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.