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Managing Uncertainty

Michel Syrett and Marion Devine

Ford’s dramatic turnaround since Alan Mulally took over as chief executive in September 2006 is ascribed in part to the transparency of the financial reporting he introduced to strategic planning. Previously, managers held “pre-meetings” before board meetings where they agreed how to draw attention away from poor performance and poor investment decisions. It was a classic “cover-your-ass” manoeuvre.

Mulally had seen this kind of thing before when he was running engineering at Boeing’s commercial plane division. In 1997, Boeing took a $2.7 billion charge after a failure of communication in the commercial division led to two assembly lines being closed for a month at a time when demand was rising. When Mulally became head of the division, he kicked off an era of radical transparency that made everyone better informed and much more aware of performance issues and potential problems.

He took that philosophy to Ford. As at Boeing, Mulally was determined to have a constant stream of data that would give a weekly snapshot of Ford’s global operations and measure executives’ performance against profit targets. Constantly updated numbers would make it impossible to hide unpleasant truths. But that wasn’t the only objective. Rather, the numbers would help executives anticipate problems and tweak strategy accordingly

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