Monday, March 30, 2015

You Can't Manage a Secret

When Alan Mulally became CEO of Ford, they were losing 16 billion dollars a year. That's 50 million a day, 365 days a year!

Each week, Alan held a business plan review meeting, as he had always done as CEO at Boeing Commercial Airplanes. Each week, the stoplight reports were all green, indicating that there were no problems. Finally, in the third meeting, Alan said, "Folks, are you sure there are no problems? After all, we're losing 16 billion dollars."

The following week, one report showed a red light. When the owner got up to speak, the atmosphere was tense. Everyone was certain he was in deep trouble.

He explained that they were having a problem with the tailgate on a truck. When he finished, Alan applauded and asked, "How can we help you?" At that point one of the engineering managers spoke up. "I think we can help you with that. We've seen that problem before."

The next week, there was a rainbow of progress reports, and from then on, they began methodically working to solve all of them.

You can't solve problems in a climate of fear of recrimination. If you shoot the messenger, the person who tells you about a problem, no one else will bring problems to your attention.

Within two years, Mulally had Ford profitable again, one of the greatest turnarounds in history, and done without accepting any bailout money from the government.

You just can't manage a secret!

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