Jim Hackett’s exit as Ford’s CEO should surprise no one. Billions of dollars in losses, a 40% drop in stock price, and complete lack of clarity around the way forward inevitably had to lead to new CEO. The main lesson from Hackett’s case is that while everyone has to converge into an organization before trying to evolve it, you have to time that pivot differently in different circumstances. Hackett moved way too slowly, failed to clarify a coherent strategy or culture and paralyzed the organization.
I’ve written about Jim Hackett twice before. Once I was right. Once I was wrong.
In writing about his views on How Office Layout Impacts Corporate Culture, I was impressed with Hackett’s understanding of the general shift from command and control hierarchies to more collaborative work and how office spaces could enable that.
In writing about Hackett’s New Leader’s 100-Day Action Plan when he joined Ford in 2017, I said “The bet is that Hackett will succeed. He’s got the strengths. He’s got the temperament. He’s got a strong 100-Day Action Plan. Expect him and Ford to be successful over time.” But he failed to be decisive. Ford is fundamentally a design and engineering led manufacturing company. It was in trouble. It needed clear direction from the top – which he failed to give them.
Phoebe Wall Howard’s February 13, 2019 article on Hackett in the Detroit Free Press laid out then all the reasons Hackett is on the way out now. Perhaps there was still time then to fix the issue. In any case, Hackett either didn’t adjust or didn’t adjust fast enough. She suggested:
- Hackett failed to clarify a coherent strategy. Ford’s then summary of Hackett’s vision was too broad and all-encompassing to guide choices. He wanted to “focus on big societal needs,” compete for a share of the transportation pool, “create for people what they may not know they need, but will not want to live without,” design intelligent, connected vehicles, while “exiting or restructuring weak product lines and markets,” and reducing capital expenses all at the same time.
- Hackett failed either to adapt to the organization’s culture or shift it decisively. His people described him as “not from this world.” It’s true. He grew up at Procter & Gamble and then Steelcase Office Furniture. He was not from the rough and tumble command and control world of heavy-duty manufacturing.
- Hackett paralyzed the organization by promising a restructure and then meting it out like a water-drip torture creating “’paralyzing’ tensions waiting for job cuts and strategic decisions.
Implications for you
1) Deliberately and decisively think through, time, and implement your pivot. Sometimes you’ll want to converge and evolve slowly, sometimes fast. And sometimes (like in a turn-around,) you’ll need to shock the organization. Figure it out. Work it. Get on with it.
2) Make a clear over-arching strategy choice and align your culture, organization and operations around that choice. Once you figure out if you are fundamentally a design, production, distribution or service organization, everything else flows from that as you work through strategic point of inflection.
3) Enable the organization with clarity around which decisions are yours, shared or delegated.
- If the decision is yours to make, get input, think it through, make the decision and move on. Don’t pretend it’s a shared decision. Don’t over-involve people. Don’t re-think it unless there’s new information. According to Ron Chernow, George Washington got to be particularly good at this by the time he became President, getting input, deciding, and moving on with confidence.
- If the decision is shared, share it. Let people debate and discuss. If you’ve got ideas, put them on the table as your Best Current Thinking, so people know they can build on them without offending you in any way. Drive to consensus if at all possible – so long as the shared decisions nest within the decisions that you’ve already made.
- If the decision is delegated, delegate it with confidence. Your job is to support those delegated decisions – just so long as they nest within the shared guidelines.
One leader has 90/6/4 framework. He says 90% of decisions are delegated. His job is to support those. 6% are shared. 4% are his to make – and he expects everyone to support his decisions as he supports the 90% of decisions they make.
Click here for a list of my Forbes articles (of which this is #653) and a summary of my book on executive onboarding: The New Leader’s 100-Day Action Plan.
