Weeks 17 & 18: It's all about the strategy!

I was getting bored.

Mulally had done such a great job building his team, making a plan, holding people accountable, and consistently being honest and transparent. Things were going well and the details of how he secured funding, designed new vehicles, etc. were too specific to the automotive industry at that time period and I was losing interest.

And then things fell apart…

I don’t think reading about the turnaround of Ford would be useful to us if everything went smoothly once Alan Mulally took over. Sure, we could attribute it to his honesty and transparency or his courage to build the team he needed and his relentless focus on a three point plan. But it would be anticlimactic for me because I wouldn’t have an idea of what to do if my best laid plan didn’t go quite as I’d expected.

So, today, I want to talk about how doing strategy increases the odds of success in the face of an uncertain future.

Let’s set the stage for our discussion.

Less than 2 years into executing his plan, Alan Mulally faced an organization that was in crisis. The United States had been in a recession for months.

Fuel prices were up and truck sales were down for various reasons. Each day the financial forecasts for Ford got worse and Mulally faced an operating environment that no one could have predicted.

In the face of such dire circumstances, many companies go into full survival mode - strategy be damned.

Let me get on my strategy soapbox for a minute

In Your Strategy Needs a Strategy, we learn to approach doing strategy in different ways based on two factors:

(1) predictability - how far into the future and how accurately you can confidently forecast demand, corporate performance, competitive dynamics, and market expectations

(2) malleability - to what extent you or your competitors can influence those factors

Doing strategy essentially means that we take a proactive and deliberate approach to defining our goals, broadly determining various ways we might accomplish them and choosing that which has the most likely chance of succeeding within our unique operating environment and in the face of an unknown future.

So, in the face of crisis, an ineffective leader focuses only on the short term. We see it so often. However, an effective leader (which we are striving to be) deals with the short term while not losing sight of the long term.

Getting back to Ford

Based on the earlier description, I think it is safe to categorize Ford as being in survival mode. Alan Mulally does NOT disappoint in this area either! He’s not only facing mounting financial losses but he’d explicitly set a goal to return to profitability in 2009 which now seemed impossible. Now, it seemed Ford was going back on their promise which was reminiscent of the many times the company had done so prior to Alan Mulally’s joining.

So, what did he do? What would you do?

Mulally made a plan for further production cuts in North America and more layoffs. Despite that, he insisted that Ford would move forward with its investment in new vehicles.

Here’s an example of when a leader needs to be courageous in making an unpopular, but necessary decision. Can you imagine how that was received? People are being laid off but you’re dumping money into new vehicles…at a time when people aren’t buying new vehicles…

What we’ve just learned is that, to bring about organizational change, we must study strategy. You might be thinking why bother doing strategy if the future is unknown and things can change in the environment that makes your strategy useless.

The case for studying strategy

Strategy has become an overused buzz word that has overshadowed the fact that it is a useful process. In my studying and doing strategy, these are the reasons I think it is a worthwhile effort and necessary for any leader to be effective.

1. It forces you to clearly articulate the future state you are trying to reach.
2. Doing strategy right also forces you to creatively determine multiple ways in which your organization can reach that future state. It breaks you from the impulse to continuing to do what you’ve always done. That “strategy” is the ultimate business killer.
3. It engineers flexibility - although you will ultimately choose one set of options to pursue as your strategy, you will have built in flexibility by identifying alternatives. That way, if the future throws something at you that negates one of the options you’d chosen, you are well positioned to quickly pivot and continue moving forward.

How to start

The pdf below is a cheat sheet that I share with my coaching clients. You’ll see that it is branded with the Strategic Strengths Coaching logo which is the business under which I provide leadership coaching. I’m happy to talk more about that to anyone who wants to but I wanted to make it clear where the information was coming from.

The cheat sheet outlines the resources I recommend as an introduction to studying strategy. In my opinion, it is more important to develop the right mindset around strategy than to study any one framework or methodology. That’s what this plan aims to achieve.

Next Steps

I’m looking forward to bringing our studies of Alan Mulally and the turnaround of Ford to a close. Next week’s blog post will accomplish that and we will move on.

Thank you for reading!