Connect with us

Business

Jim Hackett is leaving Ford. Will his design-driven strategy remain?

Published

on

Of the many CEOs to endorse the idea of putting design at the center of corporate decision-making, no Fortune 500 boss has done so as explicitly and as enthusiastically as Ford’s Jim Hackett.

From his first day on the job in 2017, Hackett, a former office furniture CEO with no previous auto industry experience, defined his mission as reshaping Ford’s culture, not just selling more cars. He vowed to strip away layers of bureaucracy, infuse the 117-year-old manufacturer with the entrepreneurial ethos of Silicon Valley, and foster a “human-centric” approach to product development.

The goal, Hackett argued, was to look beyond quarterly returns and tackle Ford’s long-term challenges. To thrive in an age of artificial intelligence, hyper-connectivity, and driverless electric vehicles, he said, Ford must compete with the likes of Google, Amazon, and Tesla, not just Toyota and General Motors. To those ends, Hackett enlisted the aid design gurus at IDEO, the San Francisco-based consultancy that helped to popularize the idea of “design thinking,” and built an entirely new design studio, D-Ford, inside the carmaker.

It was an exhilarating vision. But Wall Street never bought it. On Aug. 4, Hackett announced that he will step down in October.

Analysts’ assessments of Hackett’s tenure have not been kind. Many noted that over the past three years, Ford has piled on debt without improving sales. Critics faulted the company for poor execution and taking too long to make decisions. As the Wall Street Journal notes, Ford stumbled last year in rolling out a crucial redesign of the Explorer SUV, while quality problems on some of its models have led to huge increases in warranty costs. Operating profits slumped for all three years.

The company’s stock price, which had fallen to about $11 when Hackett took over from Mark Fields, slid to $7 dollars as of last week—although it rallied a bit on news of his exit.

My Fortune colleague Shawn Tully’s verdict: “As it turned out, what doomed Hackett was his failure to address what a bloated automaker needs most: a basic restructuring to squeeze far more dollars in profit from a shrunken, highly-efficient base of plants and design centers.”

Hackett’s successor, chief operating officer Jim Farley, is a veteran Toyota executive who joined Ford in 2007. He has been widely described as a traditional “car guy,” and hailed by many as just what Ford needs to get back on track.

“We believe Farley brings a greater sense of urgency and action,” Credit Suisse analyst Dan Levy said in an investor note last week.

That may be. But the criticism is overdone. Hackett was an unorthodox choice for CEO in the first place. As Matthew DeBord notes in Business Insider, that’s precisely the reason chairman Bill Ford offered him the job. Ford was a mess when Hackett inherited it. He moved quickly to axe Ford’s unprofitable sedan lineup and shift production to SUVs and electric vehicles. And Hackett’s focus on changing Ford’s approach to design and product development is about to pay off.

In 2021, Ford will launch several new models that look like they could be game-changers for the company: a feature-packed redesign of its best-selling F-150 truck that has debuted to rave reviews; an all-new line up of Bronco SUVs that will vie with Jeep Wrangler for America’s most popular off-road car; and the Mustang Mach-E, an electric version of its iconic muscle car.

Car and Driver gets it. “Ford is no longer asking its customers what they want to drive,” the magazine observed in a recent assessment of Ford’s 2021 offerings. “It’s asking them who they are, and then providing a range of choices based on the answer.”

For designers and CEOs alike, the key takeaway here is that cost-consciousness and design thinking must go hand in hand. It is not that Hackett’s focus on design was misguided.

Clay Chandler
– clay.chandler@fortune.com

Continue Reading
Comments

Business

One pandemic, two recoveries: New Yorkers are three times more likely to be jobless than Nebraskans

Published

on

Our mission to help you navigate the new normal is fueled by subscribers. To enjoy unlimited access to our journalism, subscribe today.

It’s going to take a long time to get out of this economic mess, but we’re making progress: Since the end of April, the economy has added more than 10 million jobs and the unemployment rate has fallen from its peak of 14.7% to 8.4%.

But that national recovery is unequal. Employment in some states is back to pre-pandemic levels, while others are at mass joblessness levels surpassing the 2007-09 Great Recession.

When the pandemic hit, the jobless rate in Nebraska soared from 4% in March to 8.7% in April. But the state’s nearly fully reopened economy has helped push the jobless rate back to 4% as of August.

The picture in New York, the epicenter of the pandemic in the spring, is far less rosy. It saw its jobless rate climb from 4.1% in March to a staggering 15.3% by April. It has since improved to 12.5% in August—a figure that is still above the U.S. peak of 8.9% jobless rate during the Great Recession era.

How can a New Yorker be three times more likely to be jobless than a Nebraskan?

States like Nebraska that are more rural and haven’t been as hard hit by the pandemic have almost fully reopened. Earlier this month Nebraska allowed outdoor gatherings to reopen at 100%, including sports stadiums and fairgrounds. And places like bars and tattoo parlors were reopened weeks ago.

Northeast states like New Jersey, New York, and Connecticut were hit hard by the virus in the spring and are reopening businesses at much slower rates. Case in point: Indoor dinning in New York City doesn’t start back until September 30, and that’s only at 25% capacity. That cautious approach explains why New York’s jobless rate remains so high.

While New York leads the nation at 33,092 lives lost to the pandemic, its case load and deaths are plummeting, according to Johns Hopkins University data. Only .9% of COVID-19 tests in New York are coming back positive compared to over 50% at one point in April. Nebraska has far fewer COVID-19 deaths (452), however, its positive rate is 12.6%—which is above the 10% threshold that adds incoming travelers to New York’s 14-day quarantine.

And joblessness in New York is also elevated by its large leisure and hospitality concentration. That sector was smashed by the pandemic, and has yet to rebound. Leisure and hospitality jobs in New York City alone are still down 48%. And that’s also why joblessness is still so high in tourism heavy California (11.4%), Hawaii (12.5%), and Nevada (13.2%).

While Florida also has a massive tourism industry, its jobless rate is only 7.4% in August which can be chalked up to a more aggressive reopening plan than states like Nevada or New York.

More must-read finance coverage from Fortune:

Continue Reading

Business

6 Tips to Land Your Remote Dream Job

Published

on

Quality and quantity is the key to success.

Continue Reading

Business

How to Find the Best Manufacturer for Your Consumer Electronic Device

Published

on

The secret to choosing a reliable factory that won’t steal your intellectual property.

Continue Reading

Trending

Copyright © 2020 Black Biz Daily News