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The CEO who spotted too much progress being made

As a non-executive director for businesses operating across the East Midlands, I attend a lot of board meetings.

Those in a similar position will know that the healthiest and most productive gatherings involve the free exchange of ideas combined with constructive challenge from those around the table.

That was not the situation which greeted Alan Mulally as he arrived as CEO at Ford in 2006. The company had lost much of its market share and was months away from running out of cash.

By the time he left, in 2014, the company had been reporting profits for five years. Its stock price had jumped significantly. McKinsey described it as one of the most impressive corporate turnarounds in history. So what happened?

One contributing factor is suggested in an interesting case study in a 2016 edition of the Harvard Business Review that was recently shared with me. It makes the point that the challenge Mulally faced was not just financial - it was cultural.

As CEO, he knew that he had to get his management team working more collaboratively. Therefore, he introduced regular Business Plan Review (BPR) meetings for several levels of executives to gather and share updates on their units.

A RAG system was used to quickly assess and review Ford’s overall performance on a variety of initiatives. Mulally hoped the meetings would help identify issues before they became intractable. Meanwhile, the format would encourage executives to share ideas and support one another. He also wanted managers to take personal responsibility.

But there was a problem. During initial first meetings, all the charts were green.

The HBR case study describes how executives were afraid to speak up about problems. They worried about displaying any sign of vulnerability. So Mulally pushed back.

Eventually, a few executives started speaking up - so their leader praised them for their transparency. In time, others realised that being honest allowed them to work together and find solutions more quickly. The RAG charts started to reflect what was really happening in their units.

So how does all of this relate to 2021?

I think that part of the answer is that there is already an expectation of such inclusivity from modern leaders - both in the boardroom and the senior leadership team.

For example, this was shown in the themes that emerged as part of the CMI’s Management 4.0 campaign. Launching its discussion paper around the identified theme of ‘Leadership Transformed’, the CMI asked: ‘With command-and-control styles of management becoming extinct, what skills and attributes will tomorrow's leaders need to thrive?’

The CMI concluded that the way in which management is practised had been transformed. And that was before the acceleration of trends seen across sectors as a consequence of the pandemic.

It led me back to the question for businesses of whether their management teams - and their boards - have leaders of similar vision and collaborative instinct to Alan Mulally and the executives he inspired to drive their organisation forward?

We can help with this. ER Recruitment provides modern executive and non-executive directors to boards and leadership teams across Leicestershire the East Midlands. For a confidential conversation about how we can help to transform your organisation’s thinking, give me a call on 0116 254 9710 or email [email protected]


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