What to learn from the firing of Ford CEO Mark Fields
When Mark Fields became CEO of the Ford Motor Company in 2014, he had some very big shoes to fill. His predecessor, Alan Mulally, had previously led a spectacular turnaround at the automaker, taking the company from record losses in 2006 to record profits in 2014.
By 2017, however, the outlook for Ford had changed. While the company still had a strong product portfolio and increasing profits, its share price had declined by 40% in only three years.
Bill Ford, executive chairman of the company, promptly removed Fields from his CEO post and replaced him with Jim Hackett, the former CEO of Steelcase. In a press conference, Ford described his reasoning for the leadership change—and, in doing so, revealed these three insights about agility.
Insight 1: Deliver an “and proposition”
An agile leader can navigate the path between what is and what isn’t. As Ford described, “This is a time of unprecedented change, and a time of great change needs a transformational leader. Jim [Fields’ replacement] can integrate future thinking into an operation and help seamlessly deliver a future that has been envisioned.”
My translation: Ford, the board and the stock markets didn’t sense that Mark Fields could deliver that “and proposition,” which was:
- Maximizing what is: Improving operations and financial performance.
- Inventing what isn’t: Reimagining the industry in times of tumultuous change and envisioning your future in that environment.
- Seamlessly leading transformation across multiple dimensions: Continuing a trajectory of profitable growth while gaining the confidence of analysts and investors. In other words, giving key stakeholders the confidence that Ford will be a victor not a victim; a disruptor, not a disruptee; and a leader, not a laggard.
Doing this seamlessly is hard, as Fields’ experience can attest. But it’s critically important. The board seemed to sense that Fields couldn’t develop this capability quickly enough, so they let him go.
Insight 2: Migrate multiple business models
Getting Ford back on the right trajectory required a number of changes, as the executive chairman described.
In the press conference, he noted three in particular: “Firstly we have to have to reenergize our business, including sharpening some of our executional excellence. We need to modernize our business. If you think about the trends coming at us, things like artificial intelligence, 3D printing, robotics, deep learning, we need to have a point of view on all of these things and a plan to either integrate them into our business to help us drive our business or a thoughtful reason as to why we don’t think that’s the right reason [thing to do] at the time. The third thing we have to do continue to develop and also invent the new businesses.”
My translation: Agile leaders know how to seamlessly migrate three business models—1.0, 2.0 and 3.0—to transform an organization. In my view, these models are best described this way:
- Model 1.0: Our current business model, which focuses on continuously improving how we execute and optimize the financial performance of our core business.
- Model 2.0: A new business model, which embeds next-generation platforms (e.g., artificial intelligence, 3D printing, robotics) to get the company to the next level.
- Model 3.0: A revolutionary business model, which embraces the new industry landscape and optimizes our presence in it, leading to innovation breakthroughs.
Only a small fraction of leaders can execute all of these models at once. Alan Mulally could; Mark Fields couldn’t.
Insight 3: Make decisions with agility
To successfully transform and migrate business models, a leader needs be an agile decision-maker. As Ford described it, “If we’re going to win in this new world, we need to break down the hierarchy, and we have to empower the team. We have to move fast, and we have to trust our people to move fast.”
My translation: Think of a business as a transaction of decisions. Enterprises are only limited by their ability to make decisions with agility.
Yet our research at the Strategic Agility Institute confirms that many enterprises struggle with this. Results from The VUCA Report, which has surveyed nearly 1,000 business leaders globally, indicate that decision-making scores lowest on the list of 15 agile capabilities and capacities.
As a reminder, VUCA—an acronym for Volatility, Uncertainty, Complexity, Ambiguity—describes the nature of today’s business environment. In this context, agile decision-making is required. Leaders that don’t subscribe to this become the “fragile majority” rather than the “agile minority.” Another way to think about this:
VUCA – AGILITY = FRAGILITY
To return to the case of Mark Fields: The board, markets and Bill Ford didn’t sense that Fields was developing the agility to thrive in a VUCA world. They were sensing an agility disadvantage and underlying fragility. I suspect that they were sensing an even worse scenario—that agility was slowing while VUCA was accelerating.
Indeed, VUCA is accelerating in all industries, including yours. Our VUCA Index from The VUCA Report has increased from 69.57 (2016) to 72.92 (2017), reflecting an estimation from 0 (much less) to 100 (much more) of the expected level of future VUCA.
So even if your company’s profits and cash flow are in a good place, consider this: What if you had a share price, board and boss like Fields? How would the market assess your performance against these three insights? Would your job security be at risk?