Interview Alan Mulally - CEO of Ford Motors and Boeing

ANR Newsletter #44

The Jack Welch of Our Times; One of The Best Project Leaders Ever

Good Day and Welcome Back!

I hope you had a splendid and relaxing summer period.

There is no better way to start the “back to work period” with one of the most formidable leaders I have ever come across: Alan Mulally, for many considered the best CEO in US recent history. For me, the Jack Welch of our times.

I’ve researched for years’ projects and talked to thousands of project managers, but have never come across someone like Alan’s career. From engineering project manager to CEO of two of the largest corporations in the world doing a remarkable work in every job he carried out.

I wanted to find out more about him, his experience, his methods and his suggestions for us to become better managers and project leaders. One of the quotes that stuck with me is:

“the reason why I’d want to support you is you dedicate your life to programme and project management. I really think it’s the future because it’s going to be business and projects that actually keeps us moving forward by making products and services that people want and value.”

You can find the full interview on my youtube channel and the written version here. Hope you enjoy it and learn from Alan’s unique wisdom. It is truly inspirational; a free lesson for every leader, not too be missed.

Keep well and stay focused.
Antonio

Project Management Champion to the World

Interview with Alan Mulally

The Future is about Projects and Project Management

Alan Mulally is an American engineer, programme manager, business executive, and former President and Chief Executive Officer of the Ford Motor Company. He retired from Ford Motor Company on July 1, 2014. Ford had been struggling during the late-2000s recession, returned to profitability under Mulally, and was the only American major car manufacturer to avoid a bailout fund provided by the government.

Alan’s achievements at Ford are chronicled in the book, An American Icon: Alan Mulally and the Fight to Save Ford Motor Company by Bryce G. Hoffman, published in 2012. On July 15, 2014, he was appointed to the Google Board of Directors.

Alan was the executive vice president of Boeing and the CEO of Boeing Commercial Airplanes (BCA). He began his career with Boeing as an engineer in 1969 and was largely credited with BCA’s resurgence against Airbus in the mid-2000s.

More about Alan Mulally:
en.wikipedia.org/wiki/Alan_Mulally
web.archive.org/web/20070219051013/http://media.ford.com/article_display.cfm?article_id=24203
www.forbes.com/sites/siimonreynolds/2014/02/13/notes-on-the-worlds-best-ceos-alan-mulally/#5e8e925e18bc

Alan, it is such an honour to have you, thank you so much for being with us today.
You’re welcome Antonio, and I’m pleased to be with you, and I’m also an admirer of your work to capture project and programme management.

Thank you. Alan, everybody knows what you’ve achieved, but when you were a kid, did you want to be the CEO of Boeing and then later the CEO of Ford Motors?
Well, one of the things I wanted to be was an astronaut. When I was in high school, Bruce Porter College, President Kennedy announced that we were going to go to the moon, and they were looking for some people with the right skills to go to the moon. And it was very compelling to me because he described the things we’d learned by going to the moon, technically, but also the things that we’d learned to help make life better on earth.

So I joined the air force and I learned to fly. I found out that I had a colour blindness, which disqualified me, because the first lunar landings were going to be manual. So I finished my education in aeronautical engineering and then I found my dream to go to work as an aeroplane designer at Boeing.

And you made your whole career in Boeing?
Yes, I had the honour to serve on the design team for every Boeing airplane: the 707, 727, 737, 747, 757, 767. Then they asked me to serve as the chief engineer and the programme leader of the 777 airplane. And then as the CEO of Boeing, I helped launch the 787. Over 60-70% of all the seats that are flying today are in a Boeing airplane. It’s quite an honour to get people together around the world.

What an achievement Alan! That means that you’ve been leading projects a big time of your career. What kind of approaches you were taking at Boeing? Can you tell us a bit more about that?
Oh, sure. I’ve summarised all the lessons I’ve learned on the simple document that I sent to you.

And it’s titled, “Skilled and Motivated Teams Working Together, Principles and Practices”. Everything that I’ve learned over the last 37 years at Boeing, and also eight years at Ford, are on the one piece of paper. The big points are to include everybody, it’s all about people. It’s kind of really saying love them up, appreciate them so much, because you have all these talented people around the world that are working, everybody needs to be included.

Come together around a compelling vision for what the airplane or the programme or the business is, a strategy for achieving it, and also a relentless implementation plan, and that’s where the business plan review comes from. Then, of course, clear performance goals, having one plan, using facts and data, and the biggest one, Antonio, probably is that everybody knows the plan, everybody knows the status, and everybody knows the areas that need special attention. And that’s where the business plan reviews comes in.

And then, of course, the behaviours of positive, can do, find a way attitude, respect each other, help each other, appreciate each other, maintain your emotional resilience, and also have fun. So enjoy the journey, what you’re doing, and enjoy each other, and a corollary to that last one is never humour, Antonio, at anybody else’s expense, because what happens is that people will go along to get along.

You set also quite ambitious goals, is this how you get people focused? and put a bit of pressure, which I guess is always good?
Well, I think so and it’s really kind of a positive pressure too because, for example, on airplanes, when you design a new airplane, a commercial airplane has around four million parts. And you take the 777, it’s the most sophisticated product in the world because it carries 200 to 300 people halfway around the world.

It’s the safest transportation system ever. And, of course, you actually make these commitments to the airlines and the traveling public, and then you deliver the performance, the reliability, the maintainability, the predictability, the affordability. You deliver all those commitments on a schedule, five years in advance.The airlines are actually paying the progress payments along the way, they already have the tickets sold, they have their routes all in place.

So you’re actually creating this four million parts in this airplane on a schedule that is like scheduled programme management innovation. So that’s a pressure in itself, but on the other hand, you can imagine what that does to enable talented people to actually work together to create these fabulous products.

Alan, two additional features I noticed in some of your videos:
a) you go deep into the details: you have the experts, but you understand very well the business, both in Boeing and later on in Ford.
b) you have a strong business sense: you look at figures, financial, budgets, profits, something that we project managers don’t do very often. We are focusing on deliverables, but we miss that business part.

Can you tell us a bit more about these two aspects?
Oh, sure, I think that’s a great question, especially the way you asked it because just starting at the basics, the fundamental of business is to deliver profitable growth for all the shareholders, all the stakeholders, not just the shareholders, but everybody associated with the enterprise. So that like in Boeing’s case, or Ford’s case, the people that drive their vehicles or ride on the airplanes, the customers, the airlines themselves, the Ford stores around the world appreciate your products and services.

Also the investors, all your partners, your suppliers, all the employees, so the only way to have a viable business and a sustainable business is to create a business that is growing profitably, because then you get to continue to make the products and services that people want and value, and you keep improving your quality and productivity every year, so what’s neat about is it’s just a design job, right?

All we’re doing is creating a viable business just, like we’re creating a viable airplane or cars and trucks. So it’s not just me that knows it, but everybody on the team knows where we are on the plan to deliver profitable growth with our products and services, and that we are creating a business that’s sustainable, that’s going to provide great jobs for a lot of people, contribute to the economy, and contribute to energy independence, security and sustainability.

Alan, at some points in your career you had to lay off people. I heard that you try to still make it in a nice and positive way. Yet, it is probably one of the most difficult parts of your job; what is your approach?
It really, is because when you work together this way, you become very close with each other.

I mean, a lot of respect, of course, it’s based on respect for people and respect for each other and enjoying each other. The thing that I found is the most important thing is to be transparent and as honest as you can about what the situation is. For example, at Boeing, when we had the terrorist attack of 9/11, none of us ever thought that a commercial airplane would be used as a weapon. No one imagined that.

It completely changed our world, and those are Boeing airplanes that were involved. And, of course, the travel degraded tremendously after that because people were concerned, and so our production at Boeing actually went from over 680 airplanes to maybe 240 in the following year. And no company that I know of can keep going with that kind of a throughput crash. So we shared it with everybody, we had to match our production to the real demand.

And as you pointed out, the only way to save the company was to reduce all of our expenses, including a lot of the members of our team. On the other hand, because we did that, we saved the company. We actually continued to invest in new products, and so now we’re able to hire our employees back.

If you don’t match your production to the real demand, then you will go bankrupt and you’ll be out of business.

So as hard as it is, I just found that sharing it with everybody, and with compassion and thoughtfulness and empathy, and help people find other jobs and move on with grace, and then be able to come back later and do what they love doing.

Alan, can you tell us a bit more about the Boeing 777 project? I understood that you made part of the project design team the main stakeholders, including customers and suppliers, a quite innovative approach.
Absolutely. One of the reasons I believe that Boeing has been successful over the years is that on every airplane programme, and especially on the 777, we’ve always included the airlines – our customers – in the actual design of the airplane.

Because they have so much knowledge about how to operate the airplane, and how it’s going to be used, and their reliability requirements, and the maintainability requirements, and how they’re going to take care of it, how they’re going to fly the airplane, how they’re going to maintain the airplane.

So we actually invite the airlines that want to participate in the launch of the aircraft to join the project team. And it’s really funny, Antonio, because at first, some of the airlines will say, I don’t want to be in the same room with our competitor. And if I’m going to share a lot of my knowledge with you in front of the competitor, is that going to put me at a competitive disadvantage?

I remember one of the airlines in one of the early meetings. We had 12 of the world’s best airlines in the same room. And one of the airline leaders said, okay, here’s the deal, we want to help Boeing build the best airplane in the world. When we get that best airplane in the world, because we’ve all contributed to it, then we can complete as airlines.

But what we want, all of us, is the best airplane, and that just broke the ice. From then on everybody was willing to share their ideas, from how the airplane operates, how we fly the airplanes.

The depth of the knowledge that we’re able to incorporate in our innovations by utilising all of the airlines best practices around the world, actually resulted in the airplane being what it is today.

What was the most difficult part in that 777 programme? What was the thing that was the toughest to come through?
I really don’t think of it in those terms, Antonio, because when you operate with these principles and practises, it’s all out in the open. So it’s not a problem, it’s a gem when somebody has an issue.

It’s a gem because now you know what the issue is and you’re also recognising that this an invention. It’s going to be iterative process, and that’s what engineering, design, manufacturing are about.

It’s almost like you’re legitimising the process of project or programme management. Not all is going to go right on the plan. And we have a process to uncover the areas that need special attention. It is critical as a program leader to create a culture where everybody is able to share the areas that need special attention. Which will get solved by working together as a team.

So we can’t wait to get to the business plan review every week to see what we need to work on, because now we know that issues are part of the process.

Amazing. We project managers tend to look at issues in a very defensive way. Yet, the way you look at problems is so fresh and so constructive.
And I believe that’s what programme and project management is about.Admitting that there will be challenges and changes – as the project is about innovation – but together we are going to solve them.

You can now see, whether it’s a project or whether it’s managing a business, whether it’s Boeing, whether it’s Ford, whether it’s your personal or family life. I mean, it’s all going to come together if weadopt working together principles and practices and come together on that vision, the strategy for achieving it, and then that relentless implementation plan, where we deal with the issues and turn the reds KPIs into yellows and into greens, while delivering all of our commitments on plan.

I love that. I think this deserves a book 😉
There have been a lot of things written about it, and you have authored a number of them, so I think the reason why I’d want to support you is you dedicate your life to programme and project management. I really think it’s the future in this business because it’s going to be business and projects that actually keeps us moving forward by making products and services that people want and value.

Alan, how do you take this approach to Ford, a very different business and different culture from what I’ve read, very different culture?

Antonio, here’s what I did: implemented my “Working Together Principles And Practices”. The same piece of paper that you have, it’s the only piece of paper that I took with me to Ford when Bill Ford called and asked me to join.

So I started right at the top, I got all the team together, selected business unit leaders from around the world, Asia Pacific, Europe, United States, and North and South America. And then we started the business plan review, we came together around a compelling vision, and we actually decided on Henry Ford’s original vison of opening the highways to all mankind, of making the best cars and trucks in the world, and making them available to everybody.

And then we agreed on a strategy for achieving it, so we focused on the Ford brand, we divested all the other brands that we had. We agreed that we’re going to have a complete family of vehicles, from the Fiesta, the Focus, the Fusion, the Taurus, the Mustang, the Escape, the Edge, the Flex, the Ranger, the F Series, the E Series, that Transit and the Cargo. And that set of vehicles, that family, serves all the markets, small, medium and large cars, utilities and trucks around the world.

We also agreed that every Ford vehicle, from when I got there on, would be the best in class in quality, fuel efficiency, safety, smart design, connectivity, and we agreed we’re going to size our production to the real demand. We took out a “small home improvement” loan of $23.5 billion to finance the restructuring, but also to invest in all the new cars and trucks.

And most importantly, we agreed that we’re going to work together as one team, worldwide, all the Fords around the world are going to come together around one Ford, with one team, and one plan to deliver profitable growth.

What was the reaction of the management team at the beginning Alan? How did they react to your leadership principles?
Well, clearly we spent a lot of time, Antonio, talking about these principles and practices.

What I have found over the years, the most important thing is to spend the time to really understand, not only the process of programme and project management, but also the behaviours that we are going to expect of each other, the way we treat each other. And so what I found is all you have to do is start the business plan review every week, everybody is there, everybody is starting to show their part of the plan, the status against the plan, and the areas that need special attention.

And then they colour code them. But in Ford, they didn’t know what that’s meant, Antonio. How do you colour code a red, because in the Ford culture, like a lot of companies, you never bring a problem to your supervisor unless you have a solution. So now, as Deming would say, you’re managing a secret, you have no idea what’s going on. So we got down to about 300 charts, with our 12 members of our team, and it’s going pretty well except all the charts are green!

And they know now, and I know, because we’ve shared it, that we’re going to lose $17 billion for the year on profits. I know. And so I stopped the meeting one time and I said, so, you guys, you know we’re going to lose $17 billion, is there anything in your area of responsibility that’s not going well, that there’s a problem? And, of course, the eye contact goes down to the floor. Well, a couple of weeks later, the leader of the Americas had a problem with an actuator on the lift gate of the new Edge that was being launched in Oakville, Canada.

He stopped the production, like we agreed to. Only the finest quality would be delivered, and then he switched the colour on his launch chart KPI’s to red. Red for financial impact, for functionality, and for schedule compliance, red, red, red. So the next day, the business plan review, everybody’s connected worldwide and up come this red chart. I mean, the air was sucked out of the room. So Mark said he has this problem, he doesn’t have a solution yet, but we’re working on it.

So I started to clap, and everybody in that room, Antonio, knew that was a sign that two doors behind me were going to open up, two large human beings were going to come in, and extract him from the meeting because he had a red KPI. I said, Mark, that is great visibility, what can we do as a team to help you out right away? Derek Cusack, who was leading engineering said, no, I’ve seen that issue on such and such, I’ll get that data over to you right away.

Same comment from Bennie Fowler, who was leading quality worldwide, and then Joe Hinrichs, who was leading manufacturing said, you know, you’re going to need some manufacturing engineers in Oakville to switch out the parts and get it going again. I’ll get the identified and get them up to Oakville right away.
That took eight or nine seconds, and were on to the next KPIS: green, green, green chart, next week they’re all green again except for his one red chart. A couple of weeks later it turned to yellow, they had a solution, a couple of weeks later it turned to green, then all the vehicles started flowing around the world.

Guess what the KPI colours of the 300 charts looked like the following week? Not all red I tell you, because there’s always a lot of things going well, as you know, in programme management. But it looked like a rainbow, and right there, Antonio, they knew, and I knew, that we were going to trust this process of working together, and these principles and practices, and we’re going to treat the issues as gems, and work together to turn the red KPIs to yellows to greens. We were on our way.

Wow. It’s was like the tipping point when this happened, no?
Exactly. And whether we had tsunamis in Asia Pacific, where half our production was under water, or the bankruptcy of our major competitors, GM and Chrysler, or whether the worst financial crisis we’ve ever had in the United States since the recession, that we knew that if we continue to work together and meet every week and shared the plan, the status and everything that needs special attention, that we were going to be okay

We were the only ones that did not ask for or take precious taxpayer money during the worst financial crisis we’ve ever had.

I love these kind of weekly meeting where you get all together. I heard that from Steve Jobs, he was doing that in Apple too. It was like something that puts people together, transparency, not hundreds of meetings, but just one very good one.
That’s really a good point, Antonio, because it’s not to solve the problem in the business plan review. It’s to ensure that everybody’s at the table, everybody is sharing their contribution, their plan for the overall plan, and that everybody knows the areas that need special attention.

Then we have four other meetings that will run one a week that will deal with the areas that need special attention, where we work the issue, get the decisions made, and then they’ll get incorporated in the business plan review.

I don’t know very many people that do that or appreciate the power of that, and you want everyone on the team, it only takes two hours.

And we actually invite guests, Antonio. We invite guests to sit around the room, where we are, and also in all of the conference rooms around the world where everybody is networked in, so they can see it. They can see their part of it, and then they can help cascade that up and down through the entire organisation.

I just get so excited from what you say Alan because just make leadership transparent, you make the business transparent. Usually, there is so much secrets, hidden agendas, politics, yet, you take a completely different approach. I can imagine this is part of how you reach to the whole company, and why people at Ford loved you, people at Boeing loved you.
Absolutely, Antonio, it goes back to that very first principle on the working together principles and practices, people first, and that’s code for love them up.

These are human beings, they’re talented, they want to contribute to making a cathedral, not just to get a salary,and they want to be appreciated for their great work, and they really want to know what is the plan, where are we on the plan, what can we do to help each other accomplish this compelling vision. I think it’s the most respectful thing you can do as a leader and a leadership team is to create this environment.

It’s not only smart, but it’s also very healthy, because all the politics go away, everybody’s concerns go away, because now you’re celebrating the issues in a positive way, and you’re making progress on creating whatever your compelling vison and the cathedral that you’re making.

Alan, last question, because I could spend hours talking to you, it’s so insightful. What would you recommend to a project manager or an engineer who is doing projects, what kind of skills do they need to develop to have a career path like yours, to keep growing and becoming future exemplary leaders.
I think appreciating the way we all grow up in our lifelong learning.

We usually have selected a technical or a functional path. It could be engineering, it could be manufacturing, finance, legal, communications. Then over time, there will be opportunities for us, and people will want us to lead multi functions. My first piece of advice is be the very best that you can be in your functional discipline, and then keep looking about how your function fits into the overall business.

Because it really is these talented people, with these diverse backgrounds and diversity on their functions, so be the best you can be, and then lifelong learning over, every year learning and getting better and better. Then look for the opportunities to help integrate the functions, and that’s where you’ll get into supervision, into management, and just appreciate how the functions work together to create something that no one function can do by itself.

And then really get in tune with what the leader does. The leader is not going to be the expert in any one if those functions. The leader now is going to turn their attention to what we’ve been talking about, what is the compelling vision, what’s the strategy for achieving it, what’s our relentless implementation plan, how do you run a business plan review. It’s not you talking, I talk the least in a business plan review, because I’m facilitating the meeting, I’m ensuring that everybody is listening, paying attention, they’re following the behaviours.

We’re getting the issues out in the open, we’re getting them on schedule into special attention, and that is a leadership skill that every one of us can learn, and it’s not widely taught. So you combine that with fundamental programme and project management skills, and you can use it, whether it’s a project or a programme or it’s a business or it’s a CEO or it’s countries working together, those principles and practices of working together are good for everything.

That would be the things that I would stress if you like doing this kind of work and it is really fun as you know.

Well, Alan, I don’t want to take too much time. I see when I listen to you, you know, in the 1990s and 2000s the people were talking about Jack Welch, at GE. What I see is that today’s leader, today’s CEO, it should be like you, Alan. Your style and your approach is the future. Putting people first and together, being transparent, creating a competitive yet healthy culture, being focused on execution. You should be considered the Jack Welch of our times.
Well, Antonio, that’s very nice of you to say. A few things I learnt from my mother, one is the purpose of life. She used to tell me every day, now, remember, the purpose of life is to love and be loved, in that order. And then the next day, Antonio, she’d say, well, remember that, you know, to serve is to live. And then the next day she’d say, well, honey, it’s nice to be important, but it’s more important to be nice. So it really is about talented people working together and, you know, doing something for the greater good.