Hey Luddite CEO, It's Time to Go

Publisher's Outlook

Hey Luddite CEO, It's Time to Go

By Rich Tehrani, Group Editor-in-Chief, TMC  |  December 15, 2017

The Luddites were a group of English textile workers and weavers in the 19th century who destroyed weaving machinery as a form of protest. The group was protesting the use of machinery in a "fraudulent and deceitful manner" to get around standard labor practices. Luddites feared that the time spent learning the skills of their craft would go to waste as machines would replace their role in the industry.

These Luddites were workers, but what happens if you are CEO and aren't on the leading-edge of tech? We now have our answer: You can be fired.

Every company is going through transformation. Seven years ago if we were told an app could disrupt taxis using any person's car, or disrupt hotel rooms by using any person's apartment, we would have laughed out loud.

Now every company is being disrupted.

I was recently the keynote speaker at the Ideacom reseller event in New Orleans, and discussed all these points. And someone in the audience said that even the locksmith will be disrupted by smart home tech that unlocks doors from anywhere. Great point!

These ideas are not lost on Ford (News - Alert), which just replaced its CEO, who was lacking in tech smarts. Chief Executive Mark Fields will retire after 28 years with the auto maker. He will be succeeded by Jim Hackett, who has been the executive chairman of Ford Smart Mobility for the past 14 months.

A few years back I had a candid conversation with James Buczowski, a Henry Ford Technical Fellow, about the company’s connected ecosystem experiments and the future.


I asked the obvious question: How do you compete in the sharing economy with the Ubers of the world? He said he doesn’t see a threat to family driving. But, he added, perhaps younger, single people will choose ride sharing over ownership. He then made the case that vehicle ownership equates to freedom.

While he has a solid point, the fact is that the majority of cars spend most of their time idle. What if ride sharing takes up 20 percent of the slack? Does this mean a commensurate drop in sales?

I asked about the competition from Silicon Valley – the Googles and Teslas of the world. He explained some of these companies are logical partners for their vehicles. Interestingly, news was just released saying the talks between Ford and Google (News - Alert) fell apart under Fields. Back to the interview - I countered that cars are becoming more of a tech play and, as they do, the Valley will be more competitive. He dismissed the idea, explaining that cars have always had a lot of technology and they also will have other components such as vehicle dynamics, a suspension, and a body. He went on to say the company sees opportunity for technology to improve in the battery, motor, and drivetrain of vehicles.

We then discussed the company’s decision to grow its Palo Alto, Calif., research group to 125 people and focus on smart mobility, autonomous driving, data analytics, human machine interface, and deep learning. When I first heard the news of this center, I was a bit surprised because the company is headquartered in Michigan, and the state has been making a massive push to get more tech companies to relocate there. In this case, a local company decided to invest in California instead. It seems the reasons have to do with not only the ease of hiring the right people in the Bay Area, but perhaps more importantly learning how Silicon Valley works and applying the lessons learned back to Dearborn.

Ford, in other words, is learning to better compete with the new entrants in the space by mimicking the cultural dynamics inherent in the startup culture of northern California. In short, Ford seems to have thought through how to make better connected ecosystems. On the one hand, Ford indicates it’s not particularly concerned about new entrants from the Valley but it also seems to realize that it’s a big enough threat that it needs to emulate its best business practices.

Sure, Ford probably doesn’t want to go on the record saying it is afraid that an Apple (News - Alert) iCar will destroy it. But every auto company has to be looking at what happened to Motorola in the cellphone space shortly after its failed Apple partnership.

The move to elevate Jim Hackett to CEO illustrates that Ford is growing increasingly concerned about its future in a world where Tesla is becoming synonymous with "future car," and Google and Apple are spending billions in Ford’s core market. This same concern should be evident at the board and shareholder levels of all companies, as Luddites have no future as CEOs in today's digitally transformed economy.

Edited by Erik Linask