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Ford's Slow-Motion CEO Succession Plan

Mulally promotes an heir apparent but is staying put through 2014
Ford Motor executives, from left, Bill Ford, executive chairman; Alan Mulally, chief executive officer; Mark Fields, president for the Americas; and Martin Mulloy, vice president for labor affairs
Ford Motor executives, from left, Bill Ford, executive chairman; Alan Mulally, chief executive officer; Mark Fields, president for the Americas; and Martin Mulloy, vice president for labor affairsPhotograph by Jeff Kowalsky/Bloomberg

In 2006, Alan Mulally, nearly three months into his job as chief executive officer of Ford Motor, was growing increasingly frustrated with the crew of managers he’d inherited. To foster candor, the ex-Boeing executive instituted a weekly reality check: a Thursday morning meeting where top managers reported on their initiatives using a green, yellow, or red code to indicate progress, caution, or a problem. Ford’s auto business was on its way to losing $17 billion that year, yet all Mulally saw every Thursday was a sea of green.

Finally, someone broke ranks: Mark Fields, the head of Ford’s vast North American business, revealed he had to halt production of the new Edge sport-utility vehicle because of a balky tailgate latch. “When I showed that first red, there was a lot of tension in the room,” Fields recalls. “Then Alan clapped.” The applauding CEO offered praise: “Great visibility, Mark,” Mulally remembers saying. “Is there anything we can do to help you?”