Ford's Mulally: KISS and Drive the Numbers

Last Updated Apr 27, 2010 2:12 PM EDT

Ford President and CEO Alan Mulally has an earnest, Midwestern delivery that's easy to lampoon. But it's impossible to laugh at the results the man from Kansas has delivered.

Ford (F) today reported net income of about $2.1 billion for the first quarter of 2010 -- a $3.5 billion turnaround from the year ago quarter. Ford had its best quarterly pre-tax operating profit in six years, Mulally said, and could well achieve the goal of positive operating profits for the full year.

"These results are further evidence our plan is working and we are delivering profitable growth," Mulally said in a conference call, even though overall U.S. auto sales are still way below where they were in 2007.

How did Ford do it? It seems simplistic, but Mulally reduced his Ford turnaround plan to a series of bullet points that fit on the back of a business card. If you spend enough time around Mulally, pretty soon you'll know them by heart. If you don't, he'll give you a copy.

The two main points are:

  • "Accelerate the development of new products our customers want and value."
  • "One Ford." That's Mulally shorthand for getting Ford's worldwide subsidiaries to work together, eliminate redundancy, and share more costs, parts and models.
There are also points about getting Ford's balance sheet in better shape. Well, yes, it all sounds obvious -- and it tells you a lot about the U.S. auto industry that those simple points represent a revolution. The KISS rule (Keep it simple, stupid) is shrewd management advice when you choose the right things to keep simple.

So what if Mulally lays it on a little thick? For instance, I introduced myself as a freelancer when I asked him a question at a press conference for the New York auto show. "You're a freelancer, huh?" Mulally asked. "How's the freelance business, anyway?" This was in front of a couple thousand people. I told him, "Probably about like your business -- better than it was in 2009, but that's not saying much."

My peers at the auto show ribbed me about the back-and-forth all day. Mulally would probably deny it was a calculated move, but it's a good tactic in public speaking to make a connection with the questioner, and gain a few seconds to think about an answer.

When Mulally joined Ford in late 2006, company veterans were skeptical. They had seen any number of turnaround plans hit the skids, such as "Ford 2000" under the late Chairman and CEO Alex Trotman, which was supposed to turn the company around by that year. If anything, reforms under Trotman's successor, Jac Nasser, turned out even worse.

But no one at Ford is rolling their eyes any more. Mulally is for real.

Photo: Ford