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  • 06.23.17

How Ford’s New CEO Plans To Beat Tesla, Uber, And Google

Jim Hackett was raised on Ideo’s brand of design thinking. Can he use it to save the 114-year-old automotive giant?

How Ford’s New CEO Plans To Beat Tesla, Uber, And Google
[Source Photos: Jeff Kowalsky/Bloomberg/Getty Images, UmbertoPantalone/iStock]

In April 2017, the Ford Motor Company–114 years old, the second largest carmaker in the country behind General Motors, a stalwart of American manufacturing–was suddenly worth less than 14-year-old Tesla. As the New York Times wrote at the time, investors were betting on the future; Ford, in that sense, was history.

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The company’s stock has fallen nearly 40% since 2014. With investors grumbling, Ford’s board ousted CEO Mark Fields and appointed Jim Hackett. Hackett, who has turned around flailing companies, including the furniture manufacturer Steelcase, is an executive raised on the gospel of Ideo’s design thinking, where Post-it brainstorming, user testing, and quick prototyping are the keys to success. He wants Ford to shape the future of transportation at a time when younger, more agile companies are jockeying to do the same–and he thinks design will be the crucial differentiator.

Ford’s new CEO Jim Hackett talks to Ideo founder David Kelley and Ideo CEO Tim Brown. In his previous job as the CEO of furniture maker Steelcase, Hackett worked closely with Kelley, who introduced him to design thinking as a mode of running a business. [Photo: courtesy Ford]

The Competition

We’re living in a time of unprecedented change in transportation. Personal automobiles dominated for decades. But now people are buying fewer cars and some are skipping the expense all together. Ride sharing has become a billion dollar industry, driven by aggressive companies like Uber and Lyft. Self-driving cars are looming on the horizon as traditional carmakers and tech companies rush to be the first on the road–without killing anyone. Ford is operating within this fiercely competitive landscape; and while it might not be the first to sell an autonomous vehicle, it can’t afford to be left in the dust.

Hackett clearly understands this urgency; before being appointed CEO, he was the chairman of Ford Smart Mobility, a subsidiary focused on self-driving cars. He also understands Ford’s existing value proposition–and how design can make it more salient. People trust Ford’s ability to keep them safe in their vehicles, he says–and they’ll continue to have faith in the company’s ability to integrate technology in the smartest way. “I think the understanding of humans in our product is an advantage,” Hackett says. “People are expecting us to interpret technology for their advantage. It’s like a translator. Isn’t design about great translation?”

Hackett’s Vision

Ford is developing self-driving cars. Hackett declines to provide specific details about the program but says the company plans to approach self-driving cars as vehicles within a larger ecosystem of autonomous cars–not just as standalone design objects. He believes that some kind of network will one day dominate all transportation. He compares it to the electrical grid or the telephone system–infrastructural, secure, and utterly reliable. Right now, the road-based transportation system doesn’t live up to that standard, he says, noting how during our conversation he is sitting in traffic trying to get to Grand Rapids, Michigan, for a meeting without any certainty of how long it would take to get there.

“This is part of the puzzle, which is trying to step back and say, how much of the nature of vehicles and transportation is mired in a past that was able to stay persistent for more than a few decades,” he says. “A past where what guided your vehicle was a driver, a past where what gave you a sense of rules and controls were traffic lights and stop signs and lines painted on streets. Those have lasted for a long, long time. That’s all going to change.”

Ford is operating within a fiercely competitive landscape in the rush to build autonomous vehicles. [Photo: courtesy Ford]
He imagines a self-regulating city where cars may only be allowed in at certain times of the day, where the numbers of vehicles are limited because of congestion or carbon standards, where half-full delivery trucks will be turned away because the city can’t afford to give up the capacity on the road to a vehicle that isn’t entirely used. “The design of how that city wants to behave cannot be done in the analog system of painted lines on streets and stop signs,” Hackett says. “It’s not smart enough to regulate the equilibrium of what the city needs. Ford Motor Company has got a bright future in this because we build vehicles that will work in that system.”

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But that system remains the realm of futurists and prognosticators. So how do you create a part that fits into a system that doesn’t exist? For that, Hackett is turning to design.

When Hackett was the chairman of Ford Smart Mobility, the company invested in a bike-sharing startup as a way of expanding the way it approached transportation. [Photo: courtesy Ford]

The Design Influence

While leading Ford Smart Mobility, Hackett paired Ideo designers with Ford employees starting in June 2016 to work on projects aimed at tackling some of these problems. While the work itself is under wraps, Hackett’s name for the program–Greenfield Labs–encapsulates the tricky position Ford finds itself in as a legacy company hurtling head first into an uncertain future. Hackett explains that Greenfield is an idyllic village that was created by Henry Ford to “restore simple life” in the midst of modernization. It’s also the home of a museum memorializing Ford and Edison and their contributions to the world. “Isn’t it fun to say it’s a museum about two guys who worked on the future?” Hackett says. “Let the irony of that settle. I wanted to take advantage of that.”

Hackett’s predecessor Mark Fields was also a proponent of design, emphasizing how user experience had to come first when designing Ford’s vehicles. But Hackett wants to broaden design’s reach across the company. He has started company-wide workshops teaching critical thinking as one of the first phases of design thinking. He traces that back to his leadership at Steelcase. The company became a majority stakeholder in Ideo in 1996 (later the design firm bought back its shares), and Hackett and Ideo CEO David Kelley reportedly had a live video feed 24/7 so the two could collaborate from their different offices. “I really went to school,” he says of working with Ideo. “The way I ran the business was from that vantage point.”

Ford has also invested in the ride-sharing company Chariot. Hackett says the startup is teaching the 114-year-old company about the pulse of transportation in cities. [Photo: courtesy Ford]
After joining Steelcase in 1980 and working his way up the ladder, Hackett had to figure out how to design furniture for offices in the new age of personal computing–something he compares to the changing structure of mobility and the advent of autonomous vehicles. For instance, conference rooms didn’t have plugs back then–just one for the vacuum. “How you design for that is one of the things that Steelcase did,” he says. “I can see that [lag] in the transportation system. Someone’s going to figure that out. That’s why we’re pushing ourselves to figure out faster how we design vehicles for a system that’s going to be coming.”

That’s something a host of other companies, including some of the biggest tech giants and other automakers, are also trying to track. But Hackett says he isn’t so worried about Silicon Valley tech companies infringing on Ford’s territory. “I know that we’re using design thinking as a way to approach [the problems of transportation],” Hackett says. “I’ll let others judge whether [our tech competitors] have the skills for that or not. Are you happy with the user interfaces of all your technology?”

Hackett’s main job now is to convince investors that Ford is moving fast enough to keep up in the race to design autonomous vehicles and the system required to make them a reality. According to a recent report from Navigant Research, Ford is leading the field, mostly due to the company’s ability to bring the car to market, from production to distribution. If Hackett succeeds, perhaps one day Greenfield will have another museum, a historical look at the people who managed to bring about what today is only imaginary.

About the author

Katharine Schwab is a contributing writer at Co.Design based in New York who covers technology, design, and culture. Follow her on Twitter @kschwabable.

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