It is easy at times like this for leaders to become paralyzed by fear, uncertainty and doubt. But great leaders know that crises such as the present pandemic present unique opportunities to rethink their businesses and figure out how to do what they do better.
Consider Boeing – not the Boeing of today, led ham-fistedly by the latest in a series of uninspiring GE alums whose only strategy seems to be using the coronavirus as a convenient excuse to get the American taxpayers to bail out a company that was already nosediving into bankruptcy before anyone started coughing in Wuhan, but the Boeing of 2001, whose commercial aircraft group was led by that exemplar of authentic leadership, Alan Mulally.
Boeing was in bad shape when Mulally was promoted to CEO of Boeing Commercial Airplanes back in 2001, even before terrorists turned four of its planes into flying bombs. It had been locked in a dogfight with Airbus for years. Mulally had managed to get the Europeans in his sights with the launch of the 777, which he had presided over in his previous position, but the battle had already inflicted major damage on both companies.
Then came 9/11.
Five years later, after he had left Boeing to save Ford Motor Co., Mulally still shuddered when he recalled watching the screens that listed all of Boeing’s airborne jetliners go dark. Over the next several weeks, airlines all over the world cancelled or froze their orders for new jets. Boeing’s order book shrunk by the hour, and industry watchers began to wonder if the aircraft manufacturer could survive such a massive hit.
But Mulally was undaunted. He used the crisis as an opportunity to right-size the company, to renegotiate union contracts, to rationalize its supply chain and even introduced a new management model designed to overcome the company’s poisonous internal politics.
Boeing emerged from the crisis in a far better position than Airbus. By the time Mulally left for Ford in September 2006, Boeing’s stock price had passed $80 a share – almost three times what it had been trading for back in 2001 – and it was well on its way to launching the most revolutionary jet in a generation: the 787 “Dreamliner.”
The Global Financial Crisis
When Mulally arrived in Dearborn, Michigan, Ford was in far worse shape than Boeing had ever been. But in the space of a year, he managed to shrink a record $12.7 billion loss into a far more manageable $2.7 billion shortfall and put the company on track to return to profitability in 2008.
Then the global economy collapsed, and took the American automobile industry down with it.
After initially joining the CEOs of the other Detroit car companies in appealing for a government bailout, Mulally decided that this crisis presented another big opportunity – an opportunity for Ford to solve its longstanding problems itself, without taking the taxpayers’ money, and to position the company for future success. So, he withdrew Ford’s request for a bailout and did just that.
As General Motors and Chrysler went bankrupt, Ford saved itself. Within months, the company was recovering lost market share and, by the end of 2010, posting record profits.
While both of these stories are a testament to Alan Mulally’s phenomenal leadership abilities, they are also poignant examples of how companies can turn a crisis into an opportunity for self-improvement.
Mulally was able to do this heavy lifting because both of these crises posed existential threats to the companies he was leading. That recognition allowed him to enlist employees, trade unions, suppliers, dealers and other key stakeholders in his effort to restructure these companies in order to ensure their survival. But Mulally didn’t stop there. He also used these opportunities to make the changes necessary to position Boeing and Ford for future success.
Unfortunately, both of these stories are also cautionary tales.
Both Boeing and Ford went on to squander the success Mulally had worked so diligently to create by reverting back to old, bad behaviors and dysfunctional business practices after he left. That is on them, not on him.
Even though both companies went on to falter and fail again, the changes Mulally made at both corporations were not for naught. They helped ensure years of profitable employment for thousands of workers who would otherwise have lost their jobs, paid dividends to investors who would otherwise been wiped out and provided major sources of revenue to communities across the world that would otherwise been left with nothing but rusting factories and empty warehouses. Suppliers, dealers and customers all benefited, too.
So, even as you struggle to navigate the changed business landscape you now find yourself in, take the opportunity created by the COVID-19 pandemic to rethink the way your company does business and make the changes necessary now to emerge from the present crisis positioned for future success.
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