Ford CEO Alan Mulally (left) and heir apparent Mark Fields
Henry Ford II abruptly fired president Lee Iacocca in 1978 by calling him into his office and telling him "I simply don't like you." CEO Don Petersen departed in 1989 after losing the confidence of the board of directors with the bizarre announcement that he planned to "repot" himself. And chairman Bill Ford booted CEO Jac Nasser in October 2001 after months of public disputes.
Of course, all of that was an improvement over 1945 when Henry Ford II had to practically disarm the thuggish, gin-toting Harry Bennett in order to take over the company from his ailing grandfather.
If there were any doubts about the changes in Ford (Fortune 500) culture wrought by CEO Alan Mulally, they were erased by the news of the latest series of management changes. ,
Instead of being a textbook example of jarring executive moves, Ford now becomes a business school case study of strategic long-term management transitions.
The transformation is largely the result of Mulally's ability to inspire personal loyalty, due to his transparent and open management style, along with the unqualified support he gets from executive chairman Bill Ford.
In a conference call Thursday, Bill Ford blurted out, "I love Alan." While others may not be so demonstrative about their affections, the sentiment behind the expression seems to be widely shared. With his radiant and outgoing personality, Mulally has won over all but the most deeply cynical.
Less obvious in the smooth transition is how it was facilitated by Mulally's willingness to remain in Dearborn and on the job well past what might have been expected to be his normal sell-by date. Having amassed a considerable personal fortune and without any family ties to Michigan, he might have reasonably been expected to depart more quickly for temperate climes.
The day's big news:
The changes come at a potential tipping point in Ford's future success that will determine whether it can continue to build on Mulally's reforms or be forced to retreat due to a combination of adverse markets, resurgent competitors, and its own shortcomings.
Despite record third-quarter profits announced this week, there are several trouble spots:
Investors have noticed. Ford shares are up only 2.56% for the year vs. 27.6% for General Motors (Fortune 500), which has its own problems in Europe and North America. ,
So give Mulally (and Bill Ford) credit for overhauling Ford's fractious culture and executing what looks like a picture-perfect example of management transition. But don't confuse that with a sign that the new team will face smooth sailing from here on out.
|Buffett's annual letter: Learn from my real estate investments|
|Julian Assange draws a big SXSW crowd, which quickly loses interest|
|In El Salvador, a glimmer of hope for a stronger economy|
|Satoshi Nakamoto is the Anti-Steve Jobs|
|Why Mall of America is expanding as many retailers implode|