Shortly after Alan Mulally joined Ford in 2006, he convened a staff meeting. He asked every department to prepare color-coded charts that would show him to what degree they were tracking goals.
At the meeting, he saw 320 graphs. All 320 graphs were completely green, indicating that every part of the company was on-target. No exceptions.
He told the team, “But Finance tells me that we will lose $17 billion this year. Guys, is there anything that’s not going well?”
He had given the signal that he wanted to hear the realities of the business, and with that, the company culture shifted.
At the next staff meeting, those same reports weren’t merely green, but also revealed a significant amount of yellow and red. With everyone prepared to face hard truths, Ford could actually begin to rebuild for the future.
The CEO’s practice of having painful, reality-based conversations has paid off: Ford announced profits of $2.4 billion in the second quarter of 2011. And the company has paid down $20 billion of the $23 billion debt that Mulally approved in 2006.
— Adapted from “Highlights from Alan Mulally’s CEO of the Year Acceptance Speech,” John Kador, Chief Executive.