LESSONS FROM THE PAST: Good Stories That Need to be Repeated
Alan Mulally, recent past CEO of Ford Motors and previous past CEO, Boeing, accomplished miracles in both companies by bringing his leadership team together in a prescribed way and having them engage in productive discussion. In the case of Ford, it was the first time in three decades where executives had actually communicated. Over the years, Ford’s vice presidents/directors had built up strong silos surrounding their organizations and did not communicate on any important considerations. The “war room” that Mulally set up at Ford, almost 10 years ago now, depicted data on the company’s dire circumstances on its walls. In this room, he presented materials for his core leadership team to absorb: red-coded charts that showed Ford’s plunging U.S. market share, its North American financial forecast and its material-cost disadvantage; yellow-coded charts showing data that reflected the American trend of moving away from SUVs and trucks; green-coded charts showing Ford’s inroads in cutting the workforce by half through buyouts. Up until Mulally’s arrival at Ford, executives had managed their divisions in secret, rarely sharing their information with other divisions, thus causing a disconnect between the inner workings of the company. In his meetings with his leadership team, Mulally coached them to share all of their data freely even the bad showings of performance, saying that, “you can’t manage a secret.” (WSJ, 1-2-2007.) He has said that by encouraging reports of the bad news he accomplished a major feat of having his team address the yellows and the reds on his charts.
As progress was made in the changes of direction (this, BTW, is called organizational change management) and as the colors indicated improvement, Mulally encouraged celebration. The executives met each Thursday and became accustomed to applauding good news during the gatherings – something that had been unheard of in earlier times, under different management.
Effective Communication in an organization is often acquired after extensive effort, as in the Mulally case study – but it is, almost without reservation, worth the effort.

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