Book review: American Icon - Alan Mulally and the Fight to Save Ford Motor Company
American Icon: Alan Mulally and the Fight to Save Ford Motor Company
Bryce G. Hoffman Crown Business
Pages: 422; Price: Rs 899
Ford Motor Company has seen many existential crises in its 111-year-old history. The American multinational automaker overcame each of them by launching breakout products such as Model A, Mustang and Taurus. These turnarounds were scripted by strong leaders who, however, once they tasted success, began to guard their positions, and invariably drove out worthy successors, thereby sowing the seeds for the next crisis.
The turnaround Alan Mulally, a rank outsider, scripted has put the Dearborn-based company on a different trajectory. Bryce Hoffman, a journalist who has been covering the carmaker since 2005, has captured this element very succinctly in his book. The access he had to the company's top management has enabled him to bring out the turnaround story vividly.
When Bill Ford sent a Gulfstream V jet in July 2006 to bring Mulally to Michigan and make a personal pitch to get him on board as CEO, the company was in dire straits. It had too many brands and dealers to sell cars that customers did not really want. Most cars were sold at a loss. Internal politics was rife among warring fiefdoms. That apart, labour union was dominant, global assets were hardly leveraged, production was way above demand (massive discounts were offered to sell them), the company was fast running out of cash. The Board of Directors was at its wits end, eager to even merge the company with another automaker.
The book lets you into Mulally's mind - did the conditions at Ford overwhelm him? What made him give up his job at leading global aircraft manufacturing company Boeing and take up the challenge at Ford? What were the silver linings he saw? Leaders approach challenges differently and reading the book gives a clear idea of how Mulally made his decision.
Once on board, it was Mulally's compelling vision and ruthless execution that helped him succeed. The book spells out in detail how he achieved the transformation. Matching production to demand, shuttering many factories and easing out thousands of workers, selling brands such as Jaguar and Land Rover, Aston Martin and Volvo, and massive investment on product development were not easy decisions to take, especially when the US economy was in free fall.
Equally bold was his attempt to integrate Ford globally (One Ford) by ending regional fiefdoms. Instituting his now famous weekly business performance review meetings, raising $23 billion to fund the company's restructuring just before the financial markets went kaput as well as the decision to keep Ford out of the bailout package that General Motors and Chrysler sought and got were all remarkable steps.
As Hoffman says Mulally's challenges in scripting Ford's turnaround increased by the day as the external environment worsened. Mulally, however, did not lose heart, focused on his vision and continued to execute the transformation, modifying his approach as needed.
As Mulally leaves Ford, the question is whether the tools he used to save the company survive him. Hoffman says it is the ultimate test of Mulally's revolution. He hopes the fact that Mulally chose to attack the root of the problem - Ford's corporate culture - rather than bring about the transformation with a blockbuster product as had happened at Ford in earlier generations, offers hope that the changes will endure. The book is a must read for all business leaders - present and future.
