Summary Paper Lizatte Martin BUS 610Prof. Johnny Vanneste March 5, 2012
Page 2Discuss the role of leadership and how it can impact organizational performance. Leadership influences organizational performance depending on the level to which the leadersenables manages and team to plan, organize, control and act effectively. It is always up to theleadership to see and evaluate the strengths or weakness of any organizations. If the company isstrong in financial terms that it has got a great leader or the reverse is always true as well. To achieve greatness, a leader must understand the human element involved, of course addingtheir own and carefully watch the details every step of the way. A strong leader must know whomthey can trust, seek reliable information and make decisions, often without hesitation that willhave an overall effect on the direction, speed and all other future decisions. Obviously, this is notan easy task to perform through the long journey but still manageable with creative strategies andhard working. In a large complex organization and environment only a 100% fully engagedhuman leader could hope to achieve these lofty requirements to fulfill their duties. Thus,leadership is not for everyone, and leadership is one with responsibility. A leader must be able tolead with agility, recover from mistakes from within the organization or their own mistakes;perseverance, strength of character, and boldness are therefore often-key components. When leaders fail and there are so many ways to fail, the organization can go through chaoticsituations and recover, or even come apart and self-destruct from within. When that happens,everyone loses, and if that organization is a company or large corporation, failed leadership willdetermine the untimely and unfortunate fate of all the vendors, lenders, customers, andemployees. Too, the vendors, lenders, customers, shareholders, regulators, employees must be on boardand in it to win it, one with the goals, objectives and vision of the company. It is up to the leader
Page 3to see that all this is working like a great team. In practice however, it is not the realization ofperfection in processes that must be sought, rather the agreement by all players to move in thatdirection while achieving the goals. Flexibility, agility and the ability to adapt swiftly are whatthe leader must strive for while they motivate the team to work together and put in their bestefforts. The role of leadership in any organization has a direct impact on the performance of thebusiness. So with such a responsibility demanded, it is obvious to choose our leaders wisely, orweve already sealed our fate.Discuss Mulally’s leadership style at Ford Motor Company and provide examples of how hisactions fit this style. Mulally’s leadership style at Ford Motor is mainly based on extraordinary determination withgreat vision. It is always true that leaders with such qualities can really make the differences inany organization. Alan Mulally leadership style is based on a great relationship behavior thatparticipate every one in the company. He uses selling and participating style in his leadership atFord. He provides directions, encourages tow-ways communication and helps builds confidenceand motivations on parts of the followers. He tried to prove that working as a team is the rightanswer for great achievements. Under the slogan “One Ford” he encouraged working as one team, with one plan in order toachieve one goal, a goal to save Ford which is an American and a global icon. “Communicate, communicate, communicate’ is Mullaly’s slogan which he believes thateveryone should know the plan, its status, and areas that needs special attention. This proves hisintention and believes in two-ways communication. He also encourages participants to share
Page 4their ideas during the weekly Thursday meetings. Due to the economic turn down, Ford waslooking someone with a new vision looking for a new direction and achievements. So theyfinally managed to found out the right leader with those requirements to fill up the gap. Thegeneral goal was to move people towards a new set of shared dreams. That is what he has doneby setting people free to innovate, experiments, and participate in all kinds of organizationalactivities for one targeted goal. He sets up high standards for performance by being obsessiveabout doing things better in the car industry.Discuss how goal setting helped Ford improve its performance. Goal setting is the foundation for personal and business success. Ford, like most carmakers,still faces a tough road. But the fact that it has not only survived the Great Recession but is alsoshowing real signs of promise is a testament to how rapidly Mulallys leadership has turned thecompany around. Upon arrival at Ford, Mulally set up goals where they work hard altogether andreach. His goal was clear and simple as this “An exciting viable Ford delivering profitable growth toall”. After setting up this clear goal, he came up with plans on how to reach and deliver theresults. He aggressively worked to restructure the general system in the organization. This includes developments of new products to attract customers. He believed workingtogether as one team to finance the plan and improve the company’s balance sheet. At the time ofhis arrival the company was in verge of financial collapse but he decided to take some strongmeasures by maintaining the company’s independence. Even if all these action doesn’t bring the
Page 5necessary results within the short period but indications are out there for better results. Sotherefore, his goal setting and great leadership has resulted in improving the company’sperformance.Assess Mulally on each element in communication openness including message transmission,trust, agendas and goals. When he first joined Ford, Mulally gathered all the necessary information he was looking forabout the company by interviewing dozens of employees, analysts, and consultants, and fillingthose five binders with his typed notes. The research allowed him to develop a point of viewabout the auto business that now frames all his decisions. He is a leader who believes in open communication with all employees around him. He wantsto make sure that everyone in the corporate knows what is going on around, so that everybodyspeaks the same language and be on the same page at the same time. “His openness has won himsupport thought the organization”. This is what he also said, "When I arrived there were six or seven people reporting to BillFord, and the IT person wasnt there, the human resources person wasnt there," says Mulally. "So I moved up and included every functional discipline on my team because everybody inthis place had to be involved and had to know everything." He developed a point of view about the auto business that now frames all his decisions. Hecreated plastic cards with four goals on one side ("Expected Behaviors") and a revised definitionof the company ("One Ford") on the other. (Hellriegel, & Slocum). To Mulally, it is like sacred
Page 6text: "This is me. I wrote it. Its what I believe in. You cant make this shit up." Mulally is insistent about that. "If somebody starts to talk or they dont respect each other, themeeting just stops. They know Ive removed vice presidents because they couldnt stop talkingbecause they thought they were so damn important." Mulally instituted color-coding for reports: green for good, yellow for caution, red forproblems. Managers coded their operations green at the first couple of meetings to show howwell they were doing, but Mulally called them on it. "You guys, you know we lost a few billiondollars last year," he told the group. "Is there anything thats not going well?" After that theprocess loosened up.Evaluate the effectiveness of Mulally’s leadership style and recommend whether he shouldcontinue with this style, or use a different style. A leader must be a visionary and get the team on board to become one with that vision,motivating everyone to put in their best efforts, even go beyond, then harvest that synergy andfoster that inertia. Having this vision in mind, Mulally exercised his leadership style to beeffective by being supportive and helpful to the employees in every corner of the business. Evenif some of his moves were a desperate and very hard at some points but it paid off at a later stage.Making the right moves at the right time is one of his appreciated qualities of style for success.Placing an innovative action in the industry by looking a head is also another way of witnessinghis effective measures for challenging other competitive companies in the market. When we evaluate his leadership style, the following areas are his strengths which put him tobe the best and a great manager in the industry.
Page 7 Having a clear plan is the base for his effective leadership. His original plan is to invest in thecompany long term future of the core brand sensing the recession that eventually came; heestablished $23 billion in lines of credit within 90 days of taking the CEO job. Those credit lineshave enabled Ford to invest in new product development while avoiding the governmentassistance that other car makers in the US had to take. Having a clear point of view on both his plan and the industry contributed to the business.Mulally is a very effective communicator. He speaks in a down to earth tone with a very clearpoint of view on his business and his plan. As an example, he says in the New Yorker interviewthat fuel efficiency, safety, quality and value are going to drive consumer decisions on carpurchases. Thats the kind of clear, concise, easily repeatable point of view that an organizationcan use as a guide post. He understands the culture very well and tried to make it work with the plan. Mulally ispushing for consistency of purpose, transparency and collaboration in the management culture atFord. He has put an end to calendar based rotations of executives into new assignments so thatthey have enough time to prove themselves in the jobs theyre in. He is insisting that managersput their cards on the table in weekly update meetings so that everyone has the opportunity tohelp solve small problems before they are getting bigger. Finally, focuses and follow ups have been part of the on going procedures in order to makethat everything is moving according to the plan.
Page 8 Mulally has set up clear systems that keep the management and all the team accountable tothe plans. Every initiative and its major tasks are color coded as green for on target, yellow forquestionable and red for a problem. This creative system has helped the company to identify,track, discuss and resolve a problem whenever they arise. Based on the fact that Mulally has contributed to the Ford community, by proving an effectiveleadership style which brings a drastic change and improvements to the organization. By doingso, he further reduced unnecessary brands of cars and related costs that helped Ford to stand byits feet through the hardship time. He showed that leadership is all about encouraging otherstoward the goal of the organization. So therefore, I suggest he has to maintain his leadership style and move forward for better andgreater achievements in the future.
Page 9References: Hellriegel, D., & Slocum, J. W., Jr. (2011). Organizational behavior: 2011 custom edition (13th ed.). Mason, OH: South-Western Cengage Learning. http://www.automobilemag.com/features/awards/1001_2010_man_of_the_year_alan_mulally_ce o_ford_motor_company/index.html http://ces.crunchgear.com/2011/01/we-interview-alan-mulally-ceo-of-ford/ http://guides.wsj.com/management/developing-a-leadership-style/how-to-develop-a- leadership-style/ http://media.ford.com/article_display.cfm?article_id=24203 http://www.time.com/time/magazine/article/0,9171,2007401,00.html