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“That’s okay, you don’t have to come to the meetings,” Mulally said with a smile. “I mean, you can’t be part of the Ford team if you don’t—but it’s okay. It doesn’t mean you’re a bad person.”

Schulz called in sick to the next BPR and sent his controller in his place. He said he had injured his foot and required surgery, but some of the other executives thought he was really just afraid of another showdown with Mulally. Many of them were beginning to realize that they had underestimated the grinning Kansan. Mulally’s down-home persona was like a velvet glove hiding the proverbial iron fist, and they were beginning to feel its squeeze. The sort of accountability
and transparency Mulally demanded was unprecedented inside Ford. And Mulally’s BPR ground rules made them feel like ill-mannered children. Ford’s senior executives were used to trumpeting their successes, not dissecting their failures. Those had been swept under the rug as quickly as possible. The executives also were accustomed to running their divisions as they saw fit. Mulally’s insistence that each area of the organization be run using common practices and principles was not only jarring, but also a direct threat to their personal authority.

Schulz was not the only one who thought the whole thing was a big waste of time. Fields, too, tried to get out of the weekly sessions.

Ever since he had been called back from Europe, Fields had jealously guarded his calendar. He thought that most of the corporate meetings he was required to attend were essentially useless. Despite Mulally’s assurances that his Thursday BPRs were the cure for this cancer, Fields saw them as one more symptom of the same disease. Fields came to his first one-on-one with Mulally armed with a printout showing how his time was divided. He handed it to Mulally and showed him how most of it was already being spent in meetings. Fields told him he needed to spend more time in the trenches.

“Listen, Alan, one of the most important things I need to spend time on is in the business unit, not getting distracted,” Fields told him. “I really don’t want to do this.”

Mulally stared at him across the desk. “Trust the process,” he told Fields.

Do I have a choice?
Fields thought. But instead of continuing the debate, he gave Mulally an update on the status of the Way Forward acceleration.

A few of the old guard thought they could wait Mulally out—pay lip service to his reforms, but drag their feet and bide their time. Eventually, they figured, he too would succumb to Ford’s noxious culture. But most could see that Mulally was different. He was far more interested in the details of the business than any senior executive had the right to be in the ancien régime, and he missed nothing. Executives had been accustomed to dealing only with the big picture. Now
they were being asked to explain the minutest details of their divisions. They might chafe against that, but they could see he demanded nothing of them that he did not demand of himself.

M
ulally’s energy was impossible to ignore. The atmosphere on the twelfth floor crackled with it, as though Bill Ford had unleashed some force of nature inside the building. Even the executive chairman was not immune from it.

Company protocol required any executive who wished to speak with Bill Ford to enter his outer office, quietly ask his secretary if he was seeing visitors, and then wait outside while she slipped into his private chambers and checked. Mulally had no patience for that. One morning, as Ford was freebasing espresso and fretting about the Detroit Lions, his new CEO simply strode down the hall, opened the glass door to Ford’s outer office, waved at his secretary, and blew past her before she could even object. Ford was slightly flustered the first time it happened, but after a while he got over it. Mulally showed up for work each morning bristling with new ideas, and Ford was often the only person he could bounce them off.

“You know what would be neat?” Mulally would say, before outlining his latest brainstorm.

It put Ford in a somewhat awkward position. Most CEOs did not stick around after admitting defeat. But this was his company, and he still had a major role to play in running it. However, Ford was also determined to stay out of Mulally’s way. As Mulally’s new order took hold, more than one executive tiptoed to Ford’s office to lodge a complaint against the new CEO’s intrusion into his affairs. Ford would cut each of them off before he could finish his lament.

“If you have an issue, take it up with Alan,” he said to each one. “I agree with everything he’s doing.”

O
n October 23, Ford released its financial results
for the third quarter—the first since Mulally joined the company. Ford
posted a net loss of $5.8 billion for the months of July, August, and September—its worst quarterly loss in fourteen years.
^*

“Let me make it clear: these results are unacceptable,” Mulally said during a conference call with analysts and reporters that morning. “We know where we are with our business, and we know why we are where we are. We are committed to moving from here to create a viable business going forward. As I have examined our performance, I clearly see the opportunities that will allow us to do so.”

It was just the sort of honesty and transparency Mulally demanded of his subordinates. He led by example. He arrived early and often worked seven days a week. With his family back in Seattle, he spent his nights poring over reports from Ford’s operations around the world.

Early on, a friendly competition developed between Mulally and two of his executives, Don Leclair and Michael Bannister, to see who would be the first one into the office each morning. Getting there first had long been a badge of honor for the finance guys—a way of establishing that they were the ones who really ran the place—and no CEO was going to deny them that pleasure. Each morning, they would get up a little bit earlier and drive a little bit faster. But Mulally was always at the office first. Bannister gave up when he realized that 5:30
A.M
. was still too late.

You guys can win this one
, he thought. After all, Mulally just lived a few minutes away from World Headquarters. Ford had given him a luxury condo in the gated Tournament Players Club of Michigan, a private golf community built around a Jack Nicklaus–designed course a mile from the Glass House.

Leclair refused to give up, despite the fact that he lived one county over in Plymouth. To arrive in Dearborn by 5:30
A.M.
, he had to get up at 4:30
A.M
. at the latest. But that was the sort of person Leclair was—a fact not lost on Mulally.

Though he had worked at Ford for thirty years, Leclair was in some
ways as much of an outsider as Mulally. While most of Ford’s top executives favored loud talk and expensive suits, Leclair was a quiet midwesterner who spent most of his days alone in his office with his shoes off. They wore their cocky overconfidence like pinkie rings. Leclair knew just how bad things were and showed it. They would dismiss dire predictions with a wave of the hand and a reminder that Ford always triumphed in the end. Leclair checked his numbers, checked them again, and saw that time was running out.

Leclair’s pessimism and drab personality left him with few friends at the company. But if his fellow executives thought little of him, Leclair thought even less of them. He knew he was the smartest guy in the room, and tended to act like it. As Bill Ford had warned Mulally in their first meeting in Ann Arbor, Leclair was pursuing his own agenda with little regard for what anyone else in the company thought.

But Mulally appreciated Leclair’s honesty, as well as his grasp of the minutiae of the business. His knowledge of Ford was encyclopedic. Leclair did not just know finance; he recalled the details of every product program and engineering decision, as well as who was responsible for each one. Mulally’s BS detector had been going off like a smoke alarm since he walked into his first BPR meeting. With Leclair, however, it was silent. He was the first person with whom Mulally felt like he could have a genuinely frank conversation.

Mulally called his new CFO into the office on a Sunday for the first of many weekend one-on-ones between them. They spent five or six hours going through all of the company’s finances. Leclair walked him through the entire business. Everything Mulally heard confirmed his worst suspicions about the state of the company and reaffirmed the underlying theses of his preliminary plan. At the end of the day, Mulally outlined the major points of his strategy for Leclair. He told Leclair that the BPR process was essential to making it all work.

“We’ve got to get everybody at the table,” he said. “We can’t do this with just five or six of us. We need everybody.”

Mulally had shared all of this with the board of directors, but Ford’s executives were all still wondering what the new boss really had in mind. Leclair seemed visibly moved by the vision of the company that Mulally offered.

“We’ve never had a CEO who knew what to do,” Leclair told him. He pledged his support but warned Mulally that many of the other executives would fight this.

“They all don’t get it,” Leclair said. “None of them are qualified for the jobs they have.”

“I’ll take care of that,” Mulally assured him.

Mulally paid close attention to what Leclair had to say, both at that meeting and during their many subsequent discussions. In the coming weeks and months, the two men would spend hours together in Mulally’s office—going over the books, dissecting each line item, and stress-testing each projection. But Mulally was worried about how negative Leclair was. He was not convinced anybody could save Ford, and his pessimism would only increase as the company’s finances deteriorated. However, Mulally’s biggest concern about his hardworking CFO was Leclair’s apparent inability to work with the rest of the leadership team.

Don knows the business better than anybody
, Mulally thought as he listened to Leclair.
But he’s not a team player, and he never will be. He’s smart, but he can’t join me in pulling everyone together
.

As a result, Mulally knew Leclair’s days at Ford were numbered. But he was determined to draw out as much knowledge from his CFO as he could before the situation came to a head.

Mulally was quick to appreciate the immense—and too often untapped—pool of talent that surrounded him at Ford. When he found someone who knew what was going on and was not afraid to say so, he brought that person to his office and listened—sometimes for hours—as he explained the flaws in some aspect of Ford’s operations and suggested ways these problems could be fixed.

Another early member of Mulally’s brain trust, George Pipas, was a veteran sales analyst and forecaster who was getting ready to retire. After watching Ford’s share of the U.S. car market decline for the better part of three decades and spending most of that time whispering under his breath about ways to stanch the loss, he had bought a house on Hilton Head and was getting ready to put Ford’s woes and Michigan’s harsh winters behind him. Mulally called him in South Carolina and asked him to get back to Dearborn as soon as he could.

“I really want to understand the history,” Mulally told Pipas when they finally met. “What do we need to do from a product standpoint to create a business that’s going to grow?”

The two men spent the better part of a week closeted in Mulally’s office, starting early, working late, taking their meals at his conference table. Pipas held nothing back. He walked Mulally through every aspect of the automobile business. He outlined the vehicle segments, from subcompacts to full-size pickups. He guided him through the competitive landscape, detailing each automaker’s strengths and weaknesses. He explained how Detroit’s foreign rivals had outmaneuvered the Big Three, and he charted Ford’s own dramatic decline. They talked about the seasonality of demand, Ford’s addiction to pickups and sport utility vehicles, its failure to maintain investment in key products like the Ford Taurus, and its confusing array of nameplates and options. In the end, Mulally asked Pipas to rethink his retirement. He told him he could telecommute from South Carolina as long as he agreed to come back to Dearborn each month and brief him on the sales results. Now that Ford had a leader who listened, Pipas was happy to stay.