Ford Motor’s CEO Shares How To Stay Relevant With One Simple Idea
The century-old car manufacturer is making a transition to a technology company with an inspiration in Moore’s Law.
PHOTO CREDIT: Getty Images
According to Ford Motor Company's President and CEO, Jim Hackett, the secret to transforming a century-old manufacturer into a technology company is simple: Moore's law.
Hackett is the former CEO of Steelcase, an office furniture producer based in Michigan, who retired in 2014 after 30 years with the company. Hackett joined Ford's board of directors in 2013, and although he had no previous experience in the car industry, was later swayed to come out of retirement and fill the Ford CEO position in May 2017.
For obvious reasons, he was an unexpected choice for the position, but while other car companies have thrived over the past decade, Ford had continued to struggle and lose valuable market cap. The company was looking to shake things up.
Hackett is now leading a massive $25 billion restructuring that includes, among other things, a strategy to stop making cars (except for the company's iconic Mustang). The company now plans to focus on trucks and S.U.V.'s.
More important, Hackett is leading the company's charge into technology, going so far as to rebrand to the company as a "technology company," a strategy that includes monetizing its driver data and leading the evolution of "smart cities."
In a profile with Freakonomics, Hackett points out that part of his inspiration came from Reed Hastings, founder and CEO of Netflix. In a 2011 interview with Charlie Rose, Hastings explained that all of the successful technology companies in Silicon Valley understood one simple rule: Moore's Law, or the generally accepted observation that computing power doubles about every two years.
Hastings went on to point out that any company with a calculator or spreadsheet could easily predict the future with remarkable accuracy through simple extrapolation of this simple law. The companies that were succeeding were simply the ones acting on the extrapolation.
According to Hackett, this ideology is not limited to technology, even if largely driven by it. Instead, he insists that for companies to succeed and stay relevant, they need to look beyond projecting today's capabilities onto tomorrow's needs and instead use this predictive rule to easily determine what the future will look like in ten, five or even two years -- then acting on it.
The problem for many entrepreneurs is that this extrapolation yields remarkable predictions that can seem unbelievable or even like science fiction. Looking back, however, at how much technology has evolved over the past few years -- and how accurately companies have predicted it -- it is not difficult to see how we take for granted many of the remarkable predictions from just a few short years ago.
While this strategy does not apply equally to all industries and companies, it is an ideology that is rooted in reason. We live in an era when new business trends and practices no longer require years to be recognized and adopted. Instead, what may have taken decades can take as little as 18 to 24 months to become relevant.
So, how do we stay ahead and effectively navigate the rapidly changing business landscape?
Delegate Today's Tasks
To focus on the future and your company's next iteration -- or the one after that -- you need to surround yourself with capable people who can run the everyday business, allowing you and your leadership team to be focus on the future vision and execution of the company.
Connect and Collaborate
With business changing so rapidly, it can seem overwhelming to keep current with trends, technology and practices. Moreover, a business leader these days has to be a generalist, understanding the importance of collecting and synthesizing data from a multitude of sources.
For that reason, it has never been more important to stay connected with individuals and organizations that are also leading change and can fill weaknesses in your organization. Keep in mind that, in my experience, the most effective partnerships often come from the least expected sources.
We are living in a world today that was dreamed about by visionaries just a few short years ago. Today, imagining a remarkable future is not flaky or flighty but rather a trait that could be the difference between building a sustainability company and getting lost in the dust heap of forgotten companies.
What do you think? How else can entrepreneurs prepare to be competitive in the future? Share your thoughts with me on Twitter.