Alan Mulally started his talk at the GSB by describing a case-study: A CEO takes over an iconic American auto-maker in big trouble, losing $17 billion a year after being one of the most profitable companies for the previous century. Naturally, it wasn’t a hypothetical situation, since it described his own position in 2006, when Bill Ford asked him to leave Boeing, where Mulally oversaw the commercial airline business, to take over the struggling Ford Motor Company.
For the most part, the students got the right answers about what to do, but they also had the benefit of 20/20 hindsight, since Ford has undergone a remarkable turnaround in recent years, and is profitable once again. In addition, getting the answer wasn’t the hard part. Executing it was. Ford sold off several struggling brands, and closed plants around the world, reducing the company’s headcount by roughly 40%, shedding more than 100,000 personnel.
It begged the question, why would Mulally, named aviation Industry Person of the Year in his last year at Boeing, leave to take over a company that, according to Mulally, “had been going out of business for 40 years?”
“I was being asked to serve,” was his simple reply. The notion of building on Henry Ford’s vision, and having the chance to strengthen one of the great business and manufacturing organizations of all time, made it impossible to say no.
In a lunch session with students following the talk, he was asked about mistakes that younger leaders make on their way to positions like his. After some thought, he shared that he sees more young leaders today for whom ’service’ is not their primary motivation. Humility is lacking in these cases, with the (often very bright and talented) individuals being overly concerned that they do what is in their own interest, with respect to career, income, lifestyle, etc. He noted that it’s understandable to some extent, but isn’t compatible with organizations that are trying to truly do remarkable things, making the world a better place for humanity.
Before his talk, Mulally had a chance to sit and share stories with Arjay Miller and GSB Dean, Garth Saloner. Arjay was the fourth Dean of the GSB, from 1969 to 1979. Previous to that, he spent 23 years at Ford, with the final ten years serving as President of the company.