#151 Alan Mulally: The Power Of Working Together
01:14:45 Share

When you meet somebody, you always have three questions. One, who are you as a person? Is this about you? Is it about I versus we? Is it about me versus service? The second question is, you're the leader. Where are we going? Where are we going? What's that strategy? What's the BPR? What's the Creating Value Roadmap? Then you got the third question is, Shane, do you see me? Do you see me? ♪♪♪

Welcome to The Knowledge Project. I'm your host, Shane Parrish. This podcast is about mastering the best of what other people have already figured out. If you're listening to this, you're missing out. If you'd like special member-only episodes accessed before anyone else, hand-edited transcripts, and other member-only content, you can join at fs.blog.com. Check out the show notes for a link. Today, I'm speaking with Alan Malaly.

Alan has an aeronautical engineering degree from the University of Kansas. His accomplishments at both Boeing and Ford are legendary. He took over Ford in 2006 when Ford was in a downward spiral. The stock was $1 and the company was on pace to lose $17 billion, which is the worst year in its 103-year history. I wanted to speak to Alan because I wanted to know how he turned the company around.

We discuss where his formation of leadership comes from, his working together principles, the working together management system, creating a culture of love by design, the role of the leader, what happens when people choose not to be a part of the working together system, and how those conversations go, and how he uses the system in his family, and so much more. This is one of my favorite conversations ever. It's time to listen and learn.

The IKEA Business Network is now open for small businesses and entrepreneurs. Join for free today to get access to interior design services to help you make the most of your workspace, employee well-being benefits to help you and your people grow, and amazing discounts on travel, insurance, and IKEA purchases, deliveries, and more. Take your small business to the next level when you sign up for the IKEA Business Network for free today by searching IKEA Business Network.

Alan, let's just dive right into this. You've served your family, Boeing, Ford, and communities around the world in such a positive way over the years. How did you end up with this formation of leadership? And can you share your service journey with us? Absolutely. Well, first of all, it's a pleasure to be with you. I think that really is a good way to start. I grew up in the Midwest in Lawrence, Kansas, also where the University of Kansas is.

We had pretty modest means, but we had a lot of love in our family, starting with our parents' love of us. Over the years, I can remember very clearly the lessons that they shared with me and who they were as a person in addition to what they did.

And so every morning in the same, one of my parents would say these lessons to me, just to make sure that I was remembering them and understanding them. So one day my mom would say, now remember, honey, the purpose of life is to love and be loved. I'd say, oh, mom, that's great. I remember. I think that's good. And she said, but remember, in that order. Okay, thank you. Then the next day, my mom or my dad would say again, when I was getting ready to go to school, well, now to serve is to live, honey.

Thank you, Dad. That's great. Then the next day, one would say, seek to understand before you seek to be understood. I'd go, that's good, too. I remember that. And one that really stuck with me over the years is, it's nice to be important, but it's more important to be nice. Thanks, Dad. And then the one that probably impacted me the most, Shane, was when they said, by working together with others, you can make the most positive contribution to the most people.

And then, of course, they discussed lifelong learning and continuous improvement and respect everyone. We're all creatures of God and we're worthy to be loved. And then one that really was meaningful to me as I got married and started our family stuff is to develop one integrated life to deliver your life's work.

So those are the things that my formation was based on. And of course, I was a normal child growing up. And so I wanted to fit in. I really, being modest means, I really wanted a pair of Levi's and some Weijin shoes. So I decided that, and I can remember deciding this, that if I were going to be able to get those jeans or maybe get a car and go to the University of Kansas someday,

that to serve as to live was going to be my strategy. So I started my service work with the TV guide routes, newspaper routes, a lawn mowing business. I was a bagger, a checker, and then a night manager at the Dillon's grocery store.

I was a carpenter and a ranch hand and a farm hand. And then when I started school at the University of Kansas, I also, for the entire time I was there working on my degrees in aeronautical and astronautical engineering, I continued to work and serve the engineering department at the University of Kansas. I followed that with joining Boeing and then also later at Ford. And the thing, Shane, that really I learned was that I just love the serving.

I loved the looks on the people's face I was serving. I'd ask them for their suggestions for improvement. And somebody told me I was the only person as a checker in the Dillon's grocery store that actually got a tip. And I remember asking the person that was coming through the line, why are you tipping me? I could understand that when I was a bag boy. And they said, well, first of all, you took care of us. You asked us if we found everything that we needed. Did we have the coupons for the items that are discounted?

Work was always service, and it was just fabulous. I felt good about it. I wanted to be better at it. And, of course, I also included all of the stakeholders because I knew that if I did that, including my parents and family and the leaders in the areas that I was serving,

that we would actually come up with even a better plan to serve our customers and serve each other and all the stakeholders. That's my formation. Then my further development at Boeing and Ford, and especially at Boeing initially,

I was joining a company that was world-class at project and program and business management. So I combined those personal values and beliefs and behaviors with the learnings of large-scale system integration and business. Creating businesses that are profitably growing for the good of all the stakeholders. So that's how I became who I was. I took the same, or I am like...

I took the same lessons when I was asked by Bill Ford to join Ford, to help Ford. I want to talk a little bit more about the story of how you ended up at Ford in a second. One of the things that you said that stood out to me was you have to build an integrated life to deliver your life's work. What does an integrated life mean? I found that to be so useful. And one day my parents made a drawing

and it had a circle, and inside the circle, it'd have smaller circles. And the circles would be your work life, your family life, your spiritual life, your community life, all your different lives. You could put as many lives in there as we each have. And then on the top of the circle, it said one life, and then underneath the bottom of the circle, it said life's work. And remember, work

To me and my parents, it was the same as service. So my life's work is service, and I'm going to integrate all of those components. And people ask me a lot of times, well, how do you do that? I said, well, first of all, you decide what's really important to you in each one of those circles. And then also, look at your calendar in the morning. Look at your calendar at night. When people are managing their work-life balance, they might think that, oh, well, I have something planned with the family next year.

So I got that one covered. No, I think you're going to have to think about that every day. So the idea of an integrated life is that you decide what's really important to you and be honest with yourself. And also you're looking at your calendar near and longer term. And are you paying attention to the things that you really believe are important in your life to serve? I like the term integrated because so often we sort of forget about these other components, right? And then we sacrifice everything.

our relationship with our community or, you know, part of integration could be your overall health. And we sacrifice that in pursuit of a myopic sort of focus on one part. And then inevitably it crumbles. Oh, exactly. Uh, Shane. And I think that you can see how fast you would get. This would be a discipline process. If you look at that drawing, uh,

And you look what you have put down there is what's important to you. And you look at that each day and just reflect on how it's going near and long term. You get to a place where you really get clear about your activities and having an integrated set of activities. I remember when we, when the kids were young and we'd have our family meeting,

And we'd sign up for the different things we're going to do to help each other. And I would take my items back to Boeing and my assistant would put that on my calendar. And some days I would just disappear in the middle of the day for an hour or two to go to a parent-teacher conference or something else. And everybody knew where I was and they knew I'd be back.

I think that it's a very reliable process, but you have to follow the process, would be my advice on that. I want to talk about the decision to join Ford, because when we talked before, you said you originally were actually not going to join Ford. So can you walk us through that decision, how you ended up joining Ford, and sort of some of the immediate cultural differences that you felt between Ford and Boeing? And then after that, we'll dive into some of the principles and working together management system. Oh, sure.

Clearly, I love Boeing, and I always have. I was on the design team of every Boeing airplane. I realized very quickly that at the time, the airplanes were the first internet because we were actually connecting people around the world. People could find out that we had more in common than were different, and we could then choose to work together for the greater good.

And so I never thought I was going to ever leave Boeing. And I had a lot of opportunities along the way. One day, Bill Ford called. I'm going, Bill Ford? The great grandson of Henry Ford? And I had a Ford vehicle when I was growing up. And I followed Ford a lot because as I learned more about history and World War II and Ford and Boeing working together, I'm just always very interested in it. So I

I knew I was in trouble when I was talking to Bill because I wanted to know more. I kept asking him all these questions about why they were in the situation they were in. And he shared the whole story with me. And they had become a house of brands and purchased Aston Martin and Jaguar and Land Rover and Volvo. And still 70%, 80% of the business was Ford, which as you know, you can't be world-class too many things at the same time.

And so they were going to lose $17 billion. And he said the biggest issue he had was getting people to work together around the world to use all these fantastic, smart, and talented people. I thought about it and talked about it as a family. And I initially called him back and said I was going to stay at Boeing. And a couple of the kids, we have five kids, and Nick and I have been married for 52 years. And

And Nikki and two or three of the kids were outside my little office listening to this because they really encouraged me to go. Come on, Dad. We know all about airplanes. We know all your friends here. We want to drive a Mustang and see everybody. And so they walked in the room, and one of them said, So, Dad, we listened to this, and we're going to Ford, aren't we? And I said, Yeah.

We are. And the lesson learned out of that that I've learned over the years on UF2 is you think about it, you look at it from every possible angle, and at the end of the day, you decide. But the most important thing is that when you say it and you start to act on it, you really need to think about how you feel about it.

And when I went through that process, I knew that this is where I wanted to serve next. And people ask me a lot, why would you choose to lead Boeing? You're the CEO of Boeing Commercial Airplanes. You've been on the defense side. You love your work. You're an airplane designer. You love the business.

And at the end of the day, I felt like I was serving a second American and global icon. Two really important companies that have made such a difference to the United States and the people around our world. And I felt like it was the all time I was being asked to serve to save this second American and global icon. It's incredible. I mean, what you did at Ford was no short, like it was one of the

biggest turnarounds in history. I think they were on pace to lose $17 billion when you took over and nearly bankrupt. And then the transformation over the next decade was just astonishing.

And in researching and talking to people who worked with you, you're known for these working together principles, practices, and a culture of, I hope I get this right, love by design. What specifically are those principles and practices? Super, super question. And it's the essence of working together in my life and service.

There are a few of them and I want to touch on each of them. So these are, to your point, these are principles and practices that create a culture of love by design, meaning that it's demonstrating your love for what you're doing as an organization. It's also demonstrating your love and how you feel about all the participants and their contribution.

And it's also by design. So you're creating not only the principles and practices, but also a reliable process and expected behaviors of all the participants as you work together to deliver your compelling vision, whether it's at Boeing or Ford or a specific airplane or a specific car. And so the first one, and these are written down,

People have them on the car. They carry around. They're in the offices. And one of them, the first one is people first. Love them up. And the reason is that these are talented people that are working on these programs. I'll just use the 777 airplane as an example of a major program project in business.

hundreds of thousands of people that are working on this airplane to design it all around the world. They're talented, they're motivated, they believe in the vision of getting people together so they can work together around the world. So appreciating them as a human being and appreciating their talent and thanking them and including them. So every one of these things I'm going to share with you, to your point, is a demonstration or an element of showing your love for all the participants.

So the second one is including everybody. So when you're designing an airplane, we include not only the airlines, but we include, of course, all the employees, all the suppliers,

all the certification agencies around the world, all the cities in which the airplane is going to be used, and all of the investors and all the bankers, all the people that are participating, they're actually represented on the leadership team. So their voice and their thoughts and their suggestions are included in the development of the strategy and the plan and the accomplishment of the objectives. So include everybody.

The next one is coming together around a compelling vision, a comprehensive strategy, and a relentless implementation plan. So the power of that vision, as we all know, is really, really important. Is it meaningful? Is it have purpose? Is it going to serve not only the stakeholders, but the greater good? And you can imagine how that was at mowing the fort, because

our whole life is dedicated to safe and efficient transportation. Then having a comprehensive strategy for the product, for the process, for delivering it, for all of the people, including the working together strategy. Then our relentless implementation plan. And that's the business plan review, which we'll talk about, which gets a lot of attention over the years, where every week we meet with all of the stakeholders,

And we go through in an hour and a half, two hours, we go through every element of the strategy for accomplishing our objectives. Also, the status of that, we actually color code, all of the team members color code their strategy plan on how it's going. Red or green, they have its own plan. Yellow, they have an issue, but they have a solution. And red, they have a new issue, but they're still working on the solution for it.

And the next one is having clear performance goals and one plan. Most companies have many plans and most people are trying to figure out what the plan is, as we all know. Facts and data, really important. We care what you think.

But we also want to know what are the facts and data that you're looking at to draw your conclusions? Because as we go forward, especially on working on a yellow or a red, we all want to know those facts and data so that we together can turn the reds to yellows to greens.

i then we move to the some more demonstrations of love so expect the unexpected and expect to deal with it and so we're going to share the reality of our situation every week so that everybody knows what the opportunities are but also what are the issues that we need to to deal with and that everybody knows the plan the product the process the people that work in the other plant they know what the status of it is

And also, Shane, they know the areas that need special attention. So think about what that respect for people means. When you share these things, I mean, many people, many believers, if they have a red item, first of all, that embarrasses them. They think they're not doing their job as opposed to that red item is a gem. I clap when you have a red because you're not red. It's your item's red. Thanks for sharing that.

Now we all can work together to help you and us turn the red seals green. And then the attitudes are really, the attitudes, the beliefs, and the values are really important. And what we really look at are the behaviors because that's what we can see.

And so we have these expected behaviors that we have zero tolerance for violating them. So proposing a plan, being positive, having a find-a-way attitude, respecting each other, listening to each other, help each other, appreciate each other. You can see very sophisticated word shape, very sophisticated. But we can see this and we can help each other in our personal development plans always be moving forward and growing in all of these behaviors the way we treat each other.

Then emotional resilience. This is a creative process. It's innovation. We're going to have issues along the way. And so we're going to trust this process of working together and we're going to trust the process of turning the reds to yellows and green. And the last one that everybody absolutely loves is have fun and enjoy the journey and each other.

And as I mentioned, every day we'd wake up and every business partner, we'd get together and we'd say, you know, thank you. How can I help? And then enjoy each other and also enjoy the journey of creating these phenomenal products and services. Now, there's one corollary to that, Shane.

that's really important and that is zero tolerance for violating this process of working the business plan review the creating value roadmap including everybody uh all stakeholders on the leadership team zero tolerance for violating that operating process and zero tolerance for violating these expected behaviors because we all can see each other we're together every week and you can imagine

how seriously everybody takes the process and the behaviors. And as we continue our discussion, I'm sure you're going to want to know, well, what do you do, Alan, when people are not committed to following the process and expect the behaviors of working together? But we can talk about that as you wish. You said trust the process.

And that sounds great, but you're coming into Ford and you're implementing a completely different process than the culture has had before. Sure. How much resistance did you get? How do you get the buy-in for people to actually trust the process? You're an outsider coming in, right? How do you corral the people to trust the process and then follow the process?

This is a really good question. And everything you said, there's truth in that. Absolutely. And so what do you think the one piece of paper that I brought with me from Boeing to Ford was this piece of paper I just described to you? And when in the first meeting, when Bill introduced me to the team,

I shared with them this one piece of paper. And the looks on their faces were phenomenal. They'd never seen words like this. People first love them up. If you make a mistake and you violate the process of the, you just say you're sorry. And so I could tell by the looks on their faces, and they're from all around the world, and I could tell in their faces that, wow, I'm going to have to, it's going to be really important. I spent a lot of time sharing with them what these mean.

And about that zero tolerance policy and the commitment to commit to them. So I spent a couple of hours a day for the first few weeks making myself available.

to the entire team and individually as they they wish to answer their questions about these principles and practices and then i said okay uh here we go and we're going to learn about it because we're going to start so we pull together on the on the business plan we we updated the creative value roadmap to restructure ourselves to match our production to the real demand and um

develop a competitive cost structure. At the same time, we committed to develop a new product line, small, medium, large, cars, utilities, and trucks, everyone being best in class in terms of quality and fuel efficiency and safety and smart design and affordability. And then also taking out a small home improvement loan of $23.5 billion to finance the restructuring, but also refinance the product development plan to support

Other customers and our growth. Then the last one was work together as one team worldwide on our one forward plan.

And of course, the way Ford was set up at the time, every Ford was different in every country around the world. So Henry Ford never thought that that would be the way it would end up. But you can clearly see that we would never be competitive if we were trying to compete with all these different Fords against these global powerhouses that we all knew. So the biggest part of that strategy was we were going to pull together, work together as one team,

And we're going to use all of our talents to work together to create this one forward plan. So we developed the strategy. We started the business plan review.

I selected the team from all around the world, which was relatively easy because everybody knows who the leaders are in each of the disciplines, whether it's engineering, manufacturing, or procurement. So I talked to everybody, looked at their performance management, 360s and stuff. And so we had the best of the talent all around the world, some of which had never worked together. Started our business plan review. I'd always start the meeting.

And then each of the members, and I'd go through the vision, strategy, and the plan status at the company level. Then every member would go through their area of responsibility and share their contribution on the strategy and the plan. And then also, as we mentioned,

They also show the status with their color coding. So now here's the essence of your question. We start our process. The behaviors are getting really good. We have about 300 charts with the entire team. And we've also shared with them now for the first time that we lose $17 billion. And all 300 charts, Shane, were colored green.

All 300 charts. So this is the essence of your point. So here's this new person. We shared a new culture of working together and transparency and timeliness and supporting each other and respecting each other.

And all 300 charts are green. So I stopped the meeting a few weeks in a row and said, is there anything in any of your areas of responsibility that's not going well? We are losing $17 billion. Of course, the eye contact goes down to the floor because they don't know me and they know that the culture that they were in is if you, like a lot of companies, if you brought an issue to your supervisor or your boss, the CEO,

and you didn't have a solution, then you seem to disappear because a lot of cultures are you only bring an issue if you have an answer. That doesn't allow it working together the way we're talking about where you can move quickly on the issues. So they didn't know what would happen if they should have read. So finally, the leader of North America, they had an issue with the launch of the Ford Edge in Oakville, Canada.

with the actuator and liftgate. And so he's having his meeting, his BPR before ours, the night before. And up comes the launch chart, Shane, and it has three columns for technical readiness, schedule, compliance, and financial impact. And all of them were colored green and they just stopped production.

One of the biggest things you could ever do is cause a lot of issues. And so he says to the team, he said, I think this is one of those red things Alan's talking about. And one of the members, one of the vice presidents said to him, well, good luck because you know what happens when you have a problem, you don't have a solution at Ford. And he finally said, well, I think we need to trust the process. I'm going to trust Alan.

And then the other vice president said, Shane, well, it was nice knowing you. Take care. We'll fill it red for you. So red, red, red. So the next day, we started the business plan review. Green, green, green, green. And up comes this red chart on something really important, a launch of a new vehicle.

And so he explains it very succinctly that here's an issue that came up. We're working on it. We don't have a solution yet. And at that point,

I started to clap. And I mean, all the eye contact went to the floor. I could feel the air dissipating. And they're kind of looking at me and they're looking at the floor and they're looking at Mark, the speaker. And then later they told me that they got that sign. I clap meant the two large doors behind us in the Thunderbird room at the world headquarters were going to open up. Two large human beings are going to come in. They're going to extract Mark from the meeting.

That would take care of that. So I said, so any initial thoughts from the team on how we can help Mark? And Derek Cusack, who was leading engineering worldwide, said, I've seen a problem like that before. We'll get you that data. Betty Fowler, who was leading quality worldwide, had a similar comment. And Joe Henricks, who was leading manufacturing worldwide, said,

You know, we're going to figure this out. You're going to need some manufacturer engineers up in Oakville, Canada. I'll get them identified and get them up there. So when we have a solution, we can switch out the parts and get the production going at a timely manner. That took, you know, 10 seconds, 12 seconds. We were on to the next chart. Green, green, green, green. Next week, only one red chart. And that was Mark's again. And I was looking around the room and they're all looking at me and they're looking at Mark and they can't believe that Mark's still there.

And then had the same comment, thank you very much. And then finally, two or three weeks later, they had a solution that turned to yellow. Two weeks later, I think, it turned to green and all the vehicles started flowing around the world. So Shane, guess what the colors of the slides look like that following week? Not all red, but they look like a rainbow. And everybody then decided to answer your question,

that not only were we going to trust the process, but wow, this trusting the process would allow us to remove all the stress out of our individual lives, be able to share what the real situation is, and also be able to count on this working together process to trust it, that if we know what's going on and we know that our behaviors and our process allow us to deal with it, that we can turn reds to yellows to greens.

And at that point, Shane, I knew that no matter what happened at Ford, whether it was Jim and Chrysler going bankrupt, or whether it was the tsunamis around the world, the competition, whatever, I knew that we could use this working together process and create a near-term and longer-term value for all the stakeholders in the greener good. What stood out to me as you were saying that is just the consistency, right?

And if you had a lot of variation in your approach or how you handled it, I don't think you would have got the same results you did. Shane, that is really critical. And when we talk about the reliable process, the system for doing that, one of the biggest single principles is the discipline.

we're just just imagine you're on the team and every week 7 a.m 7 to 9 a.m everybody's connected around the world and we're going to go through this i've gone through my introduction of the vision strategy and plan for 45 years every week i think i maybe missed 10 meetings

Because wherever you are, you phone in or you link in. And the kids used to link in with me if we're somewhere because they just love watching the colors and watching them all change and watching everybody try to help each other. And so that discipline of following the process and also to your question or your comment, the discipline of the behaviors.

See, if somebody would go after somebody or act like they knew what the answer was or be rhetorical questions or whatever, anything that would cause an unsafe response

a culture of love by design where people felt like they're going to be a victim or be made fun of, then their commitment to sharing everything is going to go down. And so it's a commitment and a discipline to the process and a commitment and a discipline to the behaviors on how we're going to treat each other and how we're going to be treated.

I think that's what creates the psychological safety, right? It's not only the commitment, but the consistency and then the discipline to keep following it up. And let's go to your question now, which is how do you deal with people who either don't commit to the implementation of the working together system or choose behaviors that don't align with what's expected? Great, great, great question. And just one comment about your last comment, which is very important.

is that what happens so quickly is the confidence that's built up with all of the participants on the team. Because you can imagine when you start solving issue after issue, because this is a creative process, you're creating something out of nothing.

And so you're expecting the unexpected, you're expecting to deal with it, and it's working. And so you can imagine the confidence that you get in the team. Plus, their stress levels are way down now. They sleep at night. They know they're going to make progress. And so I think that's really an important point because the myth that that's not a safe organization, that you're not going to be able to have this phenomenal working together success. Okay, now,

At the first, everybody's trying. I also told them, you know, if you violate this or you go after somebody or you don't respect what they said, just say you're sorry. Well, they'd never heard the love word. I got the forward, but they also had never heard the sorry word. Hadn't heard that either. So just say you're sorry and then jump back onto the expected hitter.

So every once in a while, I'd have somebody that would go after somebody or thought they knew more than the person and kind of attack them in an aggressive way as opposed to asking for a question for clarification or whatever. So I'd follow up to their office, and in one version or the other, this is what would happen. And I'd say, now, what did you think about your behavior today in the meeting or whatever the situation was?

And they'd make a comment about, well, you know, I wasn't probably the best that I could be. And I said, well, no kidding. And what do you think that meant to the team? Did you watch what happened when people started to be a lot more careful to share? And yes, I did. And so remember, look at the same piece of paper on the principles of practices. The reason we're doing this is that we need the hearts and the minds of every participant, every stakeholder.

And then the person would say, oh, I know, but I don't know whether I can do that, Alan. This is not the way I grew up. That's not who I am. I know I'm command and control and I can be a little bit of a bully, but I've done very well and it's paid me well and I have more and more responsibility. And I said, I know. And if you don't want to commit or you can't commit,

to these principles and practices, it's okay. And I look at their face and Shane, I could see what they were thinking. They thought I meant, oh, I mean, because I'm so important that I can start to treat people like I always have treated them and not move in this direction. And so, and they even say that sometimes, well, thank you very much, Alan. I said, no, what, okay. What I mean by okay is it really is okay because you're making a decision to move on.

And it's okay. And remember that first principle, we still love you. You're a human being, you're a creature of God. And if this doesn't work for you, respecting people, listening to each other, helping each other, then it's okay and you're making a decision. And if you want to commit to it, we can get you help and get you a coach, you're a dynamite person, very knowledgeable. But if not, we wish you the very best. And also, we all need to know what you're going to do.

And so I'd like you to go home tonight, think about it, talk about it with the people that you love and trust, and let me know tomorrow whether you're going to commit to moving in this direction. I know it's going to be different. You have a long career, and we'll have you tell all the rest of the team. We'll agree on the two or three things that if you improve those, we'll move you in a very positive direction into working together. And then we'll be supportive, and we'll help you.

So they'd come back the next day and one person would say, I've thought about it and I don't think I can do it. And we would say, we wish you the very best. Had another person that always liked to do rhetorical questions, which is not very healthy for working together. Like you're trying to, you ask the question, you know the answer so that you can show everybody how smart you are. Not working together.

I had the same conversation with her. She went home, came back and said, "Alan, I'd like to move in this direction because this is really who I am. I feel like I've been violating my true self for a lot of years."

and she became one of the most fantastic leaders I've ever worked with. Because once you say that, and you say that to the team now, and you say it to me, because remember, they're not working for me now. They're working for that vision of the company and the service that we're providing, and they're working for all of their colleagues. And so she just became one of the most fantastic at working together leaders that I've ever worked with. So, and again,

It's their decision because it is their decision. 80% of the time that it happened, they moved in the direction of staying and making a commitment and making great progress on working together because it goes back to just basic fundamental human values that are powerful. Two rabbit holes there. The people who stayed after, I love how you phrase it. You're choosing this behavior. And if you're choosing that behavior, you're choosing to opt out.

The people that stayed, how quickly did that behavior change? I can't imagine in my head it's this overnight thing. Oh, yeah, because remember, you're on the team. And every Thursday, you're sitting around a round table. And you're also looking at monitors inside the table of all the people that are around the world. And every member of the team's there. You've just gone through all your reds and yellows and greens the week before. You would never...

You wouldn't possibly be able to have a red and say to the team, can you imagine saying, I know I was really busy this week, y'all. I didn't have time to work on that. To hell with all of you. I don't think so. Can you imagine what that conversation would be like out on the playground?

Because they're not working for me now, they're working for what we're trying to accomplish. And so what we'd see is when a person made a decision to move in this positive direction, they'd be, first of all, they'd be a little more hesitant for offering their thoughts or questions, which is understandable because they're thinking this through. How do I do this when I do it in a respectful way? And then pretty soon after two or three weeks,

They, they're watching now the behaviors of other people that are doing this. They're getting comfortable with it. And then they just start moving in that direction. And every once in a while, because of the sorry thing, they'll say, can you imagine what happens when, when a person would say, you know, that's not the way I really meant to say this. I know that was a little abusive, but I'm really sorry. And then we all look at them and they know we're saying, well,

Start again. And so you get this unbelievable support that you can really move in this direction pretty decisively. Of the people who decided to leave, did anybody ever at any point come back to you after they left and said, you know what? I really want to get on this boat. I want to get on this ship with you. We had a few that as we were growing, we had opportunities that could use their skills.

And they approached me or one of the senior people. And people tell me that those are some of the most phenomenal conversations they've ever had. Because if somebody comes and does that, then we know it's going to be okay. And 99% of the time it was. Because when somebody gets to that place, they have really thought about it and reflected on who they are as a person and what they do.

And, you know, what really happens in this, Shane, you're really getting at it is who you are as a person is going to have more to do with your success and whatever you're choosing to do than anything else. Marilyn Gist, who asked me to work with her on her phenomenal book,

of the extraordinary power of leader humility. And she actually wanted to have a couple of chapters in there about working together and how humility really supports that. And in her book, she really did a phenomenal job of laying out a simple model for humility. And what does that really mean? And one of the things that she said was, when you meet somebody, you always have three questions.

One, who are you as a person? Is this about you? Is it about I versus we? Is it about me versus service? Are you about what we're trying to accomplish here, this compelling vision for the organization? Or is it about you? The second question is, you're the leader. Where are we going? Where are we going? What's that strategy? What's the VPR? What's the creating value roadmap? Then you got the third question is, Shane, do you see me? Do you see me?

And how many times have you been in a line meeting somebody and by the time that they have reached out to shake your hand, their eye contact has moved on even before they looked at you. They don't see you. And I don't see you means that I respect you. I care about you. I'm interested in you. I want to thank you because we're going to do this together.

And together, we're going to create a lot of value for the greater good. It's almost like a presence feeling, right? You can tell when people are present in a conversation and when they're not. Like if you have your phone sitting on the table and you're talking to somebody, you're not fully present in that conversation because at any moment, if that phone dings, you know that I'm just going to pick it up and...

and read it. But people feel it when you're present and they feel respected and they feel listened to and they feel heard. All of these things that go into your culture of safety as well, right? Where what does everybody want? They want to be loved. They want to be respected. They want to be listened to. They want to contribute to something larger than themselves. And to do that, we have to be consistent. Absolutely. Now, listen to what you just said. You just described

a working together culture of love by design. It was designed this way. I mean, I'm an airplane designer. It was designed because we wanted that culture where people felt everything that you just described. And also to your point, when we're doing a business plan review, there are no devices. If you pull out your device or you're looking at your computer, we just stop the meeting and look at you. Can you imagine how quickly you stop that?

Because everybody knows the principles and practices are on a piece of paper. They're sitting up there in front and you're choosing not to respect this organization and each other. And you're not present because we need you. We need everybody. So it's really cool. You said that because it doesn't see, you don't, you don't need to stop very many times for everybody to understand that doesn't work, that you need to be present within two months.

And when I arrived at Ford, we were on our way. The colors were all showing up. The behaviors were getting just fantastic. The stress was going down. The issues we were dealing with were considered gems. And we're going to solve them together. And we did. The clarity on the behaviors and the clarity on the process we're going to follow. And then backing that up for zero tolerance. And then appreciating it. Thanking people.

absolutely accelerates the implementation of the working together system. It also, and from the outside, not working at Ford or never working at Boeing with you, it strikes me that it almost creates like a transplant. You either take it, it either takes or it doesn't, but the body becomes the reinforcing mechanism, or in this case, your fellow, your peers, your colleagues,

become the reinforcing mechanism. And so the role of HR in my head, I would say the role of HR is changing, right? It's less about grievances and complaining. Now it's about hiring and attracting talent and unleashing them because people know when they're not fitting in and the culture is such that it just forces you out. Absolutely. And just another point about what you just said, part of the working together system that we'll talk a bit more about

is continuous improvement and lifelong learning and continuous improvement. So our performance management, our 360 process,

You now know exactly what that's about. You're going to use all the stakeholders, all your colleagues around that roundtable. And every year we ask them about how we're doing, including me. And what would be one or two things that if I could improve that behavior, that character or that skill, it would help us help people.

me individually and also help our team and our business if I make an improvement on that. So every year, every member of the team had their one or two items that everybody else knew about. To your point, everybody else is now supporting. And so very easy then to say, give somebody feedback

because we know what they're working on and we can give them an example. And so people want the feedback now because they know it's facts that they're looking at. So to your point, stakeholder-centered coaching, we know it from Marshall. I didn't know what those words meant until I met Marshall, but I knew we were doing stakeholder-centered coaching with our work in the management system. And he thought that was the coolest thing is that we had a whole company led by the leadership team

that not only was leading with stakeholder center leadership, because we're including all the stakeholders, but also we were leading with stakeholder center coaching, meaning that we were helping our colleagues

further develop themselves individually and as a team and as a business. You feel good about it and you're getting more and more effective. People are benefiting from it. And you're feeling that satisfaction, a meaningful accomplishment and smiles on their faces. It just builds on itself. It strikes me that we only receive

or we only really want feedback when we feel safe and we only offer real feedback when we feel safe. And the reason that I think that is not only from our conversation right now today,

But I'm thinking most people at a workplace, you know what's holding your colleagues back. You know the one behavior they do that undermines them every time or self-sabotages them, but you don't tell them. And I think you don't tell them in part because it's not because you don't love them or you don't want them to succeed. It's because you don't feel safe telling them. You don't feel safe in that relationship. Absolutely. Shane, think about how this system deals with that because

When you are this clear about the expected behaviors, well, you have set everybody free, right? Yeah. Because if you're going to provide behavior to somebody and you don't have clear expectations about what the behaviors are expected, well, it's just that's really hard. They don't know why you're saying it to them. They don't know how that fits in. And that's why when we look at those expected behaviors that we just described in the principles and practices, the reason that they...

That's okay for us to take a stand that way is that those are so fundamental to respect the people's dignity. And all the religions of the world, everyone has tried to describe these, right? And so, and the reason that works is you're respecting people's dignity as a human being, as a contributor. And everybody knows that that results in that satisfaction of meaningful accomplishment with individually and as a team. And so we've never...

We look at those behaviors all the time and we just check on them, make sure we think they're absolutely the right thing. But I think it's because for thousands of years, uh,

We've all been trying to one way work to create this kind of environment. And that's what we're doing with the Working Together Management System. So talk to me a little bit more about the Working Together Management System. I think we've come at it through a couple of different angles. Piece it together for me in the sense of like the whole and then break down the parts that we haven't talked about. That's a really neat way you said it too, Shane, because they're elements of a system.

And, you know, as an engineer, my whole life is around systems because there are lots of different pieces of a system and they all work together to contribute to the greater good. And think about a Venn diagram, another circle, just like the one life, life's work. So you draw a circle and that's the working together management system is what's inside the circle. So at the top, put a circle and that says principles and practices.

Then put another circle going around to the right and put another circle and put governance process in there. Then go down a little further and put another circle and put leadership team. Then go start going back up, put another circle and it says creating value roadmap. Then go one more. Your last circle then is business plan review. In the bottom of the circle,

put our culture. And we'll put this diagram on the website for the show notes. So everybody can just pop up and see it. Yeah. That's great that you're going to do that because it's a, it's a gift and we worked on it forever to describe it like this. And so again, when you look at these five elements and you can see how they work together to create this, this environment. So we covered the principles and practices.

In the governance process, that's the way we manage the overall business. So that includes all the shareholders, the stakeholders, the board of directors, the leadership team,

And then the process of the credit value roadmap and the business plan review. Then when you look at the leadership team, and remember the word leader is inside leadership. So it starts with the leader because you can imagine if you don't have a leader that is actually committed to this character and skills, that it's going to be very hard to have this operating system and these expected behaviors. So the

The things that are clear there is you're going to include all of the stakeholders. You're going to coach and facilitate as opposed to telling everybody what to do. You're going to be leading with humility and love and service and courage and discipline and resilience and civility. Authenticity, meaning that your behaviors are aligned with your beliefs and your values and also positive mindsets.

And you're going to be responsible for the working of the management system with zero tolerance for violating it. So everybody's, that's our job are these things. And then your performance management and your continuous improvement in your lifelong learning. Then when you move over to the creating the roadmap, that's the strategy. For example, the strategy of Boeing was to make a complete family of vehicles that can go point to point and nonstop all around the world safely and efficiently.

to get people together. Or Ford, Henry Ford was opening the highways to all mankind. Two compelling visions. And now what's the strategy for accomplishing that? So that deals with the product, the process of doing it, the people, and the working together strategy. Then going up to the business plan review. Okay, we have the strategy now. We have the plan. Now every week, we're going to go over the vision, the strategy, and the plan. The red deals and greases and the areas of special attention.

then you're right back up to operating with those principles and practices. I love it. It's self-reinforcing and there's natural feedback loops in it. What's the leader's role in that system? The most important thing is to hold the team themselves and the team responsible and accountable for following this process. All five of those elements, we just got to follow the process.

And so holding ourselves accountable for that. And the other is leading by example. I mean, I started out as an engineer working on commercial airplanes. And as you are asked to take more and more service, as you move in that direction, what I found just because of who I am and what I learned at Boeing on large scale projects and systems integration is,

is that you're going to move to a place where you're facilitating and you're coaching because somebody has to keep getting us aligned. Like if we have a new issue on the strategy, well, we need our special attention meeting to deal with that. And so as you get to the place where you're on this leadership team at this level, you have responsibility for a large portion of the organization like engineering and manufacturing procurement, but you're really, really

leading with aligning with the rest of the team and you're facilitating and you're coaching with your team. I always have like maybe 12 or 13 people reporting to me, which a lot of people always wondered how I did that, but I had to have every discipline need to be on that team because if not, then if you have the haves and the have-nots on the leadership team, you got to keep explaining to the people you haven't around the meeting about what's going on as opposed to everybody's being there and

Now, everybody is leading with an example where everybody in the entire organization reports to one of those people. So you're not leaving anybody out. And if you follow this discipline, it really doesn't make any difference how many people you have there because when you do a business plan review, you run it on a very tight schedule because you're going to be there again next week. So you're looking for the changes, offers to help, and you're going to be back together next week. So that's the most important thing about the leadership team is to understand

is the be and the do, who you are and what you do. You don't know anything about that, Shane, is that because this is so visible on the behaviors and the process is so reliable, everybody keeps moving forward with their beliefs and their values, the things you can't see. You can't see those. You see their behaviors. And everybody tells me this, that no matter how they arrived, however they grew up, what their training was, their

the things that went well, the things that were horrible in their life, that once they joined this environment,

and you and you have these expected behaviors and they're the right expected behaviors and you start acting this way then you start being this way so gradually your mindsets and your beliefs and your values they all start to move this direction that's why that authenticity word is so big because if you look up the definition of authenticity three circles again is it's the alignment

of who you are and what you do between your beliefs, your values, and your behaviors. Now, we can see the behaviors, but when we see those behaviors and you're doing that over and over again and you're living that way, well, what happened to those values and beliefs? They move in a really positive direction. And that's what people tell me saying that, like, they're off a program or they've moved on to something else.

And when I see them, they say that wherever they have gone, if they can't see the fundamentals of working together

the process and the behaviors, then they make a judgment call really quickly. And if they don't see a way it's going to happen, they move on. Because once you, it's like you said earlier, once you felt this way and once you are appreciated this way, you're never going to go back. It's like you're never going to tolerate Grendel's mother or Grendel's extended family down there in the swamp. Once you've seen the light, once you've felt the heat, the warmth,

of operating this way, you're never going to go back. Make sense? Yeah, totally. And to your point about the actions becoming who we are, I mean, we are what we repeatedly do. Exactly. There's something that you said earlier I want to come back to, which is you said everyone is a leader just by being who they are. What did you mean by that? Well, it gets back to the be and the do, but especially you, the are, you see that with their behaviors.

Like, let's just take humility, for example. Like, so three questions that we ask. So you can see that. You know when you ask those three questions of yourself about who you're meeting, right away that tells you who that person really is.

and how they operate. That's why we've always started with the behaviors, but having a process that you're following where you have to exhibit those. You can't hide from them. You can't just not participate. So you have a mechanism now where you have to participate, and now your decision is, are you going to do it with these behaviors or not? And if you don't,

you're going to meet some interesting people and you're going to get a chance to decide again. So I think the working in management system

pulls together the be part and the do part. And everybody eventually gets to see both of those either aligned or not. And the Working Together management system isn't just for organizations. I believe you and your wife use a version of this at home. Can you tell me more about this? How does it apply at home? My wife just walked by. But she walked by, so the kids, they all...

They all think this is so fun, but Nikki and I have been married, I mentioned, for 52 years, and we have five darling children. And when they started to come along,

I was at Boeing and I'm program management and lots of people. And I'm watching these seven people now. And so I said to Nikki, you know, this is in very more complicated with our size of our family. We need to do a business plan review every week. And she goes, Alan, this is not Boeing.

This is our family. I waited for a week to reflect on this and that all made sense. And then, so I said the next week, okay, what if we have a family meeting every week? And she said, well, what would we do in a family meeting? I said, well, my suggestions, and I welcome yours, would be after we come back from mass on Sunday morning, that we have an agenda and

for our family meeting, the first agenda I would propose is that all of us, including you and me, we go around the house, we pick up all of our stuff, we take them back to our cubby or back to our room. Because after a week with seven people living lives, it looks like a bomb's gone off in the house. And I didn't sign up for a compelling vision of picking up the house every week. And neither did any of the participants. She said, okay, that makes sense. I said, okay.

She said, what next? I said, well, then everybody, excuse me, we'll go back to our room and we'll pick up the laundry and we'll take it down to the laundry room. And with five children, we usually always had two washers and dryers because you want to get that stuff done or that's all you're doing the whole week. And that's not a compelling vision again for our family. So we do all the laundry together. Then everybody would bring the laundry down.

Dub it out on the kitchen table, and they would all sort the socks and everything else. Because it's not a compelling vision to sit there by yourself and try to sort all these things for everybody. I mean, it's impossible. Plus, it takes a long time. So that's done in like five minutes now. Then they take their laundry back to their room. And then they come down with their calendar. Shane, the calendar. Little loose-legged notebook or wires down the end. They're in kindergarten, Shane. They're in kindergarten. And they got the calendar. And they sit around the round table.

And then we go around the room and every member of the family describes what they're going to do this next week and also identify any things that they need our help with. So do they need a taxi cab service? Do they need cheerleading service? Are they got teacher, parent-teacher conferences? Whatever. And so we all write down things that we can do to help. And I take it back.

uh the things i'd sign up for i would take it back and give it to my assistant but only she'd build into the calendar like we mentioned and so it's just my integrated life i've just integrated my life right um along with the rest of those circles in the integrated life

And then, so that was great. And then the next agenda item was we would just reflect on the behaviors that we've agreed to because we agreed to a compelling vision for the family that had us all growing and contributing and making a difference in service, kind of like what my parents did to me.

And so we go through those, any suggestions for improvement, including the behaviors. That was really interesting at the first because they were pretty aggressive when they were younger about, well, you said that you were going to pick me up after football or pretty soon. We also worked on the how you do, how you say that and how you give that feedback because you want to do it in a positive way. And so they got really good at that.

But we went through that and clarification there. That was a family meeting. And so every time we're together, and they're all grown now, we'll get together once or twice a year. And every time we're together, especially after a drink or two, most of them will bring up things that happened in the family meetings. And I mean, they're so funny. When you look back at the things that were going on. Oh, one of the family meeting principles was if you're going to do something that could embarrass the family,

or make us really proud. Either way, you have to tell us ahead of time. Can you imagine that scene? So they didn't share everything that they would do that would embarrass us, but they sure thought about it because that was a principle in practice. And so when we reflect on these, when they got older, oh my gosh, it was so fun. And it was so funny.

And sometimes I couldn't tell whether they really enjoyed it or whether they thought this was a hassle. And so I would say to them, you guys, if you didn't really enjoy the family meeting, why did you always keep coming to it? You never missed one. Never, never. And one of them says, Dad, do you remember what the last agenda item was on our family meeting? I said, no, I don't. I said, you handed out the allowances. Of course, we had to come to the family meeting. Right.

Now, every one of them, Shane, every one of them is running their version of a family meeting business plan review every week. I love this. I want to follow up with two specific questions. One, what are the other family principles you had?

One was sort of like, if you're going to humiliate anybody we know in advance, what else? What are the other values and principles that you had together as a family that you held people to? Now, this is going to come as a newsflash. The same ones, absolutely the same ones. Like on the chart that you see, the two slides that I sent you that you're going to share with everybody, it has Boeing as a logo for Boeing and Ford. You can also put on there a family reunion photo.

Because it's the very same ones. The kids, I was talking with Peter the other day, and he was in the office, and I was doing a Zoom call, and I looked behind him. He had the Working Together principles and practices that we just went, that everybody's going to get a chance to see. That was on his desk, right in front of him.

our lives, having a vision, a compelling vision for what we're going to do to serve, to make a difference, a purpose, then having a strategy to achieve it. But then also having a plan to reflect on the progress against that so that we can either make modifications to the strategy or not, but know how it's going and be able to make decisions back to your first questions on an integrated life. Am I paying attention to the things that I think are important

in my life, in the life of the people that I'm serving. The other thing I wanted to follow up with was you gave the example of sort of like, you're supposed to pick somebody up at football. You didn't do it, but you said that you sort of coached your kids on how to give that feedback. I'm curious if you can take me behind the scenes. How do I say that in a nice way? What does that look like? How do I teach my kids this? Shane, great job. Okay, here's an example.

One of our girls was on the dance team in high school. I was going to be somewhere and Nikki was going to be somewhere. And so the week ahead of one of their most important performances at school before one of the events, one of the older kids that was driving then agreed to get her from the school to this event. And he forgot about it.

Unbelievable. So we start the family meeting, we go around and our daughter says, well, I'd just like to bring up one thing that I think we all can learn from. Do you remember, brother, that you were going to pick me up and you're going to take me to my event? And you know that that event and what I do is really, really important to me.

And I could just see her brother getting white. And I just want you to know that I know you care about me. I know you love me. You are very reliable. I just want you to know, I think that might be an opportunity to learn. And the apology that he made and his commitment,

and the, what they were sorry and the policy he made and then his commitment to learn from this and be even better. It wasn't just between those two. I mean, all seven of us were listening to this and so it affected everybody. So when they were at first starting out, they'd be a little bit more aggressive because they just didn't know how to do it. But we, but one of the principles and practices is you treat people with respect. You listen to them, you give their human beings. So you don't yell at people, you don't go after them and stuff. And if you just share how you feel,

Share how you feel. No one can argue with that. So she was sharing exactly what was important to her, what the commitment she thought she had and how she felt about that and being violated. And they're exactly that way today. And you think of the people that you work with or are you with that operate that way versus telling you what to do or not saying they're sorry or whatever. It's incredibly impactful, right?

Because we make commitments to each other. And if we're not going to do it, it's going to feel like we're really letting people down. So we're going to develop this one where we're not going to let people down. I like that a lot. I think I'm going to try to implement this after my kids. But part of what I like about it is that you're all learning from each other.

And your role as a parent then goes from do this, don't do this to coaching almost and. And facilitating. And facilitating. Exactly. See, look at this all coming together. Shane, look at that. That's what's on the, that's what's on the, on the working together system.

You're coaching and facilitating. It doesn't mean that you're not leading. Somebody said to me one time, I love coaching CEOs and their teams on, because they all want to know about this working together. And one of them said to me one time, Alan, are you telling me that the board of directors and the shareholders are going to pay me these big bucks as a CEO to facilitate and coach coaching?

And my answer to you was, they're going to pay you twice that if you're a good facilitator and a coach. You're the leader now. You're the leader now. You have all of this talent, all of which knows more than you do about their given subject. This is Peter Drucker's knowledge workers. And so we need the hearts and minds of all the knowledge workers in a safe and a healthy environment. And so the biggest contribution you're going to make and the reason you should be compensated for it

It's if you can create this culture of love by design that has a reliable process and behaviors that create value for the later good. That's your unique contribution with zero tolerance for violating either. I love that. I want to end with a specific question that we ask a lot of guests or I ask a lot of guests, I guess, but what is success for you? How would you define that? How do you want to be remembered? That integrated life of service. I...

And, you know, you've had a lot of great leaders and people on your show, which is, I'd just like to comment, this is fantastic. I've listened to many of them, especially one of the latest ones with Marshall Goldsmith, who's a dear, dear friend.

At the end, and Marshall loves to say this analogy, you get towards the end of your life and you're looking back on what you've done and not done. And Marshall in his latest book tried to share with everybody that you don't want to get to that place and have a bunch of regrets. I mean, you can deal with that now by the decisions you make. It needs to be about something bigger than yourself.

And it's going to be the best that you can do as opposed to it's always going to be phenomenally successful because you'll keep just getting better and better and better. When I look at that integrated life drawing, I look at it every day. It's in front of me. It's not like I'm sitting there studying. I kind of know what that means. But when I look at that, I just touch on all of those different pieces of my life. And am I doing the things right?

that I really believe in that I can really make a difference and serve. And so, and then think about the work one, looking at the work one. I mean, I've been on the

for every Boeing airplane, 707, 27, 37, 47, 57, 67. I was asked to serve as the chief engineer for the 777 airplane and then the 787. And 70% of the seats are flying around the world are on these fabulous Boeing airplanes, safe and efficient transportation. And the same thing at Ford. I mean, I look at those plus the things in the community and stuff. And you go around your diagram like that. I want to keep doing it. I want to keep doing the same thing. I want to keep, I want to keep.

helping out and filling in all the aspects of all those circles of an integrated life. What an incredible impact you've had. Millions, if not billions of people have been impacted by you. And I really appreciate you taking the time today to have this amazing, phenomenal conversation. And thank you so much, Alan. Shane, I'd just like to say one, thank you.

and thank you for the opportunity and i've joined your organization i love i love your work and i'm very i'm very proud to be able to support you and you're really about something really important because there's so many people in our world in a very complex rapidly changing world there's so many people that are really working to serve and so the fact that you're capturing that for people

I think is absolutely fantastic. So I'd just like to thank you for your service too. That's very generous of you. Thank you. Thanks for listening and learning with us. For a complete list of episodes, show notes, transcripts, and more, go to fs.blog slash podcast, or just Google The Knowledge Project. Until next time.