Bob's Gutsy Leadership Blog

Ford: Focusing on What’s Cool and Ignoring the Core Business!

The big news at Ford recently was the firing of the CEO who had been in place for three years.  The stimulus for this is the fact that Ford’s business is suffering.  Specifically, the first quarter of 2017 saw Ford’s pre-tax profits decrease by -35% versus year ago.  Ford’s stock has under-performed GM’s by almost 25 percentage points over the past year.  In the three year tenure of the departing CEO, Ford’s stock is down -37%.

So what is the problem here?  First of all, during the 2013-2015 period the whole company focused almost exclusively on the conversion of Ford’s crown jewel, the F-series pickup.  They made a big gamble on trading in steel for aluminum in order to lighten up these trucks and make them more fuel efficient.  Most importantly, very little was happening with respect to refreshing other Ford models during this period.

Second, since 2015, that lack of attention to Ford’s other models continued. Why?  The CEO of Ford has focused almost exclusively on preparing for the world of electric cars, driverless systems, and mobility apps.  During this period he spent a fair amount of time interacting with Silicon Valley and appearing at conferences focused on futuristic scenarios.  In fact, he focused almost exclusively on the trendy new auto-related technologies.

Net, Ford has worked itself into basically a product drought.   Given the auto industry’s long product cycle, if they begin now on refreshing some of their current models, the industry experts predict it will be 2019 or 2020 before Ford sees the benefits.

Unfortunately, it seems the CEO of the past three years has simply been incapable of multi-tasking.  Stepping back, the Ford CEO of the past three years violated a cdore principle.  Specifically, a leader’s fundamental responsibility is to keep the current business healthy and vibrant while also investing in the future so that things continue to progress as a company, both short-term and long-term.  That simply has not been happening at Ford and consequently, the board made its decision to pick a new leader.

Over the years, you see many examples of leaders/companies ignoring this principle of leading both the current and the future.  The usual mistake is to simply keep the current trains running and ignoring the future.  That is what the classic examples of Kodak, Blackberry, and Blockbuster represent.  In Ford’s situation, the leader simply got mesmerized by what the future was going to look like and he ignored the current business.

The wise leader knows that both the current and the future are critical and plans accordingly!

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