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Green Light Go! Why Culture Tops Strategy

Alan Mulally, the former Ford Motor Co. CEO who led what can only be described as an incredible turnaround at the great American automobile manufacturer, knew that culture beats strategy. In other words, you can have great plans or processes in places, but if the culture in your organization doesn’t support performance improvement, you’ve got no chance of success.

During his meetings with senior leadership, Mulally would go around the room and ask everyone if they were on track to meet their monthly goals. They were to respond, not with some long and detailed story of what was happening on their watch, but by naming a color.

Green meant: We’re on track, and I know what to do to keep us there.

Yellow meant: We’re not on track, but I know what we need to do to get us back on track.

Red meant: My division is not going to meet its objectives, and I have no idea what to do.

As you can imagine, this approach created a pressure-filled situation. These were powerful, confident people, who had risen to the top of a huge organization. They knew how to handle adversity and brought more than a bit of ego to the table. Mulally said he knew Ford was going to be okay the moment the first division vice president had the courage to stand up and announce: “Red.”

That was a breakthrough cultural moment at Ford. This person put his ego aside and felt comfortable enough in the environment Mulally had created to admit he needed help. And that’s what the rest of the organization did: Help.

Your Turn

Here are two big takeaways from Ford’s success:

1. Consider using the color-coded response approach for your management meetings. It’s easy and succinct.

2. Ask yourself what kind of culture you’ve cultivated at your workplace.

Culture is often best observed in the language people use in meetings and conversations. Does the language between you and your people skew negative or positive? Solution-oriented or blame-assigning? One of admiration for others or nitpicking of faults?

You may be surprised at what you find. If you’re on the right track, keep the fires burning. If not, take action and start heading in the right direction.

As the best business thinkers know, culture beats strategy every time.

Photo by Carlos Alberto Gómez Iñiguez on Unsplash.