American Icon: Alan Mulally and the Fight to Save Ford Motor Company
The 2006-2010 turnaround told with close management access.
Summary
Hoffman, a Detroit News reporter, had access to Alan Mulally and to Ford's senior team during the turnaround that began when Mulally arrived from Boeing in 2006 and ran through the financial crisis. The book covers the strategy, called One Ford, and the management system, called the Business Plan Review, in operational detail.
The substantive decisions were: mortgage every asset including the blue oval trademark to raise 23.6 billion dollars in 2006, before credit markets closed, which is why Ford did not take a government bailout; sell Jaguar, Land Rover, Aston Martin and Volvo; consolidate global platforms so the same vehicle could be engineered once and sold everywhere; and cut the model range. The management change was a weekly meeting of the whole senior team, reviewing a fixed set of colour-coded metrics, with a rule that problems must be shown in red and that no one may attack the person reporting a problem.
The book is the best available account of a specific management operating system working under extreme pressure, and the detail on how Mulally changed a culture where executives concealed bad news is what makes it useful to operators. The obvious limitation is access journalism: the book is admiring, Mulally cooperated, and dissenting voices are thin. It also underweights the role of luck and timing, since the 2006 financing was completed just before the window closed and the bankruptcies of General Motors and Chrysler removed capacity that helped Ford afterwards. The debt Ford took on constrained it for years, which Hoffman treats mainly as courage.
Key takeaways 7
- Ford avoided bankruptcy because it borrowed 23.6 billion dollars against all of its assets in 2006, before credit markets closed, not because it operated better than its rivals during the crisis.
- A single weekly meeting reviewing the same metrics with the entire senior team, with no substitutes permitted, was the mechanism that made the turnaround visible and enforceable.
- Executives will conceal problems until a leader demonstrably rewards the first person who reports one.
- Consolidating to global vehicle platforms removed duplicated engineering spending that regional autonomy had made invisible.
- Divesting the premium brands freed management attention as much as it freed capital.
- A turnaround requires one plan that everyone can state, and the value of the plan comes from its shared specificity rather than its cleverness.
- Colour-coded status reporting only works when leaders visibly welcome red, since otherwise everything is reported green.
Who should read it
Executives running an operating cadence or a turnaround who want a documented example of a management system that changed behaviour in a large organisation.
Where it sits in the reference 4
Who recommended it 1 · 1 direct
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