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Mulally continued to rely on Joe Laymon and Charlie Holleran as well. But he knew their real loyalty was to Ford the man, not Ford the company.

Holleran walked Mulally through the media landscape, explaining which publications and programs were important to Ford and why. The press coverage surrounding Mulally’s hiring had been predominantly positive, but Holleran warned him that the honeymoon would be over soon. He told him to stay on message and start preparing for the tough questions that were bound to come.

Before Mulally’s first day in Dearborn, Laymon went over the corporate roster with Mulally. He offered two assessments of each executive—an objective one and his own uncensored view, which was often quite cutting. But Laymon advised him to move slowly with any reshuffling.

“You can’t change the team you have for a while,” he cautioned. “You don’t know how to build a car.”

Mulally agreed, but insisted on one change: He wanted Steve Hamp
out. Mulally neither needed nor wanted a chief of staff. He thought the position added an unnecessary layer of insulation between a CEO and his executive team. And he certainly did not want one who was the executive chairman’s brother-in-law.

“You’ve got to tread very carefully,” Laymon warned Mulally. “Steve didn’t hire himself. He was put here by certain members of the family. He and Bill have struggled, but he is the chief of staff.”

“My team reports directly to me,” Mulally replied. “Before I get there, you’ve got to tell Bill that.”

But Laymon warned Mulally that moving against Hamp could turn the family against him before he even started. He told Mulally to give him a chance. However, Hamp’s negativity was something Mulally could not abide. Like Leclair, Hamp remained pessimistic about Ford’s future and missed no opportunity to share his views. Bill Ford was losing patience with his brother-in-law, too. A few weeks after Mulally started, the two men had a frank discussion about Hamp. When it was over, Ford summoned Laymon to his office.

“Hamp has to go,” Ford told his human resources director. But he reminded Laymon that this would be a delicate operation. Ford had not moved against his brother-in-law previously out of fear that it would deepen the rift in the family. Hamp and his wife had their allies. They could still make trouble for Bill and his new CEO.

“Do your magic,” Ford told Laymon. “Just make sure it’s tight.”

Laymon drafted an exit agreement that included some of the strongest nondisparagement language he had ever written. It also included generous compensation. On October 12, the automaker announced that Hamp was leaving the company and that the position of chief of staff was being eliminated. Hamp’s departure still created a stir in the Ford family. But Bill and Edsel were able to keep it from blowing up—at least for the time being.

M
ulally would have to work to keep more talented executives from following Hamp out the door.

The first BPR meeting had been a bit overwhelming for Ford Credit chief Michael Bannister. He had not been expected to know
much about the rest of the company’s operations, let alone the rest of the automobile business. Though he struggled to decipher the dizzying array of acronyms and technical terms that were being thrown around by his colleagues, Bannister was fascinated to find out what was really going on in the rest of the company. However, it only confirmed his suspicion that Ford was a wreck. He found Mulally’s approach inspiring, but he was already thinking of retiring and was not sure he wanted to wait around and see how long the well-meaning CEO would last.

A bespectacled moneyman with a Tennessee drawl, Bannister had been working at Ford Credit since 1973. The company’s lending arm was founded in 1959 to support the sale of Ford’s vehicles, providing financing to customers and dealers alike. That started to change in the late 1990s when first Alex Trotman, then Jacques Nasser began bringing in outside financiers who treated it more like a stand-alone banking enterprise. They focused on maximizing profits instead of moving metal. Bannister was in Europe at the time, largely insulated from the big changes going on back in Dearborn. When Carl Reichardt came on board to help Bill Ford, he put Bannister in charge of Ford Credit’s international operations and taught him a more disciplined approach. After the North American credit business started to spin out of control, Reichardt asked Bannister to come back and take over the entire operation in 2003. It did not take him long to get Ford Credit back on track. In fact, it had become the only reliable source of profits in the entire enterprise.

Bannister wanted to believe in Mulally, but he had yet to see anyone stand up to Ford’s culture and win. Still, he liked the new CEO’s approach and decided to hold his own BPR at Ford Credit a few days after Mulally’s first one. It followed the same pattern as Mulally’s Thursday meeting, and it was just as much of a shock to Bannister’s staff. But they quickly saw the value of it. Over the next weeks and months, first one executive, then another began holding weekly BPRs in their own departments and business units. Some did it to score points with the new boss, at least initially. Others, like Bannister, did it because they saw the value of Mulally’s data-driven approach. Mulally could tell the difference, and he counted Bannister as one of his first
converts. But word got back to Mulally that Bannister was getting ready to quit. So Mulally decided to pay him a personal visit.

Mulally showed up unannounced in the middle of a United Way fund-raiser. All the employees were enjoying a catered lunch and most of Ford Credit’s executives were locked up in a mock jail. The subsidiary’s chief counsel was sauntering around the office in a pirate uniform, complete with eye patch. Bannister was more than a little embarrassed, but Mulally just laughed and commended him for keeping his employees engaged with the community. Then he asked if they could speak in private.

“How are things going at the credit company?” Mulally asked as Bannister closed the door to his office.

“We have our fair share of travails, but not anything that we can’t handle,” Bannister replied.

Mulally nodded.

“I understand what you do. I understand what you want to do. Now my question is, are you going to stay or not?”

The frank question caught Bannister off guard, but he liked Mulally’s directness. It was something he had found in short supply in Dearborn. He looked Mulally in the eye, trying to read the depth of his commitment. He liked what he saw.

“If you are going to come, and stay and make a success out of the company, I’ll stay,” Bannister said.

“That’s the plan,” Mulally said, grinning.

B
annister was still there when Mulally walked into the Thunderbird Room a few days later. The first BPR meeting had lasted only until 3
P.M
. There was more to go over, but Mulally was worried his new team was already overwhelmed. The second BPR would last all day.

He had given the executives a week to digest the basic concept and correct their numbers. Now Mulally introduced them to his color-coding system. Anything that had changed from the previous week would be highlighted in blue. The data itself would be presented in the form of bar charts, starting with the actual results for the most
recent period and continuing five years out. Those projections would be updated constantly as new information became available. The BPR system was a two-track process, Mulally explained.

“We’re going to be checking our progress against the plan,” he told the team. “But, at the same time, we’re also going to be working on a
better
plan. It’s all about continuous improvement.”

The plan goals would be displayed as blue bars, while the current forecast for each period would be plotted as a red diamond. That made it easy to see if the forecast for any given piece of data—whether it be Brazilian sales, European marketing costs, or U.S. profits—was on plan, off plan, or ahead of plan. Similarly, the status of every program or project would be displayed as a colored box: green for those that were on track or ahead of schedule, yellow for those with potential issues or concerns, and red for those that were behind schedule or off plan. Any change in status would be reflected by a two-color box divided by a diagonal line—the top color showing what it was the previous week, the bottom color showing what it was now.

The point of the color codes was to make it clear what had changed since the previous meeting and where potential problems existed. Mulally encouraged the executives to apply the colors honestly.

“The neatest thing about this process is that we’re going to get back together next week,” he said. “I just want to know that you know what’s happening, because I’m going to see you again next week—and I
know
you’re going to make progress by then.”

Mulally used those early BPR meetings as a bully pulpit to drive accountability, enforce cooperation, and ensure execution. If any of the executives in the Thunderbird Room still doubted that he was serious about changing Ford’s culture, those sessions quickly dispelled their illusions. If Mulally’s tactics seemed harsh, they needed to be. Having correctly diagnosed the disease that plagued the automaker, he set out to eradicate it with a surgeon’s skill. Yet as hard as he could be on the senior executives, Mulally also went out of his way to encourage each one of them and let them know that he was not blaming them for the faults he was finding with Ford.

“You
have
a problem,” he would say, with a squeeze of the arm and as smile. “
You
are not the problem.”

Mulally also worked hard to make each executive feel a part of a team—a team that could win. At the end of one meeting, Mulally got up and walked to the screen. It displayed a financial chart showing a long, steep decline followed by a modest rise at the end. It looked bad, he acknowledged, but he told the team he had seen worse at Boeing.

“Guys,” he said, pointing to the trough, “let’s get to the bottom as quick as we can, because let me tell you, the ride up is a lot of fun.”

B
y the end of October, Mulally had finished explaining the BPR process and the meetings were going a lot more smoothly. Instead of taking the better part of each Thursday, they were now over in a few hours. But Mulally was frustrated. He had explained the BPR process and had explained the color codes. He had assured the team that this was a safe environment. Yet all the charts remained green. By October 26, Mulally had seen enough. He stopped the meeting halfway through.

“We’re going to lose billions of dollars this year,” he said, eyeing each executive in turn. “Is there anything that’s
not
going well here?”

Nobody answered.

That was because nobody believed Mulally when he promised that honesty would not be penalized. In the past, high-level meetings were arenas for mortal combat at Ford. Executives entered the room with keen eyes, searching for flaws in one another’s plans. They examined their own presentations beforehand like generals surveying their lines for weak points. They were sure Mulally was just trying to set them up, and none of them was foolish enough to fall for such an obvious trap.