Fomenting Transparency

I posted this in the Unusual Connections “official blog” and I just wanted to share it here too.

I would like to share with you an inspiring anecdote told by Alan Mullaly (CEO Ford Motor Company) to Peter Day in the episode of Peter Day’s World of Business In Business “Back on the Road” broadcast on 30 December 2010. (The link seems to still be live, so click here to access the podcast.)

In “Back on the Road”, Alan Mulally, CEO of the Ford Motor Company, explains how he built a culture of transparency and collaboration which helped him to turn around the company.
He started by pulling everyone together by organising weekly virtual meetings in a room full of TV screens which linked worldwide top managers with the home team in Detroit. Every Thursday at 7am the group still meets to develop project plans, shaping the details and sharing where everyone stands in relation to the plan.

Mulally also created a system of colour-coded charts (red, yellow and green) to show the status of the projects and identify problems, all over the world. As you can imagine, at first it was difficult to get a true picture of what was going on, as nobody seemed to want to report a problem or concern, so the charts tended to be covered in a beautiful green.

The breakthrough came during the launch period of a new model. During one of the meetings, the data was pulled together, pinned up on the walls of two rooms and on tv screens, networked around the world. All covered in green. And yet, losses of 17 billion dollars were reported.
Mulally, could not but stop the meeting and address everyone and, “in the nicest possible way” (his own words) said “Is there anything that’s not going well? We’re about to lose 17 billion dollars, is there anything that’s not going well?”

You can imagine how the floor suddenly became the most interesting place on earth for everyone present in person and virtually, as they avoided eye contact.

The following week, Ford was getting ready for a launch in Canada. The data for the launch came up: all red. The tension could be cut with a knife. To everyone’s surprise, Mulally started clapping and addressed the project leader: “That is fantastic visibility. Is there anything we can do to help you? ‘Cause we know you’re working on it.”

And soon the other managers started to contribute to the solution by pointing out issues they’ve addressed before, similar problems they had solved themselves and offering other  suggestions.
Week by week the project charts became yellow, then green. And then all 320 charts became “like a rainbow” full of reds, yellows and greens. A true picture of what was going on in the company.

This is an inspiring story from a CEO ready to hear both good and bad news.From someone who truly believes that  a culture of transparency and collaboration can only be created by acknowledging that, at some point, things will not go according to plan and from someone who fully understands how to show true support during tough times to make sure the business moves forwards.

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