American Icon: Alan Mulally and the Fight to Save Ford Motor Company
(2012) is a work of business nonfiction by Bryce G. Hoffman. In the book, Hoffman explores how a new CEO transformed the Ford Motor Company, saving it from financial collapse. Nominated for the 2012 Financial Times
Book of the Year, critics claim it is one of the greatest management narratives of our time. An author, management consultant, and strategic advisor, Hoffman worked as a journalist, covering automobile industry headlines for The Detroit News
. He is best known for his coverage of the Ford Motor Company crisis.American Icon
describes how CEO, Alan Mulally, took control of the Ford Motor Company in 2008 and turned it around. Through Mulally’s leadership, the company avoided sharing in the same fate as other collapsing automakers around the country. To tell the story, Hoffman uses data compiled from confidential company documents, snippets from boardroom talks, and clips from executive interviews.
Hoffman begins by describing the problems plaguing the automobile industry in 2008. It is a problematic time for automakers everywhere, not just the Ford Motor Company. He focuses primarily on three Detroit-based automakers—Chrysler, General Motors, and Ford—comparing Ford’s strategy with the approaches taken by Chrysler and General Motors.
Significantly, Ford is the only one of these three automakers that decided to save itself. Chrysler and General Motors both took bailouts offered by Congress, but the bailout did not solve their problems. For these companies, money wasn’t the issue. They needed to drastically change their whole approach to the automobile industry, and they didn’t.
Ford survived the crash, Hoffman claims, because it looked outside the automobile industry for help. Ford planned to diversify its operations, radically overhaul its product lineup, and, most importantly, overcome its own toxic corporate culture. Hoffman concludes that without Mulally’s bold leadership and visionary outlook, the Ford Motor Company would not be here today.
Hoffman begins by exploring the cultural problems at Ford. In 2008, Ford had one of the most toxic and unsustainable corporate cultures in America. There was no unity within the company, and everyone prioritized their own advancement over the company’s success. Executives didn’t care how the Ford Motor Company was performing—they only cared about their own division. Undercutting one department to make another department look better was a widespread practice. It was also a surefire way, Hoffman concludes, to destroy a company’s long-term prospects.
Looking at Mulally’s career, Hoffman probes why Ford chose him to save the company. It was risky on both sides, Hoffman claims, as Ford didn’t have much time left. If hiring Mulally turned out to be a mistake, it would be too late to hire someone else. If Mulally failed to save Ford, he would be remembered as the man who lost one of America’s great automakers. Although Mulally had saved Boeing after the 9/11 attacks, there was no guarantee he could turn the automaker around in time.
Part of Mulally’s success was his optimism. He knew he could save the Ford Motor Company, and he knew he was the man to heal the divisions plaguing the various departments. He didn’t fear the challenges ahead; instead, he thrived on the difficulties, turning them into opportunities. Mulally saved Ford Motor Company because he knew how to bring everyone together to drive them toward a common goal.
One of Mulally’s key executive strategies was restructuring bonuses. He didn’t award bonuses for reaching team-based performance goals. He tied bonuses to the overall company’s success, so, if the company lost money or executives undercut each other to boost their own team, they wouldn’t receive performance bonuses anymore.
Mulally also introduced his “Business Plan Review,” or BPR. This meeting, held every Thursday, brought executives together, reminding them that they worked for a whole company, not just an individual team. He held regular follow-up meetings where necessary, holding everyone accountable for the company’s success or failure.
Hoffman explains why Mulally’s BPR strategy was so successful. He set out 10 nonnegotiable rules for every meeting. Most importantly, every team had to have clear performance goals, and every single employee’s contribution mattered. Employees came first, and it was important for colleagues to respect and listen to each other. Mulally emphasized how important it was to work together, be resilient, and, most of all, enjoy the challenge.
What Mulally achieved that his predecessor hadn’t, Hoffman notes, was setting out a clear vision for the company’s success. Mulally set clear, concrete, specific performance goals for every department and the company. He implemented the “One Ford” vision, and he developed a realistic, profitable growth strategy.
Hoffman admits that Mulally’s approach to saving the Ford Motor Company wasn’t perfect. However, his strategy saved one of America’s greatest manufacturers, which is now one of the most profitable automakers in the world. Mulally didn’t just save the Ford Motor Company—he saved an American dynasty.