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.
Clay Chandler
– clay.chandler@fortune.com
NEWS BY DESIGN
The U.K. government made sweeping changes to planning permissions, granting automatic approval to new homes. The government says the revamp will address the housing shortage, but a number of architects and housing charities have warned the deregulation could lead to low quality housing. The president of the Royal Institute of British Architects said "these shameful proposals do almost nothing to guarantee the delivery of affordable, well-designed and sustainable homes."
As TikTok struggles to survive in the U.S., Facebook-owned Instagram officially launched its knock-off service, Reels. The in-app function lets users record and share short videos set to music and is the second attempt by Facebook to imitate TikTok’s success. A previous flop, called Lasso, was shuttered last month. The copycat behavior begs the question whether Facebook has lost its innovative edge.
A team of Australian scientists might have discovered how to make cotton grow in a variety of colors, creating a material that can be woven into colorful clothing without the use of toxic dyes.
Snapchat will release new features next month to prepare U.S. users for the national election in November. The majority of young, first-time voters get information on how to vote from college campuses—but with the pandemic hampering in-person attendance, social media will be more pivotal. Snapchat has helped users vote before. In 2018, the social media app sent all U.S. users over the age of 18 a voter registration link ahead of the midterm elections.
MIT scientists took a look at why razor blades dull so quickly when the steel of the razor is so much stronger than the hair it’s cutting. Their findings could point the way to longer lasting razors but doesn’t answer whether—or how—razor companies can turn away from built-in obsolescence.
Summer is drawing to an end but the pandemic rages on. For schools, that means implementing new scheduling and uniform systems to keep infection rates down. Here’s a look at how countries in Europe are managing. And, from Fortune’s latest print issue, here’s a fresh look at how the pandemic will change offices
Also, from our magazine, try this Q&A with David and Sybil Yurman, founders of one of the first designer names in fine jewelry.
MOST POWERFUL WOMEN
A little break from the news to make a request.
Fortune's Most Powerful Women issue will be published in November and we’re collecting nominations to include on the annual Most Powerful Women lists. The lists—one focused on U.S.-based executives and one focused on execs based outside the U.S.—have long relied on four criteria: the size and importance of the woman’s business in the global economy, the health and direction of the business, the arc of the woman’s career, and her social and cultural influence.
This year, there's a new criterion: how the executive wields her power to shape her company and the wider world for the better. (Examples might include, introducing—and maintaining—hazard pay for frontline employees during the pandemic, instituting gender/racial pay parity, creating a program or business unit that serves a disadvantaged population, measurably reducing the company’s carbon footprint, or creating new hiring pipelines that have resulted in a more diverse workforce.) We’re accepting submissions through this online form until August 24. So if you have any nominations, please send them in.
EVENTS BY DESIGN
August
Web design conference Beyond Tellerrand has rescheduled its August event in Berlin to September next year. However, organizers hope their event in Düsseldorf will continue as re-scheduled in November
Copenhagen’s NordDesign festival, with its focus on industrial and product design, will be online this year, August 12-24
The 6th International Conference on Design Creativity will continue as scheduled August 26-28, but will be online rather than in Finland, as initially planned.
Hong Kong’s Knowledge of Design Week will also run online this year, from August 26 to September 3.
September
London Design Festival has decided to go ahead September 12-20, with a stripped-down offline program that will target Londoners much more than international visitors. Other events will be online. The organizers are still figuring out how exactly to proceed.
Design Matters in Copenhagen appears to be carrying on, too, September 23-24, although it is now selling tickets to view a livestream of the event.
November
Dubai’s inaugural architecture festival, d3 Architecture Festival, will run November 11-13 on the sidelines of Dubai Design Week. The event will focus on sustainability—an existential issue for the desert city.
QUOTED BY DESIGN
“With no real end in sight, brick-and-mortar businesses are forced to not only make hasty design choices that will allow them to reopen, but also consider an unknown future. They’ll need to move away from the former trend of creating a flashy, Instagramable experience to focus on core values that directly consider and benefit customers, employees, and the environment’s well-being.”
Lauren Chipman, CEO of Chipman Design Architecture, speaks to Fortune about how brick and mortar businesses can redesign themselves for the new era.
This week’s edition of BxD was curated by Eamon Barrett. Email him tips and ideas at eamon.barrett@fortune.com
