Alan Mulally arrived at Ford in September 2006 from Boeing, where he had been the engineer in charge of developing the 777 airliner. In the car business he was an outsider. Ford was losing money fast: $12.6 billion that year, by Fortune’s count.
He drove performance the way he had at Boeing, with a weekly Business Plan Review. Every Thursday morning his direct reports sat around one table, the heads of the business units and of every function, human resources and IT included. “Everybody in this place had to be involved and had to know everything,” he told Fortune. Each executive reported on their plans in color: green for on track, yellow for caution, red for a problem.
The charts came in green. By Mulally’s account to Fortune, managers coded their operations green at the first couple of meetings, to show how well they were doing. Ford’s management culture, as Fortune described it, ran on sharp elbows and turf battles, and the tough guys won.
Mulally called them on it. “You guys, you know we lost a few billion dollars last year,” he recalled telling the group. “Is there anything that’s not going well?”
Mark Fields, who ran Ford’s business in the Americas, went first. The new Edge sport-utility vehicle, due at dealers, had a technical problem with its rear liftgate and wasn’t ready for the start of production. He put it up in red.
“The whole place was deathly silent,” Mulally told Fortune. Fields, speaking to Bloomberg Businessweek years later, remembered “a lot of tension in the room.”
“Then I clapped,” Mulally said, “and I said, ‘Mark, I really appreciate that clear visibility.’” In the version he gave Bloomberg, he also asked whether there was anything the group could do to help.
The next week, by Mulally’s account, “the entire set of charts were all rainbows.” A Michigan Public report put the change at two weeks after Fields spoke up, when everyone followed suit.
By 2009 the reports lined the walls of two adjacent rooms Mulally could walk into during the week: 280 performance charts, sorted by area, each with a photo of the executive in charge. The board saw a subset of the same data. “Communicate, communicate, communicate,” Mulally wrote in a note to Fortune’s reporter. “Everyone has to know the plan, its status, and areas that need special attention.”
Fields became chief operating officer in late 2012 and began running the executive meetings. On July 1, 2014, the executive who had shown the first red chart succeeded Mulally as chief executive.