Ford Motor Company is doing CEO succession right. On May 1 they announced that Mark Fields, a 25-year company veteran, will replace Alan Mulally as CEO and President, effective July 1. Fields emerged as Mulally’s likely successor when he was promoted to COO in December 2012. As he steps into this new position, his greatest challenge will be following in Mulally’s footsteps.
When Mulally arrived at Ford in 2006, he carried out a plan to borrow $23 billion to see the company through the rough times ahead. The loan allowed Ford to avoid the bailouts and bankruptcies that befell the predecessors of General Motors Co. and Chrysler Group. Since then, Ford has seen an increase in sales and is on track for a successful future.
“Thank you for leaving us this gift of a transformed Ford that we can all build on going forward,” Fields said to Mulally during a news conference. “I’m so blessed to be surrounded by a talented management team.”
Fields, who will be president as well as CEO, has engineered a few turnarounds of his own during his quarter century at Ford. At age 39 in 2000, Fields became CEO of Mazda Motor Corp., in which Ford had a controlling stake at the time. He led a turnaround at Mazda with several Ford executives with whom he later worked closely to revive Ford’s North American business.
“To watch him step up and do this job, and with his belief in the strategy, we have the right guy at the right time to take Ford forward,” Mulally said.
Mulally’s departure from Ford will be a “clean break” on July 1 as he steps down from his board position as well. After years of unplanned and rocky transitions, Ford is enjoying a new trend of smooth succession, which started in 2006 when Bill Ford stepped down as CEO to allow Mulally to shake up the declining company.
“This is CEO succession done right,” said Elle Hansen, senior consultant at ReGENERATION Partners.
Smooth leadership succession is difficult to come by, especially in family businesses. The uncertainty and vulnerability in making tough decisions can lead to high levels of stress and emotions. And, like Bill Ford realized, sometimes you need to step aside for someone better suited to navigate the challenges at hand. These are difficult questions to answer, which is why it is critical to engage a ReGENERATION Partners expert who can help make decisions in the best interest of the business. With our specialization in ownership, management and leadership succession, we can make the process much more manageable and the outcome more desirable.