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Three Things Jim Hackett Can Do To Save Ford (Again)

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Ford employees have seen this movie before.

For the second time in just over a decade, Ford Motor Company has enlisted an outsider to be its CEO. In September 2006, the board hired Alan Mulally as President and CEO. Now the board has hired Jim Hackett. While not technically an outsider because he serves as a director of mobility, Hackett was the long-time CEO of Steelcase and after that served as athletic director at the University of Michigan, for which he played football as an undergraduate.

Like Mulally, Hackett has no lengthy automotive experience. Like Mulally he knows manufacturing. And even better he knows people. Mulally reinvigorated Ford with some simple business practices that leveraged the talent of the in-house team. It worked spectacularly well with Mulally. The company was near bankruptcy when he came in and when he left eight years later the company was solidly in the black. Based upon his successful tenure at Steelcase, Hackett likely will do the same.

There is one problem, however. When a company hires from the outside it is an acknowledgement that things are not working well.  What the board is really saying to senior management: “We don’t trust you guys to run the company.” No matter how you spin it, bringing in a new CEO is a slap in the face to the people already there.

In most cases it’s deserved but hiring an outside CEO is not too far from waving a magic wand. Ultimately the enterprise will succeed or not with the people it has now or it will not. That does not come from pixie dust. It comes from developing sound strategies that leverage people and culture.

Ford is not in dire straits; it has posted record sales in the past two years. The problem is the stock price down 40% under the helm of former CEO Mark Fields. Even though Ford did not take federal funds as did General Motors and Chrysler during the financial meltdown of 2008-09, it bears the taint of its neighbors. Tesla, a startup automaker, has a market value greater than that of Ford’s. Investors see a bright future with electrics not so bright with octane imbibers.

What the board of directors wants is a CEO to give the company a strategy for tomorrow as well as to goose the stock price. One way already in motion is a move to chop 10% of the salaried work force in North America and Asia. That is a tried and true method but hardly forward thinking or strategic.

In my opinion Hackett must do three things if he is to succeed.

Leverage mobility. The future of the automotive industry is changing. The need for individualized transportation remains. How will Ford meet the challenge of autonomy, i.e., self-driving vehicles? It is here and those who don’t get on board now may have missed the robot. Since Hackett is on the mobility team, he's got a running start in this area.

Engage the workforce. When Mulally arrived from Boeing, it was suspected that he would torch the place, management wise. He didn’t. Part of Alan’s genius was finding talent that others had overlooked and putting those folks into places where they could succeed. Hackett can do the same. He can look for folks who have been pushed aside because they got sideways with a boss. Also he may keep an eye out for positively-minded dissenters – those who think and act differently. Capture their spirits and they can push Ford forward.

Hire a successor. Hackett is not a long-term solution; he is close to traditional retirement age. He has served as interim athletic director at Michigan with one directive: get the football team back on track. That meant finding a new coach. Hackett hired Jim Harbaugh, a former UM quarterback and seasoned collegiate and NFL head coach. With Harbaugh, Hackett had destiny on his side. Jim was coming home to Ann Arbor where he had spent part of his youth and where he had played college football. You can’t count on lighting striking twice. The search is on.

And let me add one personal note to Mr. Hackett.

Jim, I have worked on and off as a consultant and coach – though not currently -- to Ford for many years. Toward that end I would urge you to lead as you did in your previous jobs: listen, empower and insist on accountability. On a simpler level, push for some cultural changes. As the old saying goes, culture eats strategy for lunch.

One, ask your managers to hold fewer meetings. Like many big companies Ford holds meetings to have meetings. Enough. Let people do their work.

Two, insist that your senior executives have a life outside the company. Mandate that senior executives leave two nights a week at 5 p.m. Working for the sake of working is folly. Give them a life and the ideas will flow. They don’t need to work harder; they need to work more completely… as parents, friends and members of their communities.

Ford employees are focused, dedicated and driven. But they need direction. Give it to them and they will soar.

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