David Novak 0:04 

Welcome to How leaders lead where every week you get to listen in while I interview some of the very best leaders in the world, I break down the key learning so that by the end of the episode, you'll have something simple you can apply as you develop into a better leader. That's what this podcast is all about. Today's guest is Alan Mulally, who served as the CEO of Ford Motor Company during their incredible turnaround. And I really do mean, he served as the CEO, see, in Alan's words, to serve as the live. And let me tell you, that's not just a warm, fuzzy philosophy, his service center style of leadership really gets results is how he motivates people to actually work together towards a common goal. And it's how he led forward through one of the most extraordinary turnarounds in business history, from operating at a $17 billion loss to making $9 billion in profit in just two years. That's just unreal, because he had to turn around this big ship and get it moving in the right direction. And he did it so fast. It's just amazing. So if you want to learn how to get people working together, then you're going to love all the incredible insights and stories Alan shares today. Let's jump right in. Here's my conversation with my good friend, and soon to be yours, Alan Mulally.

When you write your signature, as I understand it, it's your name in cursive. And then you have a little cartoon airplane with a smiley face on it. When did that start? Tell us that story.

Alan Mulally 1:43 

One point in my career, I had the fortune of as you know, as serving on the design team of every Boeing airplane, the 7072737475767. And then they asked me to serve as the chief designer, the director of engineering, the program manager for the triple seven airplane, which everybody around the world believes is absolutely the best airplane ever designed point to point nonstop halfway around the world. So when I was leading the engineering, the salespeople would always invite me to go with them around the world, and explain to our customers to give them an update on the airplane as design. So one time I was in Guangzhou, China, and I was talking to China Southern Airlines. And we were sitting around the table. And so I gave my presentation. If what I usually do after a presentation is I'll sit down and then I'll draw my airplane. And it has the body and it has the horizontal tail, the vertical tail and the landing gear, and the smiley face and two eyes like the cockpit. And so I finished my presentation in China Southern, I sat down, I drew my airplane. across the table. David is the chairman of China Southern Airlines. And he stops the meeting. He puts up his hands, he says, Ah, Mr. Mullaly, that's your sign. That's your being? That's your chop? I said, Well, yes, yes, sir. I live to to help design the finest airplanes in the world and serve the greatest airlines in the world to get people together around our world. I said, What do you think? And he said, Well, I mean, I want you to sign this $20 billion contract with that airplane signature in that drawing. Because this is the biggest decision that we'll ever make as a company as an airline. That's true with every airline. So I, I smiled, and I turned around to the contracts and the lawyers. And I said, So what do you think about the chairman's request? And they said, Mr. Wiley, you can't sign a $20 billion contract with a doodle of an airplane. As I turned around to the chairman, David, I said, I said, What do you think now? And they said, he said, I'm only going to sign this contract, if you sign it with that airplane, because you and this Boeing team, and all your suppliers, everybody else, led by you, is the future of our airline. And I that's what I want to show everybody how much you how much you care. So I turned around the lawyers and I said, So what do you think now? And they all said almost, and you said, you know, Mr. Milan, we really love your airplane. And never ever since then, David, every contract that I have signed for the rest of my 45 years, and even at Ford when I went from Boeing to Ford, they all wanted to make a car but they kept making the drawing so complicated. I couldn't do it quickly. So then they said, Okay, we want you to sign it with that same airplane because someday we're gonna have flying cars. So we'll use the same one.

David Novak 4:51 

I love it. Well, you want up me I always signed everything that I did with a little smiley face. And you know, what do you think that says about your leadership Allen?

Alan Mulally 5:00 

leadership is really about pulling everybody together around a compelling vision, a comprehensive strategy to achieve in it, and a relentless implementation plan. develop those values early on when I was growing up, because that's what my parents taught me to serve is to live. My mom every day on my way to school, she say, I remember honey, the purpose of life is to love and be loved. And I go, Oh, yeah, Mom, I know, I remember that. And and then she say, but remember, in that order, oh, yeah, mom is good. Next day, my dad would stop me and say, Remember honey to serve is to live. Next day, one of them would say, now remember, learning to work together with people, you're going to be able to make the biggest difference for the greater good around the world. And I grew up in Lawrence, Kansas. And so the University of Kansas was my window to the world. And my mom worked up there, but I didn't have any resources, I was hoping, you know, I just want I'm just a normal kid, I wanted a pair of Levi's, and some Weejun shoes, and, you know, maybe a bicycle in the car someday and be able to go to university Kansas. So I just started implementing those values about serving. And I had all these different jobs. And I realized, holy cow, in addition to seeing the smiles on the faces, whether it was lawn mowing, whether it's at the grocery store, or whether it was on the, on the farm on the ranch, helping all the professors and engineering all the way through college, not only the smiles on their faces, but they would compensate me for it. David Coleman going, Holy cow,

David Novak 6:38 

I gotta ask you, though, you know, you put this little plane on your, your signature. And, you know, you go to MIT, I mean, you're a brilliant guy, you're working your way up through, you know, Boeing, you get the big leadership role. And then you sign your name, like, when do you get the confidence to be be you and to do something like that?

Alan Mulally 6:58 

When I joined Boeing, you know, I had my values and my formation. And as I explained to you, and I really believed in people I believed in working together, I love the dignity of others, you know, getting to know everybody around the world to the University of Kansas was, was phenomenal. But when I joined Boeing, Boeing, was probably the best large scale system integrator in the world. But they were very disciplined, a lot of command and control. And that's just the way it was, he was, you know, a result of the Industrial Revolution and the way people were leading. And so we had a change in the CEO and the chairman, not very many years after I joined. And that new chairman and CEO, realized that he wanted to go ahead and move the company, to a working together company, where people were were loved up, they were treated with respect, they made it psychologically safe, so that could share what the real issues were. And so that's who I was. And that Chairman pulled me aside, and said, Okay, Alan, now I know that you know how we are right now. But this is where we're going. And I want you to continue to be you. And I know some people might go after you for for this working together. Philosophy you have. But I want you to know that that's where we're going to take the company, and I really want your help. So in a way, the whole environment enabled me to bring what I love about working together with talented people to create value for the greater good to be able to do that, with my enthusiasm.

David Novak 8:33 

You know, you worked at Boeing for more than 30 years. And I'm going to come back to that in a bit. But you get this call in 2006, asking you to become the CEO of Ford. How did you think about that opportunity as a leader?

Alan Mulally 8:48 

It's very interesting, because I was very fortunate to be offered a number of CEO positions when I was at Boeing. But I always loved Boeing. And I had a couple more airplanes that I wanted to help launch for, for the good of the world. And, and then I get this call from Bill Ford. And I'm going Bill Ford, the great grandson of Henry Ford. And holy cow, David, as you know, I mean, if you're into technology and safe and efficient transportation and changing the world, I mean, Bill Ford is one of our heroes. And I had a Ford vehicle. The first vehicle I had was a Ford vehicle. And so it changed my life again. So I knew I was in trouble with Bill, because I didn't say no, because he asked me, he told me what the situation was. And he's really a neat person. He's really a neat leader. And he's, of course the head of the Ford family, leading the Ford Motor Company. And he shared everything with me. I mean, everything. And the more he shared with me, the worse it got. I mean, they were only a few months away from bankruptcy. And they had purchased Aston Martin and Jaguar and Land Rover and Volvo and yet 70% of the business was Ford. And they had walked away from Ford this phenomenal brand. It Oh, and one of the things I asked him to David, I said, so this is like, a little bit close to the fourth quarter. And I said, So, Bill, what's your forecast for profits for this year? 2006? They said, Oh, our forecast is a $17 billion loss. I said, Oh, and if so, so I said, getting back to your question. So I thought about it. And I thought about it, and, and the kids all knew everything, about Boeing, they knew all the airlines around the world, they and so they were lobbying me to go help save Ford. And because they just wanted to drive a, you know, a new Mustang. So and so it gets to meet all these new people. So it got down to the to the fact that I thought about and thought about talking to all my friends like you do, the most important thing is you check in with yourself and everybody else and and I decided that I was going to stay at Boeing, I actually told Bill then that I was going to stay because one more airplane that I wanted to, to help release. And I got off the phone, I'm sitting in my little office where I am right now. And three of the five kids came in and they said to me, they looked over over they said, So Dad, we're going to Ford our way. I said, Yep, we're going to Florida. Because Because I knew what I was thinking. And so the question that you're asking is really key. Because at the end of the day, this is Boeing and Ford. These two companies are the reason that we're free. They saved us and World War Two is they pulled together. And they made all of the supporting the the military and the government. And so their reasons were free. And so at the end of the day, it got down to I was being asked to serve a second American and global icon. And so I called him back, I called him back on the phone. And he even said, David, this another thing interesting is that when I declined, he he was the chairman and the CEO. And he said, Alan, if if you need to be the chairman of the Ford Motor Company and the CEO, I'll give up being the chairman. And I said, at the time I said, Bill, if I were to come, I would only come if you would be the chairman, stay the chairman. Because what we have to do to work together, we have a lot of things that we're going to have to redo a lot of decisions that were made to get us to this place. And this is the Ford family. They're fabulous. They've invested in the United States in the world. For at one point, Ford had 50% market share David worldwide. And so I said that to him. And then then I regretted and then I called him back. And I told him, would you like me to come but I'll only come if I'm the CEO and you stay as a chairman. He said, You got to he told me a number of times, that's probably the the smartest, and the biggest compliment that that he had ever been given, because it needed both of us to not only turn around Ford, but to create a Ford, as you know, that went from almost nearly bankruptcy to the number one brand in United States a fastest growing around the world. And we didn't take $1 of government money during the recession in 2009 GM and Chrysler went under

David Novak 13:39 

that's it's an impressive story for sure. And but I know that there was some initial skepticism that an air an airline guy could step into the automotive industry, you know, how do you deal with those early naysayers

Alan Mulally 13:53 

Holy Cow you have? You have really done your research, David as usual, this is why you are who you are. So I decided to come. I arrived in Detroit. They picked me up and they drive me over the world headquarters 12 stories high that the blue oval is takes up top three stories on on on the at the World Headquarters in Dearborn. And then I disappear underneath the the building. And it's an it's dark, and I realized that I'm in the garage of the executive team. And there's not one for branded vehicle. Aston Martin's Jaguar Land Rover is built on going holy cow, I came from Boeing to come to Ford. And it was a house of brands. I mean, holy cow. So then they take me upstairs, they walked me out in the auditorium, and this is where we do that earnings call every quarter and I do all of the townhall meetings of everybody around the world and and it had hundreds of journalists sitting there and they had another You hundreds were online around the world. And I didn't know it at the time, David, but I was the first executive to join the automobile business that came from outside of the automobile business at that time. Wow. And so all of these journalists around the world, they knew what the situation was. And I knew the United States was in serious trouble with the potential recession coming that GM and Chrysler and Ford were in trouble. And here's this person from outside the industry that didn't know anything about it. Holy cow, what does this mean to all of us? So they wanted to know who this fellow was. So they're all sitting there. Bill introduces me, David. And then he walks off the stage. And I'm having this impromptu press conference with all these journalists. So they started to ask me all these questions, and I was answering them as is, like I do with with a lot of respect. And then finally, one of them said, Okay, now, Mr. Lai, with all due respect, we're in trouble. And you don't know anything about this business. And this automobile business, starting with the automobiles is really, really complicated and really sophisticated. And so what does that mean, do it and they didn't say anything? I said, Do you have a question and being a customer in person? Do you have a question? He said, Yes. What does that mean to us that you don't know anything about this? And you're here and you're our leader? Now? I said, Well, rub my chin very thoughtfully. David. I said, Well, I sure agree with you. The automobile business industry is very sophisticated. Starting with the vehicles, you think about an F 150. I mean, a phenomenal vehicle. I mean, it has 10,000 parts. And you think about the quality, the fuel efficiency, the safety, the systems engineering, very, very sophisticated products. I might point out that the triple seven airplane has 4 million parts, and it stays in the air. The next day, the next day, the Detroit News, three headlines, I think we got the right guy.

David Novak 17:00 

I love that story. And you know, it's interesting, you know, a Ford was your first car changed, changed your life. And you went public with your opinion that your Lexus LS 430 was the finest car in the world. Just before being announced? You were the Ford CEO. Why do you say that?

Alan Mulally 17:20 

So this press conference, I just told you, that's where this came up. So one of the people, one of the journalists raise their hand and said, Okay, Mr. Malla, what kind of car are you driving? And I said, Well, I'm driving a Lexus 400 300 or 400, I can remember at the time. And the journalist said, Why are you driving this Lexus? And I said, because it's the finest car in the world. And the journalist said, oh, what does that mean to us here at Ford, it means that I am here to help us create the finest vehicles in the world. Another three inch headline next day in the news,

David Novak 18:01 

I love it. You know, I worked at Pepsi and you wouldn't be caught dead, you know, drinking a coke, you know. So when did you start driving the for a ride away? Good answer.

Alan Mulally 18:13 

Absolutely. And but I went even further than that, David, great question. So because we're going to move to being customer in and market driven, as opposed to just putting out products and holding on, which is what we've always done, why Boeing has been so successful, because we were always developing products and services that people wanted and valued around the world. And so I started driving Ford vehicles, but then also I asked them to bring in all the competitors in the person that was leaving the garage at the time I asked him for the BMW is in the Lexus, isn't everybody else that for their latest vehicles? And he said, Oh, no, we can't have the competitors in the garage at the Ford Motor Company headquarters. I said, Yes, we can. And oh, by the way, um, you know, I'm the CEO. So would you please get them in here right away? And so he said, Oh, yeah, yeah, because I don't think he knew who I was at the time, because I just had gotten there. And so every day, I would drive a new Ford vehicle that was in Final Validation and Verification. And then the next day, I would drive one of the competitors vehicles. And I asked every member of the leadership team to drive the competitors vehicles, along with the Ford vehicles, the and develop, and then fill out a form and give the engineers a call, and tell them exactly what they like exactly what they're concerned with. And in hindsight, I think that might have been one of the biggest things that I could have done, to get everybody to get it, that we are going to make cars and trucks that people want and value is not about us. This is about knowing what they really want with a rapidly changing world when it comes to the environment to the fuel efficiency to safety. efficiency. So that view of what people really want and value is the most important thing you do for any company.

David Novak 20:10 

Because you're listening to this, I can tell you're the kind of person who wants to learn how to lead well. But there's a lot of companies out there who wants to take that desire and charge you $500 or $1,000, or heck, even $20,000, to try and show you how to lead. That's just not right. If you want to be a better leader, I believe you deserve to have access to something that will truly help you. And it shouldn't cost a fortune. So I want you to go to how leaders lead.com and start my leadership class, it's really in truly free. And after you take this class, you're gonna feel more confident in your role, and you'll be on your way to get the big things done with your team. Go check it out at how leaders lead.com.

You come in to Ford as an absolute mess, okay, you lost $17 billion, you know, how do you go about diagnosing the problem is,

Alan Mulally 21:12 

this is a recommendation I make to everybody, whenever they're in a situation or even if they're not in a situation, but they're assessing where they are, and their plan is just deal with reality, really understand the reality, all the aspects of it, and just look at the world, look what's happening in the world. Look at all the trends, look at the technology. And we actually build that into our business plan review every week, where every member of the leadership team, David, whether it's an engineering, manufacturing, procurement, legal, they start out, they're part of describing their plan and where they are with what's going on in the world. So within two hour meeting, you've gone through the entire business, you know, everything that's going on, and you're looking for the opportunities to grow the business, but you're also looking for the issues that you need to deal with that are going to be risks to the business. And so that's what we did. And I included everybody. And so I mean, we looked at all the data that that that was the first time that all the team knew they're gonna lose $17 billion. We weren't sharing all of the data. So I took transparency to a whole nother level. And we shared everything. And of course, everybody in the company was willing to update us and tell us what's going on, because they're dealing with all of this, all these problems they have when you're losing $17 billion. I mean, it's not a very fun place to work. So we, we, we tapped into everybody and everybody shared it. And just a funny story about that. Every week, the leader would present their plan and all the elements of their plan and the status and they put green, yellow and red next to it. And green meant that they were on plan. Yellow meant they had a new issue, but they had a solution. And red was they had a new issue, but they didn't have a solution yet. And a red is not a problem. That's where I clap. Because thank goodness, we know now, because now we all can work together with you. Because you're not the problem. You're the answer. And you brought up the issue, so we know what it is. So we can work together to turn the Reds to yellows, the greens.

David Novak 23:19 

So you have this business planning review, you have this color coding system. And as I understand it, when you had your first meeting with all these leaders, you were all green, everything was green. And you've just lost $17 billion. You know, what was your reaction when you saw all the greens?

Alan Mulally 23:39 

In that meeting, I had a chance to clap. Now, let me tell you why. So we started our first meeting. And to your point, there were 300 charts. And all 300 were green. And then I said at the end of the meeting. So you guys, you know, now they didn't know before, we're going to lose $17 billion. And all of our charts on status or screen. I said, Now, you might think about this, is there anything, anything in your area of responsibility that might not going well? And so eye contact, David goes down to the floor. I mean, it's just like, Oh, no. So So next week, they're all green again. So I'm checking around with everybody as it was. And they said they're scared to death Allen, because in our culture here before you got here, you never brought an issue ever to the leader, let alone your your supervisor, the leader, unless you had a solution. So now you're managing a secret. You have no idea what's going on and you can't help change the greens, the reds, the yellows, the green. So I said I said Well, we're gonna we're gonna stick with this. I know it works. And so I stuck with it. And it went on for gosh, I bet six eight weeks. And I every week I had same conversation. Very nice way very recent. Echo, you know, $17 billion. I think if we know what what's going on, we can, we can start to change it. So then Mark Fields, he's leading North America. And we have a CEO for each of the regions around the world. And he has a large problem in Oakville, Canada, with a new edge. And so they color coded red, they stopped production, huge issues, you know, in any, any business making things to stop production, because we said we weren't gonna deliver things unless it's the highest quality. So he stops production. So he's getting ready for the business layer, final review, David the next day with his business plan review for North America. And up comes this chart on the launches, and we have like 20 or 30 launches going on around the world. So every last chart has the technical readiness, the schedule compliance, and the financial impact. And it's green, green, green for this launch. So he says the team, you guys, I think this is one of those red things Alan's talking about. And they all said, Well, it might be, but you know, what do you want to do about it? He said, Well, I think we should turn it red. I think he, he's saying that if we don't know what the issues are, we can apply all of our talent together to work on. And one of the vice presidents David actually said to him, good luck, Mark. Nice knowing you. So the next day, next day, we started the business plan, review, green, green, green, green. And then up comes this red chart. And I mean, the eye contact goes down to the floor. They tell and they they're looking at me they're looking at Mark, they told me later that they're all we're looking at the two doors behind me and Mark, and waiting for the doors open to large human beings that come in and remove mark from the meeting, because he had a red item. And so up comes the red. And I started to clap, and everybody's going, Oh, no, there's a sign the doors are gonna open now. And the doors didn't open. And I said to the team, any initial thoughts right away that you can offer to mark that can help him out. And Mark, this is great. This is great visibility. And we'll be on our way now. And a couple of weeks later, it turned to yellow, then turn to green. And that next week, David, all 300 charts look like a rainbow. Still a lot of greens. As an every company, there's a lot going on. That's right, a lot of yellows, a number of reds. And I knew right then once again, no matter what happened, the tsunamis around the world environment, the economy's sinking around the world. I mean, all of the things that we went through, no matter what happened, that we were now going to be able to not only save our Ford, but we're going to be able to work together to turn the reds, the yellows, the greens and create an exciting, viable profitably growing forward, that was creating value for all the stakeholders in the greater good.

David Novak 28:03 

You know, that's such a great story. And and you've talked to already mentioned this, the the idea of working together and you're known for you're working together principles, one of which is to love them up. Now, not many leaders use the word love with their people. I mean,

Alan Mulally 28:22 

why do you do it? Well, just because I believe it. And remember that, as I shared with you, when I was growing up, that was one of the values that I learned is a purpose of life is to love and be loved in that order. And then you had that with respect and dignity for others, and a desire to do greater good for mankind. I mean, that's what we're here. And that's what we're about. And so working in the principles, the first one that we had there was people first love them up. And when they would arrive, and we go through an orientation class for every every person, they they all have the same question that you just had, like, what does that mean? That means that we have a high affection for everybody that's joining us, we have a respect for why they join us to help us create the best airplanes, the best cars and trucks in the world. And we respect you so much. And we're going to create this culture of love by design. I'm a designer, we're designing this culture, and we're going to make it safe. We're going to tell you everything, we're going to tell you all the issues where most companies don't we actually share with them the financial situation, which very few people do and a company. And we're going to have a growth plan for the company. That's why we're here to profitably grow, because if you're not profitably growing, you're dying. And so simultaneously, we're going to grow the revenue making products and services that people want and value. And we're going to work the productivity in the margins, and revenue times margins equals profit, and we're going to have those go up at 15 to 20%. A year, and we all are going to work on that. And we're going to respect each other, and we're going to help each other. Now you can imagine, David, how those employees feel, when they have that kind of success. They have that clear expectation on the process, the behaviors, the vision, the strategy and the plan. And they know exactly what the status is. And they know that everybody is going to be helping each other turn the reds, the yellows, the greens, and

David Novak 30:27 

there are a lot of people who are listening who might have recently taken a new leadership position. In you know, What process did you go through to land on the idea of, of one Ford as your strategic plan

Alan Mulally 30:40 

has always been one plan for everything I did always grew up growing up, because where I was coming from was service. And if you're, if you're into service, if you believe in service as a purpose, one of the purpose alive, then you have a plan. And the more you get to one plan, where everybody can understand the plan, the better chance you have of implementing it. And so I, we did that on every version of every Boeing airplane. When we purchased McDonnell Douglas and Rockwell, I was asked to be the the president of integrating all of them. And so everywhere that I served, the first thing we did was we look at reality, we looked at what the status was. And then we put together that strategy. And in the Ford case, it was so important because they were so global, and they were so separate around the world. And there's very little work in together, that our strategy was one forward with one plan to create value for the greater good. And when I pulled together that team, David, most of them didn't know each other, because they're from all around the world. And there was no working together, because every country had their own Ford company. So there's no synergy on the product on marketing, or sales or anything else. And within two years, we had one plan for every aspect of the business. And that's why we made so much progress so fast from a $17 billion dollar loss to within I think, two years, a $9 billion profit.

David Novak 32:10 

Yeah, that was a not only a turnaround, it was amazingly quick turnaround. And you did it by unleashing the power of people. It couldn't have been always perfect. You know, I mean, it's it sounds perfect now. Yeah, but you look back at it, you know, did you ever have any doubt, personal doubt, as as a leader, when you're in the midst of this turnaround,

Alan Mulally 32:33 

to doubts, not not doubts, I probably have two strong words. But two concerns that led me to commit even more to the working together, leadership and management system and culture to thinks that terrorist attacks when I was at Boeing, unbelievable. And in a few days, travel, almost dissipated. And we went from delivering 620 commercial airplanes to less than 300, maybe 280. I don't know of any company, and you don't either has had their throughput go down by that much and be able to survive as a company. And so everything about are working together about into great question about dealing with reality, and working with everybody. So they know what was happening, including if you have to do layoffs in the near term, because we were going to get them back if we stay alive. And we do the right thing to deal with our reality. And the other one was when GM and Chrysler went bankrupt, in the recession that we had in 2007, and eight, which many of the government leaders were very clear that they believe that that was the closest we've ever been to another recession and depression like 1929. And if GM and Chrysler would have gone into bankruptcy and a freefall with the technology companies, it could have taken us there, GM or Chrysler told the government they were going into bankruptcy. And so they went to testified explain this to the government. And I was asked to come with them. We didn't need the taxpayer money, we were well on our way to turn it around forward. And usually, you know, when somebody's getting close to bankruptcy, that's just a huge indication that they haven't managed the business for the greater good and in creating value and the assets ought to be given to somebody else. But I went and testified on their behalf for temporary help, because it was the right thing to do for the United States of America in the world economy. And I was even asked one time in the during the hearings, David. They went, they were going down. We were all sitting at this small table with a glass of water because you're there for hours at a time testify. And they said to the the leader GM at the time. So if we give you some taxpayer money, will you work for $1 a year? And he said yes, absolutely. And they said same question to Chrysler in. Yeah, absolutely. And it turned around to me and they said, so Mr. Pillai, if we give you this money, will you work for $1 a year? And I said, Congressman, I'm not here asking for precious taxpayer money. I'm here to testify on behalf of my bankrupt competitors for the good of the United States in a global economy. And he said, Oh, just answer the question. Will you work for $1 a year? Well, now that's a different question. I said, Congressman, with all due respect, I'm okay where I am. So, but But to your question, when, when the government gave them some temporary money, and then we had a new election of President Obama, there was three months that went by where he took it very seriously about what to do about the economy. And so for three months, none of us knew what was going to happen with whether they're going to support GM or Chrysler temporarily, which all of us, I mean, I couldn't imagine what would happen if they would have gone into freefall. And so that was the only time where we had done everything we could, and everything that was right, and the timely decisions. But I didn't know. And I'll never forget, when President Obama got on TV and said what he was going to do, which was the right thing to do for the good of the United States economy at that time. And we had, we call it a business plan, review, David, we're sitting there together, listening to this. I've never heard so much cheering in my whole life and winning, and what it wasn't for us getting money. Because we didn't, we didn't ask for the money. But it was that is for an action that was that was needed to save the US economy at that time, which, which it did.

David Novak 37:02 

We'll be back with the rest of my conversation with Alan Mulally in just a moment. You know, when I think about people who see leadership as service, I think about the great Frank Blake. During his time as CEO of the Home Depot, he showed his service mentality by turning his whole organization chart upside down. For him, the frontline workers went to the top, the managers came next to support him. And he was at the very bottom serving everybody.

Frank Blake 37:30 

I actually think it is one of the most profound business concepts that exists. And it's profound, because it's a better reflection of reality. But the first thing impresses on you as the leader is, everything you do is uphill, nothing cascades down. Gravity is not your friend, you have to push your message up, you have to provide that motivating force for them to care about. Once you view yourself on the bottom, you understand everything that's important is happening about you. Understanding what it takes to move an organization from the bottom rather than the top was absolutely a key to thinking about leadership in the right way.

David Novak 38:18 

I'm telling you, you just got to hear this entire episode with Frank, scroll back and hit play on episode 19. Here on how leaders lead.

You say that leaders should expect the unexpected, and expect to deal with it. Can you give us an example of what this looks like in practice?

Alan Mulally 38:45 

Oh, gosh, it goes on and on and on. Like, like I shared with you about these are the two biggest unexpected was the terrorist attacks, but also the recession at Ford. But every month, every year, there's something changing. And for a long time in business, a change was was considered to be a problem. Like we just want to keep everything stable. Well, what I had learned early was Expect the unexpected and expect to deal with it in a positive way. And so whether they were tsunamis whether their economic crisis. And remember, in that business plan, review that first item, the first agenda item on every leader, David on their presentation was from their point of view and their discipline, engineering, manufacturing, procurement, legal communications, what was going on in the world, that was change that we would need to deal with. And a lot of it was unexpected at the time. But the fact that you move to a mindset, that is not a problem, you want to know what it is, and then we're going to figure out how to take advantage of the change to continue our profitable growth. on either the revenue side or the margin productivity side. And we're also going to mitigate the risk. Well, now, it's fun, they're red items that we're taking care of. But we're also figuring out how to take advantage of it. But that's so different than just holding on to what you've invented. And thinking that that's You don't need to change that when the whole world look at the way the world is changing. So just celebrate it, you don't have to judge it, it's not like it's good or bad. Just know it and celebrate it, and use all your talent and your team, to work to make use of that in a positive way.

David Novak 40:39 

You know, one of the big drivers you talk about is what you call the find a way mentality. I love that phrase, and what I think it means, you know, tell us a story. When that became so important to you, David, I'd

Alan Mulally 40:53 

go back to all those jobs I had, where I was implementing that the values that I learned from my parents, because where there was a TV guy route on my mowing lawn mowing business, or the grocery store, or all the other businesses, you always had issues, even if you had a reliable process, things would show up that you didn't expect. And so rather than to be scared about it, the mindset that allows you to go forward is, is to deal with that reality. In fact, one of the most important questions you asked today is about the importance of dealing with reality, not how you hope it would be your wish it would be, you have your plan, you have your vision, you have your strategy, and stuff is happening, that you need to deal with and not wish it would go away. And so how do you do that? It starts with a mindset, if you don't expect the unexpected and expect to deal with it. And as part of your culture, then it's going to be it's going to be scary. And if you don't have an environment where everybody knows that everybody knows the reds and the yellows, and the greens, then it's gonna be really hard to have a find a way attitude, because you're not going to have all the talent that you need to be working on it. So I think it's just fundamental mindset that any kind of business that you're in,

David Novak 42:04 

you know, I know you're a proponent of continuous improvement in lifelong learning, and, you know, what are your habits and routines to keep that a top priority?

Alan Mulally 42:14 

I listen more than I talk. And I ask questions more than I give explanations. And it's goes back to this fundamental culture, like, just an example of this. David, on the business plan, review. So I have 15 people there, we're going to spend two hours, we're going through every aspect of the business. On the revenue side, on the margin side, product side, the process side, the people side, and guess who talks the least? And that two hours? That would be me. And what am I doing? I am facilitating that meeting, I'm keeping us on schedule, I'll ask a question that might be if someone else that I know has a thought on the issue that's been brought up. And when I started, and when a lot of the environment a lot of people are in is when they go to a meeting with their leader who talks the most, the leader, and the leader will talk about different things almost every time they get together. Well, or here. Oh, here's another one. Here's a good one. So you're the leader, you're in the business plan review, and somebody brings up a red. And then what's the leader? Do? Have you done this? Have you tried that? Well, they just showed you a red that can be back next week, they're going to be working on it. So what are you what are you doing by offering all those things? You're creating all of these work streams? Because when you're the leader, and you ask a question, it's not a question. It's a direction people perceive as a direction. So they start working on that. But what's the worst thing is you just took the responsibility away from them. You just gave them what you thought was was the answer or whatever. And so, again, the most important thing, the most important thing is to create this environment where everybody is working with that positive attitude on the things that need their attention. And as the leader, again, you're facilitating, you're nurturing this environment, you're leveling up all the participants.

David Novak 44:23 

You've been on the Google board for a number of years now. And speaking of learning, you know, what would be the most powerful thing you've learned being on that board?

Unknown Speaker 44:33 

How

Alan Mulally 44:35 

not just search but how they have opened up the world, to everybody. It's unbelievable. The most important thing that they do is, and it's even more important right now with where we're going on AI is to make sure that when you're searching something that that is the truth, because there's a lot of you know, social media and everything is going on now. All information is so ubiquitous, that one of the most important things is what is the reality. I was so impressed. And it was so inspirational to me to see a set of people that were providing information to the world that people get access to they couldn't before. And to watch the seriousness in which they took that.

David Novak 45:23 

You know, think about it, you know, Boeing, for Google, you probably couldn't work with three more life changing companies in a lifetime. I mean, just unbelievable. Elon, there's been so much fun, and I want to have some more with my lightning round of questions. Are you ready for this? Yep. What's one word others would use to describe you?

Alan Mulally 45:45 

The ones that people use the most I can't do one is humility, love and service.

David Novak 45:50 

What would you say is the one word that best describes you?

Alan Mulally 45:54 

Humility, love and service.

David Novak 45:55 

That's a new word. If you could be one person for a day besides yourself, who would it be? And why?

Alan Mulally 46:03 

One is Francis hasslein, one of the finest leaders ever and everything that we talked about your great questions today. And this working together. This culture led by design, Francis led that following the Industrial Revolution, and when she's the head of the Girl Scouts, and everybody knows how famous she is, and because she and Peter Drucker were leading to serve to serve is to live love him up. There's humans,

David Novak 46:40 

what's the fastest speed you've ever driven a Ford? Maybe 120. What's a fun fact about airplanes that you'd only know if you've built one?

Alan Mulally 46:49 

Just how robust they are, how they can handle so many situations. But the best thing is how the pilots, everything about the airplane is to ensure that the pilots have all the information they need to deal with a rapidly changing situations.

David Novak 47:12 

Describe your last I can't believe this is happening to me moment.

Alan Mulally 47:18 

Well, that's that's happening now. It happened with every one of our five children. And it's happening now with every grandchild we just had. A new daughter is in Paris, France. We had another daughter, Lucy in Montana. And it's like, wow.

David Novak 47:36 

If I turned on the radio and your Ford, what would I hear?

Alan Mulally 47:39 

It'd be one of the news channels.

David Novak 47:42 

What's something about you that few people would know?

Alan Mulally 47:46 

I'm a little bit of an introvert.

David Novak 47:50 

It's amazing how many introverts. Extroverts describe themselves as introverts. That's the end of the lightning round. I just got a few more questions here. Before we wrap this up. I understand you have a Sunday morning meeting with your family. I mean, tell me about that. I mean, you know, I know you've listened more than you talk, I'm sure. But you know, tell me about that Sunday morning meeting.

Alan Mulally 48:13 

So you've asked some great questions about the business plan review. So we started having our kids and that was our plan. And I realized that we they have a business plan review every Sunday. I mean, you're gonna have five children. And you know, in a week, just the house alone looks like a bomb has gone off. So he, you need to you need to have a business plan recruiter to manage this, this family life. So I came home one day, I said, Nikki, how about we start a business plan review next Sunday. She She said, Hi. This is not Boeing. This is not our business. This is our family. So I said, Okay, so I waited and I thought about some more. And having a positive find a way attitude. I thought, okay, so Nikki, how about we start a family meeting, review every week? And she said family meeting? What would we do in that? I said, Well, here's my initial thought for the agenda. We'll come back from church. In the first agenda for all of us, is we'll go around the house, we'll pick up all of our stuff, take it back to the cabbie ticket back to our to our room, and then come back down. Now the House is looking pretty good. And the text is really fast. We have all seven people doing it. And then everybody would go back to their room, get their laundry, bring that down. We usually have two washers and dryers because if not seven people you're going to be doing laundry all week long. And that's not what we signed up for for our compelling vision. So we do all the laundry together, bring it down, dump it all and kitchen table. Then all seven of us was sort all the socks and everything else. And you get it done five minutes because you got all the participants here because it's impossible sort of socks if you don't have the leaders there. And so the next agenda item is say go back to the room and come back down with a cow Under so every every child, they would come down with with a calendar, we sit around the table, and then they go through their next week of their agenda, what they have on. And then, and then they would bring up do they need cat taxi, cab service, cheerleading support, whatever. And then each of us would take notes. And I'd go back to my dynamite assistant at, at, at Boeing. And she built it into my calendar and everybody, sometimes I'd be gone for an hour, everybody knew where I was. So we do that. And the next one was we would review everything about our business strategy and plan how it was going. I'll give you one example that how educational and lifelong learning that was. So one time Molly, who is not driving, not driving yet, as Chris, who was driving to pick her up and take her to her dance recital after school, and he forgot, it was on everybody's calendar, he forgot. So she said the next Sunday, Chris, I'm, I just wanted to go over this with you that I was really disappointed that you didn't pick me up and I missed our dance recital. And I you can just face went wide. And and and you can imagine how good they got at saying that. It wasn't in the mean way. It was coming from their heart. Well, I never saw Chris ever miss a commitment ever made to his sister or anybody else. So the last thing is that as they got older, especially after they could have a have a drink and and we we get together twice a year and and they would always end up started talking about the business plan, the family meeting version of the business plan review. And they started laughing and telling the stories and stuff just like our conversation today because there's so much great stuff. And then one time I thought, Gosh, it didn't seem like they, maybe some of them didn't like it. And so I stopped the meeting or above in the meeting I said, so it sounds like maybe you didn't enjoy our family meeting is or is there a reason why you stayed there? And participated in such a great way? And they said one of them said, Dad, do you remember what the last agenda item was our family meeting? You passed out the allowances?

David Novak 52:20 

You're a tricky guy. You know, I I know why you were CEO of the Year and all that stuff. You know, I get it. I got one last question here. Yes, sir. What's one piece of advice you give to someone who wants to be a better leader? I would really

Alan Mulally 52:37 

focus on serving. I mean, it's the ultimate and living is to serve. And you can serve everywhere in your life. And once you decide you want to serve, then you start thinking about yourself on how you do that, too. And you also ask for advice on how you can serve. So back to your lifelong learning and continuous improvement. You start thinking about this all the time you start gathering feedback in a positive way, you start asking people, What can I do? Whatever your job is, what can I do to help more be more effective. But the thing that allows you to do that is if you have decided that the purpose of your life is to serve, and then when you move to the greater good. Wow. I mean, this is all about human dignity, human beings, humanity. So great question, and it would be service, and then everything that would go into that, including your lifelong, continuous improvement to serve at the highest level.

David Novak 53:40 

Well, and I think one of the reasons why you're so joyful is your other directed, the happiest people in the world are other directed at all, the research really shows that and you taking time out of your busy schedule to share your insights with people who want to be better leaders as just another great example that

Alan Mulally 53:59 

they had just one one last comment from me, I have loved getting to know you. And I've also been a huge fan as you know of your service. And so the fact that you're doing what you're doing to help people link up with people that believe in service, and to learn from him is fantastic. So I just want to tell you, for all of us, thank you

David Novak 54:33 

well, as I'm sure you can tell, Alan is a one of a kind leader. I absolutely love his positive mindset. But you know, I got to point out, it's not the kind of positive mindset that just ignores the tough stuff. In fact, it's the opposite. And believe me, the turnaround afford happened because Alan got people to really deal in reality and to be transparent about the problems they were running into and Once people really felt safe doing that, they found a whole new level of teamwork and success to, you know, there's a world of difference between people who are just working with each other and people who are actually working together. And when you really lean into the principles Allen talks about, you can get your team firing on all cylinders and make some big things happen. This week, set that example of transparency, openly share an issue where you're feeling stuck, then watch as your team jumps in to work together to offer up solutions. I'm telling you, people will love that they're needed. And they'll appreciate the reminder that they can raise their hands and ask for help when they get stuck, too. So do you want to know how leaders lead? What we learned today is that great leaders know how to get people working together. Coming up next on how leaders lead is Patrick Lencioni Best Selling Author and founder of the table group.

Patrick Lencioni 55:58 

So many young people and older people go into the world thinking to be a leader means I have to be perfect I have to be on I have to avoid making mistakes. And it is the very thing that makes people not want to follow them. Because we don't trust people that aren't humble. And so I think humility, and vulnerability are the key to being a great leader the first key

David Novak 56:21 

so be sure to come back again next week to hear our entire conversation. Thanks again for tuning in to another episode of how leaders lead where every Thursday you get to listen in while I interview some of the very best leaders in the world. I make it a point to give you something simple on each episode that you can apply to your business so that you will become the best leader you can be