviors based in humility from everyone on his team. In a short period of time, Mulally galvanized a company of more than 300,000 employees, moved from failure to profitability, and was ranked No. 3 on Fortune’s World’s 50 Greatest Leaders of 2014.
When you study how Mulally leads, you see that WTMS™ rests on four prime principles: 1) embracing the leader’s most important responsibility, 2) identifying a roadmap for creating value, 3) establishing behavioral norms for working together, and 4) creating a structure and process for how you oversee the work to ensure implementation. Let me briefly discuss each of these.
1. Embracing a leader’s most important responsibility. Mulally states that a leader’s most important contribution is to hold himself or herself responsible and accountable—collectively with the team—for defining a compelling vision, comprehensive strategy, and relentless implementation.
Leaders create the container for how the work gets done: the direction, structure, and processes that determine how to work together and what the results are. Mulally sees this as the “leader’s unique service.”
2. Identifying a roadmap for creating value. Every organization exists to add value. Leaders need to guide the organization in identifying the best path to create value for all of the organization’s stakeholders. This should result in a compelling vision, comprehensive strategy, and performance goals and measures.
From there, leaders and team members can create an appropriate workstream for implementing the vision and agree on performance goals and measures for achieving the desired results. Importantly, measures need to address the interests of all stakeholders.
3. Establishing behavioral norms for working together. WTMS™ is explicit about what Mulally calls “expected behaviors.” Among these, Mulally emphasizes:
- People first. Love them up.
- Everyone is included.
- Respect, listen, help, and appreciate one another.
- Have emotional resilience—and trust the process.
- Propose a plan, and have a positive, find-a-way attitude.
- Have fun. Enjoy the journey and each other.
These behaviors reflect leader humility because they show deep regard for the dignity of others. Mulally also allows no jokes at others’ expense, noting that they’re never funny!
When a leader models these behaviors, and when others are expected to demonstrate these same behaviors, the organization becomes open, trusting, and thriving.
4. Creating a structure and process for ensuring implementation. Other expected behaviors Mulally stresses are practices for managing the work or overseeing implementation. WTMS™ emphasizes having “One Plan” that everyone is working together on. As Mulally says, “Everyone should know the plan, the status, and the areas that need attention.”
WTMS™ also uses facts and data to assess progress and move away from personalities and politics. Data can be quantitative or qualitative, as long as the data are tied to key indicators that ensure a successful implementation.
Leaders need a strong plan for how they and the team will use data to monitor progress frequently. Mulally’s approach, a weekly business plan review, works well for most organizations. However, small or nimble organizations may be able to monitor progress with less structure while still keeping everyone informed.
A rigorous system that works
The challenges we face today are no less daunting than what Mulally faced when he stepped into Ford. Having used this system at both Boeing and Ford, we know it works. It combines structure and high standards with the humility required for working together well. There’s nothing touchy-feely about this approach; it’s rigorous and demanding. But the demands come from clarity, standards, and collaboration built on trust and transparency across the team.
The only way to create an environment like this is by fully respecting the dignity of everyone. And that requires a leader who shows genuine humility—and holds everyone else accountable for showing it, too.
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