Big iconic corporations often struggle in times of terrible business stress with the need to quickly find a great new CEO. Choosing the right approach and being prepared to implement it is one of the most important responsibilities that the board of a public company can have. How Ford landed Alan Mulally is a case in point.

The scenarios that catalyze the need to find a new CEO are always different, but the urgency is nearly always the same. The new leader usually has to pick up quickly from where the last one left off and take the business forward without loss of momentum. That was the case when AT&T’s new CEO, James E. Olson, suddenly died of cancer in 1988 amidst the company’s emergence as a scrappy competitor following its massive breakup. AT&T had to rebuild as a new entity and fight the likes of pugnacious MCI — and Robert E. Allen, then the president and chief operating officer, kept the mission going as Olson’s successor.

Sometimes the stakes are epic, and the new CEO may have to take the business through a crushing crisis and turnaround, lest it vaporize à la Enron. Tyco and WorldCom instantly come to mind as those that avoided the euthanizing gas after finding outstanding CEOs in Edward D. Breen and Michael D. Capellas, respectively. Breen especially has driven a transformation that MBA students will learn from for years to come.

Could Ford Motor Company find such a leader? That was the challenge posed to its board several years ago, and today most would say that it rose to the occasion in finding Alan Mulally. Ford was in decline and facing irrelevance just as the global economy was about to collapse and take major companies with it. How out of all the great CEOs out there was Mulally picked? How did Ford’s board know — indeed, a direct descendant of Henry Ford among them! — that this person would be the right choice?