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Chip Conley

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The New CEO

Posted: 04/19/2012 4:27 pm

Given the hoopla associated with the upcoming Facebook IPO, it's almost become conventional wisdom to suggest Mark Zuckerberg is the model of the 21st-century CEO. While Zuckerberg's talents and entrepreneurial intuition are immense, it's too early to bestow that label on him yet. Let's see how he gets seasoned as a public market CEO -- and handles an inevitable rough patch in the company's growth -- before we suggest that he's the next Steve Jobs.

In fact, effectively handling adversity is probably at the top of the most important skill list of a modern CEO. This executive needs to negotiate a hyper-competitive global environment, the acceleration of tech-enabled disruptive innovation and less predictable economic cycles. Based upon the turnaround success of Ford Motor Company (and, previous to that, at Boeing), Alan Mulally would likely be my top candidate for role model for the new CEO.

Look what the man inherited. When he took over the helm in the fall of 2006, Ford was considered junk-bond status. The company's reputation for quality was in freefall, the product line was stuck in SUVs and trucks at a time when gas prices were skyrocketing, union labor costs made the U.S. operation uncompetitive on the world stage, and legacy union health and pension plans represented a huge percentage of the cost of each new car being produced. Morale was dropping and the legendary corporate culture was on life support. And, this terrible landscape was in place before the Great Recession caused America's two other major automakers to seek government bailouts.

In the fall of 2008, the Ford share price was $1.01 (today it's more than twelve times that), but Mulally persevered. First, he took a page out of Gordon Bethune's book (the tenth CEO in ten years at Continental Airlines in the 1990s) and he first focused on how to bring back a winning sense of culture. Not taking a taxpayer handout was one testament of that sense of resilience and corporate pride. Using old school "management by walking around," Mulally became more than a figurehead. He ate in the corporate cafeteria rather than the executive dining room. He sent birthday presents to colleagues when they were on business trips. He wrote personal handwritten notes to hundreds of Ford employees who displayed these like badges of honor in their cubicles. And, as a good friend of mine who works for Ford says, "Alan has such emotional intelligence that he makes you feel you're the only one in a room when you're in a conversation with him. He makes you feel important."

The checklist of other impressive talents and actions are also noteworthy. He improved plant efficiency, he tied manufacturing more to consumer demand, he championed innovation as well as data-driven decision-making, and he developed a more transparent organization. He also improved accountability, not by demanding obedience, but by commanding respect.

In reality, Alan Mulally isn't a superhuman. He didn't singlehandedly make all these changes. But, creating an emotionally intelligent workplace and what psychologist Abe Maslow used to call great "psycho-hygiene" (the ability to proverbially "bathe together" by studying key lessons and learning in the worst of times), helped him to turn around this Titanic of a company before it hit the iceberg. It may have helped that he had a well-known and wise executive coach supporting him in this process.

The new CEO is like the coxswain on the rowing team. There's a miraculous phenomenon in rowing called "swing" when the crew is in such finely-tuned unison with their sense of purpose that their rowing literally lifts the boat partially out of the water as it glides. And, in so doing, the crew experiences less friction and can go even faster. Alan Mulally has done this with two great American companies, Boeing and Ford. You can read more about how he did it in the new book, "American Icon: Alan Mulally and the Fight to Save Ford Motor Company."

 
 
 

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