When Jim Hackett retired from the corner office at Steelcase Inc. in 2014, he told MiBiz the “narrative is still being written” about what he planned to do in the next phase of his professional life.
Last week, Hackett realized a significant chapter of that story when Ford Motor Co. selected him to serve as the 14th president and CEO in the automaker’s nearly 114-year history.
“A time of great change, in my mind, requires a transformational leader, and thankfully we have that in Jim,” Executive Chairman Bill Ford said in a press conference last week. “He’s really a proven transformational leader, he’s a visionary thinker.”
Hackett developed his reputation as an innovative leader in his 20-year tenure as CEO at Grand Rapids-based Steelcase, the market leader in the office furniture industry.
At Steelcase, he’s credited with leading a sweeping culture change in the company. Rather than flex Steelcase’s industrial muscle to compete, he led with lean manufacturing principles and design so the company could keep up with how technology was changing the way people worked.
“For a company that saw itself as a manufacturer of high-quality office furniture, Jim helped the company see we could be more than that if we thought about the impact the furniture had on the lives of the people who used it,” said Jim Keane, who worked with Hackett for 17 years before succeeding him as president and CEO.
“At the beginning, you put out a vision like that and you’re not sure exactly what to do with it,” he said. “Jim made sure it wasn’t just his idea. He brought everyone else along and helped us imagine how the company could begin to fill in those shoes. And we did.”
At the time he left Steelcase in 2014, Hackett was a member of Ford’s board of directors. He also went on to serve for more than a year as interim athletic director at the University of Michigan, where he helped turn around a struggling department and recruited Jim Harbaugh to serve as head football coach.
Last year, Ford convinced Hackett to give up his board seat to join the company’s management team and launch Ford Smart Mobility LLC, a subsidiary focused on designing and investing in new services that expand the automaker’s business model.
At Ford, Hackett, 62, succeeds Mark Fields, a 28-year veteran of the company who held the position for nearly three years.
Despite Ford Motor Co. posting record profits over the last two years, the board of directors decided to part ways with Fields, who had been under pressure because of the company’s share price, which dipped 40 percent during his tenure.
Fields also had the unenviable position of following a “legitimate superstar CEO” in Alan Mulally, who orchestrated a gutsy turnaround plan for a struggling Ford from 2006 to 2014.
“One of the most difficult things to do is to be a follow-on to somebody who’s spectacular,” said David Cole, chairman emeritus of the Ann Arbor-based Center for Automotive Research. “I think what really attracted the board to Jim is that they saw in him an Alan Mulally. That is, he was not afraid to change the business model, he was a consummate team-based leader.”
At Steelcase, Hackett had a knack for developing strong teams and leaning on them to help create the company’s vision for the future, according to Keane.
Keane recalled a two-day leadership workshop early in the company’s design-based transformation. Hackett immersed the senior leaders in training about technology and the internet, which was still in its early stages at the time. But rather than dictate the company’s vision to the leadership team, he asked each of them to write a letter describing how the company should position itself and worked with executives “at an individual level” to hone their ideas.
“He engaged the leadership team and said, ‘This is our vision and we’re going to create it together,’” Keane said. “Jim for his whole life has been a competitor. He is somebody who is always there to help others win.
“What the CEO brings is the ability to apply design thinking, to be able to connect the dots, to see patterns, to see opportunities, to build a strong team and help to activate those people to be the best they can be. That’s where Jim is good. He can do that in any industry.”
According to Cole, Hackett has a reputation as an executive of taking a “coach versus a king type approach” that focuses on the team’s success, not his own.
“He did a tremendous job at changing the business model at Steelcase and he did that at the University of Michigan as the athletic director. He brought a whole new approach,” Cole said. “We’re in a world that’s so amazingly complex and moving so fast today, that no single person is able to be smart enough to make all the good decisions. That was Alan Mulally — he understood that — and I think Jim Hackett does, too.”
DEFINING THE FUTURE
In outlining the changes at the company last week, Executive Chairman Ford said the revamped executive team will focus on global operational execution, modernizing Ford’s business and transforming the company’s culture and processes.
For Hackett, that means improving the speed at which the Dearborn-based automaker makes decisions. To do that, he said the company needs to empower its people with a clear vision of the future, which he describes as “a source of optimism” despite its challenges.
“The jobs at Steelcase and Ford aren’t as different as the size would tell you,” Hackett said during the press conference. “The biggest challenge there and here is to get everyone to see the future and that it’s our right to win there. I know how to do that.”
As he often did at Steelcase, Hackett repeatedly used the term “fitness” to describe how Ford must be prepared to change and evolve along with the markets. For Hackett, it all comes down to a lesson he learned as a player under University of Michigan’s legendary football coach Bo Schembechler: “You either get better or you get worse, you never stay the same.”
It’s a model he’s used as an executive leader that’s won him praise from even his staunchest rivals.
“Jim’s greatest gift, and what I think he brings to Ford, is his genuine belief in innovation and creativity,” Brian Walker, CEO of Zeeland-based Herman Miller Inc., said in an email to MiBiz. “Through Jim’s career, he’s helped craft the future without being afraid of the changes it presents. He knows how to connect with people and really make things happen.”
But while Hackett has a well-deserved reputation for innovation and creating a design-led culture at Steelcase, his results as a public company CEO are somewhat mixed.
After taking the company public in February 1998 to provide liquidity for its founding families, Steelcase’s shares dipped sharply, trading at a steep discount during his tenure. Even as this report went to press, the company’s shares were priced 40 percent less than its IPO price. That said, the company has consistently paid dividends to shareholders and bought back stock, providing a return to investors.
WEST SIDE STORY
By taking the leadership position at Ford, Hackett brings attention not only to his role at Steelcase and in the office furniture industry, but also to the West Michigan business community he’s been a part of for more than two decades.
“I’m excited about a former CEO of one of the big three on the west side of the state becoming the CEO of one of the big three companies on the east side of the state,” said John Berry, a veteran executive of the office furniture industry and current director of the Design Thinking Academy at Grand Valley State University. “I think it’s good for Jim Hackett, it’s good for Ford, and I think it’s good for the state of Michigan.
“Michigan has done more to affect — in a positive way — the way people work, live and move around. If you look at the office furniture environment, if you look at the automotive environment, Michigan leads the country in the design of that. This is a design-centric state. To me, this sort of helps in that recognition.”
That’s a view shared by Diana Sieger, the president of the Grand Rapids Community Foundation. Over the years, she’s worked closely with Hackett and his wife, Kathy, on philanthropy, including creating scholarships for local students.
Sieger also credits Hackett with helping her to discover the role design thinking can play in solving “intractable problems” that nonprofits face on a daily basis. He arranged for Sieger and other foundation executives to meet with the leaders at design think tank IDEO in San Francisco and the Stanford University Design School to study ways to apply design in their work.
“That was a real gift — it was a gift of time and it was a gift of knowledge,” she said. “He’s a person of integrity, he’s very collaborative, he instills in everyone the value that they hold. That is the epitome of the business community that we have here in West Michigan. The world will now see how leaders coming from our community can really excel.”