Mark Fields was replaced as Ford CEO amid a big management shake-up. It was shocking to me since Fields was very instrumentals in Ford's comeback under Mullay. However, reports have stated that Mark Fields was replaced as CEO to stem the decline of Ford's falling share price, but as the old people say, there is more in the mortar than the pestle.
Something more was at play, and Bill Ford, the executive chairman of Ford, wasn’t about to make the same mistake twice that allowed the company to become mired in debt and close to bankruptcy. Although the stock price was an issue, the overall vibe of the company was changing, and one can sense the ghost of Ford past rearing its head again.
However, the board would have none of it and as such, a management shakeup was inevitable. But the big questions remain, why was Mark Fields replaced? Well, let's explore and this can serves as a lesson for any new leader.
During Ford resurgence, Mullaly implemented a management system that was laser focus on questioning the inner working at Ford and guess what, it worked.
If you don’t remember, Ford was on the brink of bankruptcy when Mulally and his team completely return the company back to profitability. My article From a 12 Billion Lost to a Spectacular Recovery. The 5 Leadership Skills Every Leader Can Learn From Allan Mulally gives you an in-depth look at that turnaround. The culture of the organization was changed, the values of the company was infused throughout the whole process, and the executive leadership was singing from the same hymnbook.
So why fix something that is clearly working. Now let's put the article into contexts.
The car industry is cutthroat competitive. As a car manufacturer, you have to be on top of your game because the industry is very dynamic, your competitors are innovating, and new companies are entering the market with cutting edge technology. Case in point, Tesla is now more valuable than Ford.
According to Bill Ford, the company was becoming a victim of its success with complacency becoming huge aspects of Ford culture, and as such, the company was moving away from its rigorous self-reflection and constant questioning, Mulally left in place when he resigned in 2013.
The industry is changing, electric and self-driving cars will be the cars of the future and as such, car manufacturers are innovating to position themselves for that reality. Bill Ford also stated "If you look at the technology coming into our industry, the competitors coming into our industry...we really need transformational leadership."
So you understand why the board was so uneasy about Fields leadership. According to Bryce Hoffman, Fields backed away from the Working Together culture Mulally worked so hard to instill at Ford, allowed needless bureaucracy to accrete itself like barnacles on Mulally’s streamlined management system.
The company lost the laser-like focus on “One Ford” that allowed the Dearborn automaker to save itself while the other Detroit car companies went bankrupt and begged the American people for a bailout. Clearly, Mark Fields and the Board had differences, and as such, the vision and strategy were very unclear.
Now, this can be very disastrous for any company, but even worst, to be in a very competitive industry with question marks over the vision and strategy spells trouble. Hoffman further indicated that the business environment is in constant flux today, more so than ever and every company needs to constantly stress-test its strategies and make sure the course it has chosen remains the correct one. When challenging your own assumptions becomes more difficult the more successful your organization is, you are in for some problems and Fields ran into this difficulty.
Why change something working so well. Maybe it is the ghost of Alan Mulally, just take a look at Boeing when Mulally left. Maybe it was ego, being the new man in charge, Fields probably wanted to leave his own legacy, but whatever it is, he found out the hard way don’t try to fix something that isn't broken.