A few days after Alan Mulally was named president and CEO of Ford Motor, I met a Boeing chief engineer at a social event in Chicago. Naturally, I asked him what he thought. Especially since there are those, particularly in and around Detroit, who have more than slightly raised their eyebrows about the choice, people who are saying with shock, dismay and consternation: “He’s not a car guy!” But this chief engineer said with conviction, “I’d follow Alan Mulally anywhere,” and then went on to explain why Boeing’s loss was Ford’s gain. Consider this: Mulally, as executive vp of Boeing Co. and president and CEO of Boeing Commercial Airplanes, was responsible for generating new orders and sales of $22.6 billion in ’05—a record at Boeing. So here we have a non-car-guy who made money. And if there’s anything that Ford needs right now, it is a positive cash flow like that. What’s more, given the fear, uncertainty and doubt that undoubtedly infect the people throughout the Ford organization, a leader who engenders the sort of confidence that Mulally apparently does is priceless (yes, the man is apparently going to get the sort of money that is comparatively stratospheric, but if he can do what needs to be done, it is a small price to pay).
But there’s something else to consider about my acquaintance and Mulally. They are both engineers. Mulally happens to hold degrees in aeronautical and astronautical engineering, and, yes, he does have a masters in management—but from one of the world’s leading technical institutions, M.I.T. Do engineers matter? Absolutely. Engineers are about finding solutions to problems. About finding better ways to do things. About being methodical but action-oriented.
During that same week, I spent some time with a friend who heads an advanced technology company. And yes, his firm sells products to the auto industry, as well as to many other organizations. He made a point that dovetails well into this consideration of Mulally and the industry: Manufacturing firms—and let’s not lose sight of the fact that although a big part of the solution for Ford and others is product, that product has to be efficiently, effectively and properly manufactured because the whizziest design in the world isn’t going to sell if it is simply a handsome piece of junk—don’t prosper when there are financial people in charge because the predilection of those people is to cut and save, not to make the kind of investments that are necessary to compete and excel. For far too long Detroit has been under the direction of those who are busy reading the spreadsheets and an insufficient amount of time judging the pulse of the market. Consequently, vehicle manufacturers who have dedicated themselves to finding better ways to build better products (i.e., process and product) are prospering without the sorts of marketing machinations that seem to be the primary means by which Detroit is moving metal. Investing in new technology, working with suppliers as true partners, discovering customer wants and needs—these are the kinds of things that leaders must empower their people to do. All too often it seems as though companies are skimping on technology, bloodying their suppliers (while, of course, proclaiming partnering), and trying to push products with incentives that people otherwise aren’t particularly interested in acquiring. Bill Ford, Jr., who showed his mettle by making the hard choice of stepping aside, has been talking about “Innovation” as the way forward for Ford. In the auto industry, innovation must be tangible, designed and engineered, not simply rhetoric. With someone who understands this at the helm, perhaps the Blue Oval can regain the sort of luster that it had when it put the world on wheels.