Ford has replaced CEO Mark Fields just three years into his tenure, marking a clear demonstration of the consequences leaders face if they aren’t seen to be adequately combating digital disruption.
The auto giant announced it will replace Fields with Jim Hackett, a veteran of the office furniture industry who currently heads up Ford’s autonomous driving division.
CEOs almost everywhere are under immense pressure to overhaul legacy business models, under fire from tech titans, such as Google, and sector specialists, such as Tesla. In Ford’s case, the company’s shares have fallen by around 40% since Fields got behind the wheel in July, 2014.
“Hackett is well known for his creative management approach to business and is widely recognized as a leader in innovative design.”
Tesla shares, meanwhile, have continued to strengthen as the company, founded by CEO Elon Musk, prepares to launch its first mass-market electric sedan.
Ford disappointed investors in January by forecasting lower profits in 2017 after national auto sales came off the boil and Fields flagged higher costs for its investments in emerging technologies. Ford’s profit margins have become narrower than rival GM’s amid criticism from some analysts that it hasn’t kept a lid on costs at its traditional trucks and sports utility businesses.
“You have to have one foot in today, but also one foot in the future,” Fields told the company’s annual shareholder meeting last month. “I think investors understand our strategy.”
Some, however, are concerned the company has fallen behind rivals such as GM in embracing the future, even as Fields oversaw deals including a $1 billion investment announced February in self-driving technology company Argo AI.
Hackett was appointed as head of Ford’s Smart Mobility unit in March last year. Before joining Ford, he spent 30 years at office furniture group Steelcase, where he was credited for predicting the office landscape would shift toward an open-space environment from cubicles.
Hackett is “well known for his creative management approach to business” and is “widely recognized as a leader in innovative design,” according to his bio page on Ford’s website.
His promotion at Ford would comes as more non-tech companies, such as Starbucks and Mattel, look to the tech sector for CEO succession candidates to deal with disruption.