A Pioneer of the Open Office Helps Ford Rethink the Car
November 29 2016 - 1:08PM
Dow Jones News
By Christina Rogers
Ford Motor Co. is looking to reimagine the way people get from
point A to point B. It has turned to an unusual pick to lead the
charge: Jim Hackett, former chief executive at office-furniture
maker Steelcase Inc.
Mr. Hackett chairs Ford Smart Mobility LLC, a subsidiary formed
in March to explore new ventures in ride hailing, car sharing and
self-driving vehicles. One of several auto-industry outsiders
recruited by Ford CEO Mark Fields, Mr. Hackett is expected to help
rethink the ways Ford's cars connect with the outside world as well
as the company's role in the future of transportation. Also on his
list: figuring out how to make money at it, too.
Ford moves into transportation-related services at a time of
changing attitudes toward car ownership and emerging Silicon Valley
rivals like Uber Technologies Inc. and Alphabet Inc.'s Google.
Over 30 years at Steelcase, Mr. Hackett, age 61, reshaped the
company's workplace offerings, dispensing with cubicles and
embracing open offices. Later, as interim athletic director for the
University of Michigan, Mr. Hackett famously recruited NFL coach
Jim Harbaugh to lead Michigan's football program.
Mr. Hackett recently spoke about his new job, and why Ford is
looking beyond the car.
Edited excerpts:
WSJ: You were sitting on Ford's board when they recruited you
for this role. What was the mission?
Mr. Hackett: Mark [Fields, Ford's CEO] said 'your remit is to
come in and help us understand what kind of business models are
going to be required in this new space of mobility.' It was a broad
mandate.
I asked them if we could construct [the role] in a way that
there was a CEO running things -- I wasn't looking to be a CEO
again -- and an executive chairman. By making me executive
chairman, they allowed me to put as much or more time into the
thought part of things as in the running part, and that was
appealing to me.
WSJ: Ford anticipates its mobility ventures will eventually
return profit margins of 20% or more -- far higher than in the auto
business. Why is that?
Mr. Hackett: What reduces margins in our industry and puts
pressure on our P/E are the extreme amounts of capital required to
produce each dollar of profit. In this case, it doesn't take that.
It takes operating expense. You need software engineers and you
need designers. But it's not nearly as expensive as the capital it
takes to produce a car.
WSJ: What did Ford see in the acquisition of Chariot, the
van-shuttle service?
Mr. Hackett: You couldn't help but be smitten by the
entrepreneur who started it. [Ali Vahabzadeh] He did some things
that were quite impressive, using crowdsourcing as a mechanism for
determining where the vehicle goes, so it didn't have a fixed
route. The algorithm sorts the requests it gets and plans the
routes. It gives you the walking distance to pick it up and people
love that. There is a lot of data potential in this business.
WSJ: How will the rise of car-sharing and ride-sharing services
change the notion of car ownership?
Mr. Hackett: [Ownership] will be more tied to jobs to be done
that day: Are you commuting? Are you on vacation? Are you in a rush
somewhere? Are you worried about drinking and driving? All those
things will determine what mode of transportation you take.
WSJ: You've also partnered with a bike-sharing firm. What's the
connection to selling cars?
Mr. Hackett: They fit into an emerging transportation system
where people own vehicles but also share assets. So Chariot and
Motivate bike-share are the sharing plays we've made. More
important, it is about the data, which for us is really important
to the mystery of what the transportation system is exhaling every
day.
WSJ: What are the top three items on your to-do-list for
2017?
Mr. Hackett: No. 1 is to build the where-to-play, how-to-win
strategy around the world. Two, building out the rest of the team
to pull this off. Three, I've been given a license for creative
ideas and I need some early wins. This [van-shuttle service] is in
place and expanding. It's already gone to a second city. It's on
its way to four other cities in the first 16 months.
WSJ: Michigan football fans worship you for hiring Jim Harbaugh.
If you could do something equally noteworthy for Ford, what might
that be?
Mr. Hackett: I couldn't be happier with the success they're
enjoying. If I could leave an impact [at Ford], it's that this
brand and its people come out of the mobility challenge more
competitive. The next thing that hits [our industry] may not be a
financial crisis but a crisis of purpose.
Write to Christina Rogers at christina.rogers@wsj.com
(END) Dow Jones Newswires
November 29, 2016 12:53 ET (17:53 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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