Ford Puts New CEO in the Driver’s Seat

Ford's logo.

Image credit: rvlsoft / Shutterstock

On Monday, Ford replaced its current chief executive, Mark Fields, with Jim Hackett, who had been responsible for the Ford subsidiary that works on autonomous vehicles. During Fields’ three-year stint as CEO, Ford has seen losses in both sales and profits. Although the U.S. automotive industry as a whole has been soft, Ford’s sales are down 25% this year, and first quarter profits fell by 30%, which is a far greater decline than its competitors.

Ford’s board was critical of Fields’ failure to keep pace with companies like Tesla, General Motors, and Google in the development of self-driving cars. Ford has not only fallen behind these companies in this area, but it has also failed to deliver profitable sales of their existing models despite the fact that, at the recent annual meeting, Fields said that Ford was capable of staying competitive in the current automotive market while also “keeping one foot in the future.” Ford promised to have a fully autonomous car on the road by 2021. But the Board felt that was not soon enough to beat the competitors who are already testing such vehicles.

Other issues have dogged Fields during his time at Ford. Ford has had a number of safety recalls that have raised concerns about its ability to insure quality. Fields was also involved in a failed plan to build an assembly plant for small cars in Mexico. And as recently as last week, Fields cut 1,400 jobs in an effort to improve the bottom line. But the stock price continued to decline.

The appointment of Hackett to the top job is a signal that the Board sees self-driving cars as the wave of the future and will be putting more pressure on the new CEO to successfully and more quickly develop a self-driving automobile that can compete in the marketplace.

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Howard Schultz Steps Down as Starbucks CEO

A photo of the Starbucks logo.

Photo credit: jannoon028 / Shutterstock

Today, Starbucks announced that Howard Schultz is stepping down from his position as CEO. But Schultz isn’t completely leaving the company. The 63-year-old is taking on the role of executive chairman beginning on April 3, 2017.

Kevin Johnson, Chief Operating Officer at Starbucks, will replace Schultz as the new CEO.

“As I focus on Starbucks’ next wave of retail innovation, I am delighted that Kevin Johnson—our current president, COO, a seven-year board member and my partner in running every facet of Starbucks business over the last two years—has agreed to assume the duties of Starbucks chief executive officer. This move ideally positions Starbucks to continue profitably growing our core business around the world into the future,” Schultz stated.

But for as optimistic as Schultz seemed, investors weren’t buying it. Stocks fell by more than 3% following the announcement. Some are speculating that Schultz stepped down so he could pursue his political interests instead.

In an interview with CNN, Schultz stated, “Given the state of things in the country, there is a need to help those left behind.”

It’s still unclear exactly what Schultz was getting at. However, there are clues that suggest that Schultz might be making a run for POTUS come 2020.

For one, he is an outspoken Democrat and long-time backer of President Barack Obama. He even publicly endorsed presidential hopeful Hillary Clinton. It’s more than possible that given the results of the election, Schultz will be gunning for the highest political office in the country.

If it were true, there are already hints as to what kind of campaign he would be running. In the past, Schultz has supported a higher minimum wage. He’s even offered his employees free college.

In the mean time, Schultz assured investors that he is confident in Johnson’s ability to take over as CEO. Schultz went as far as to say Johnson was “better prepared than I am” to be CEO.

Why Being CEO Shouldn’t Always Be Your Goal

CEO

When Tom Gonser founded DocuSign 12 years ago, he knew he wouldn’t be their CEO forever. “At my last company, I was very focused on the product…I was continually over the product and engineering teams, and they were like ‘can you leave us alone?’” These past experiences drove Gonser to hand the reins over to DocuSign CEO Keith Krach. Fortunately, it appears that this was a good choice for DocuSign, which recently raised $278 million and has been a successful tech company over the past few years.

However, one might still have the question: why wouldn’t Gonser want to be a CEO? The CEO position is one of the most coveted in the business world, and arguably in general. When you think of the leader of a business, or getting to the “top of the ladder,” you think CEO. With such a coveted position available to him, why wouldn’t Gonser jump at the opportunity?

Because being CEO isn’t always the most desirable position for all business professionals.

While the pay and prestige of being a CEO might sound appealing, you might not have considered the incredibly hard work and long hours that could be required of a CEO. You’ll have to make important decisions that impact the lives of many of your employees…decisions you might not like making. What’s more, there are certain types of skills that you might not excel at (people management, high-level business strategy, risk/reward strategy, etc.) that are essential to a CEO’s success.

If you aren’t one for corporate politics, then you shouldn’t be the CEO of your company. If you want to be involved in the nuances and process of your business, you probably shouldn’t be the CEO. Just because you’ve achieved success in business doesn’t mean you have to be the top dog in charge, or even want to be.

There’s no shame in that. Think about it—we all have things we are good and bad at, and we all have different desires. Just because CEO is the shiniest position, doesn’t mean you have to strive for it.

How to Become a CEO

CEO

Being a CEO of a company is one of the most stressful yet rewarding jobs in the business field. It is a demanding role that generally attracts only the most talented and dedicated business people, pushing them to work harder than they ever have before. Do you feel like you have what it takes to become the CEO of a company?

There are multiple paths to becoming a CEO, and actually hitting it big will make becoming a CEO easier as time goes on. An example from both sides: your career might go something like Thierry Porté’s (he has served as CEO of Shinsei Bank, Tokyo and currently serves as CEO for NPG Wealth Management) or more like Lloyd Blankfein’s (he has worked for Goldman Sachs since 1981, but only became CEO in 2006).

First and foremost, you have to have the education to cut it as a CEO. Most likely, you’ll have to follow a path that results in going to business school, getting an MBA, and working your way up the corporate ladder. While this is not the only path to becoming a CEO, it is undoubtedly the most common.

Next, your career path has to make sense for becoming a CEO. You can’t just change your career in the middle and decide to become one. Due to the requisite skills and the great deal of preparation required to become a CEO, you can very rarely become one without having it as your career goal for a very long time. The lesson here: make your goal of becoming a CEO a priority in your life.

Beyond all of the training, experience, and determination, there are also intangibles that make becoming a CEO much easier. There are many personality traits that are advantageous for anyone who wants to become a CEO. There are skills like charisma and courage that are useful for leading others, as well as the ability to critically think, to plan events ahead of time, and to play political games that are often required of a CEO. While aptitude with these skills isn’t necessary at the beginning of your career, they certainly do help.

While CEOs can be understandably stressed and tired, there are also many great perks to being a CEO. You get to build a team in your image, make your own rules, and have control over your own salary. On top of that, there is the gratification that comes from knowing you run an entire business and that you positively influence the lives of other people.

So what do you think: do you have what it takes to become a CEO?

Things CEOs Wish They Knew When They Started

Advice

Don’t you wish that you could give your past-self advice? Many of today’s most successful CEOs certainly wish they could, but they will have settle with passing on their knowledge to future generations. Luckily for us, Forbes’ Christine Crandell recently asked some seasoned entrepreneurs and businesspeople what advice they wish they had been given earlier in their careers.

Crandell spoke with four CEOs: Sandra Kurtzig of Kenandy, Keith Krach of DocuSign, Andres Reiner of PROS, and Sid Banerjee of Clarabridge. In short, here’s what their main pieces of advice boiled down to:

  • Be customer obsessed
    • “We measure our success by our customers’ success.”—Krach
  • Know that your business’s success is very dependent on people
    • “[Millennials] have high expectations of how software should perform. They bring a consumer mindset to enterprise applications. While seasoned employees bring deep experience and adult supervision, you need both.”—Kurtzig
  • Diversify
    • “Diversity creates strong organizations where people naturally help each other…That, along with growing people from within by moving them across departments and roles, builds deep connections and empathy.”—Reiner
  • Keep your work and your life balanced
    • “Keep the vision in front of everyone, don’t’ take yourself too seriously and keep a healthy work/life balance.”—Krach
  • Don’t watch your competitors, watch trends
    • “Take risks. In today’s market, proven methods are not always the best methods…If an emerging trend looks stronger and is better than what you’re working with, embrace it.”—Kurtzig

Here is some additional advice from successful CEOs and entrepreneurs:

  • Learn to manage your credit cards and stay on top of your payments.
  • Skills are worth more than a job. It doesn’t matter if you have a long resume if you don’t have the skills to back it up.
  • You need a plan for your money and to learn how to manage your money.
  • Do something you love instead of simply chasing money.
  • Money doesn’t make you happy.

Looking for even more advice? Click here for further reading.

Marissa Mayer Hits Her 1 Year Anniversary at Yahoo

Marissa Mayer

IMG: Brigitte Lacombe via Glamour

Yahoo Inc.’s share prices have risen tremendously, more than 70% since Marissa Mayer became the Chief Executive. Since coming aboard, Yahoo has purchased 17 technology startups, most notably Tumblr and Summly, an app created by 17-year old Nick D’Aloisio. Yahoo paid $1.1 million for Tumblr alone.

Recreating Yahoo will be a slow process. Only about 4.9% of searches come from Yahoo. Many of the companies that they did buy were struggling and only had a few employees left.

Marissa Mayer is Yahoo’s sixth CEO in the past five years, including two interim CEOs. Google and Facebook generate much more revenue than Yahoo from ads, so there has been discussion on the Yahoo board about whether the company should remain an independent, publicly traded entity. While small, the revenue rose by 2% last year.

“It’s no longer shameful to work at Yahoo,” an employee said recently.

A Yahoo spokeswoman stated that “more people are applying to work at Yahoo and more employees are staying.”

Mayer’s goal in her process of turning the company around is making Yahoo something used on everyone’s mobile devices. She has also focused on redesigning the companies’ apps. 16% of iPhone users used a Yahoo app in June. After purchasing Tumblr, these figures rose to 22%. While this is progress, Facebook, Google and Twitter apps are used by 80%, 69% and 31% of iPhone users in June.

“Our biggest problem is impressions,” or usage of Yahoo’s websites, Ms. Mayer said in February. “The way to grow revenue is to grow usage or prices. We’re successfully growing prices…we need to grow usage.”

To view Marissa Mayer’s entire profile, click here.

Russian CEO Oleg Derpaska Gives His $3 Million Bonus to Employees

money

IMG: via Shutterstock

It happens everywhere. Companies claim to have no extra money to give their lower level employees raises, while big CEOs get huge bonuses. It’s unfortunate, but companies tend to value their CEOs over people they feel they can replace. One CEO has decided to end the inequality.

One CEO is doing his part to close huge pay gap between himself and his employees. Russian aluminum magnate Oleg Deripaska is using his entire $3 million bonus to buy shares for 120 of his more than 72,0000 employees, according to the BBC. While this is a one time thing, if successful, the company may give more awards to employees in similar ways.

While there is speculation that this move may be to distract people from the controversy around him, it still sets a great example. He has been accused of bribery and extortion in various lawsuits, but all claims have been very unsuccessful, according to ABC News.

Sparing his $3 million dollar bonus won’t make a very big cut on his $8.5 billion net worth, he is setting a great example. Bonuses to executives in the United States jumped up 25% last year according to The New York Times.

Deripaska isn’t the only CEO doing this. Yang Yuanqing, the head of technology company Lenovo, gave $3 million of his bonus away to some of his workers last year, but kept $2.2 million of it for himself.

Apple’s Stock Losing One-Third of Its Value in Six Months – What to do Now?

Apple

The big news in technology is that Apple’s stocks have lost one-third of their value in only six months. Due to this, a lot of people are pointing fingers at Apple’s CEO, Tim Cook.

Recently, Cook spoke at the Goldman Sachs technology conference to defend his company’s stock. While he didn’t march up on stage and announce that is what he was doing, it was pretty obvious to everyone around him. He explained to investors why they should continue to have faith in Apple, and talked about Apple’s superior user experience. “The only thing we’ll never do is make a crappy product,” he declared. “That’s the only religion we have: we have to do something great, bold, ambitious.”

Regardless of this, it is obvious to investors that Apple has taken a hit. No one expects them to go out of business or declare bankruptcy, but it is obvious they are struggling. The big question that comes when any company struggles is “how will they handle it?” With grace and dignity, or backlash and struggle? Henry Kravis, co-founder of the private equity firm Kohlberg Kravis Roberts & Co., shares his advice on finance: “Arrogance kills.” Unfortunately, with the iPod and iPhone putting Apple on top for so long, this is a hard lesson to learn.

The company currently has about $137bn cash on hand, at the stocks are at $475 a share, which is a still pretty good. What most people are suggesting is that they shake things up a bit. Reuters blogger Felix Salmon argued that Apple should ignore its stock price, because it says very little about the future of Apple. Bethany McLean at Reuters had a different opinion however, stating that Apple was overpriced to begin with and shouldn’t be worth more than $200 a share. After all of this information, all there is left to do is wait and see what direction Tim Cook and others decide to take Apple now.

Raymond McDaniel: Moody’s CEO

moody's raymond mcdaniel

Img: via Forbes

Raymond McDaniel is currently the CEO for Moody’s Corporation, which is one of the three biggest credit rating agencies along with S&P and Fitch. McDaniel is responsible for Moody’s two operating divisions: Moody’s Analytics and Moody’s Investor Service. He joined the company in 1987 and was named President in 2001. He is a member of the board of directors of John Wiley & Sons, Inc.

Before becoming President at Moody’s, Raymond McDaniel worked as an analyst in Asset Secularization. For a period of time, he worked abroad and served as the Managing Director for Moody’s Europe in London.

During his time at Moody’s, Raymond McDaniel has helped the company achieve record levels of financial performance as well as implementing new rating practices. McDaniel has also been involved in much of Moody’s philanthropy outreach.

“The apparatus that we have here for creating visibility around our programs, and that encourages employees to participate in the programs, works very well,” Ray McDaniel explained to Leaders Online Magazine in an interview. “Our employees know that Moody’s is involved in it and that it’s a good thing to do. The participation levels are strong. So I very much support what we’re doing, but I don’t think I need to drive momentum behind this. We’ve already got momentum behind this.”

The Moody’s Foundation helps to support education through mathematics, economics and finance, health and human services, arts and culture, civic, and economic development. Moody’s, along with McDaniel are also involved in the Posse Foundation. The Posee Foundation helps to identify high school students with “extraordinary academic and leadership potential” who might otherwise be overlooked by colleges. The foundation gives a diverse group of students internships that allow them to learn about the business world, a generally turns into a full time job after graduation.

“Diversity is valuable because we are in the risk assessment business and we want to make sure that we have the widest spectrum of perspectives available in that assessment that we can” Raymond McDaniel stated.

McDaniel holds a J.D. from Emory University of Law and a B.A. in Political Science from Colgate University.

Will the U.S. Dollar Beat out the Euro Again?

Euro

IMG: JT via Flickr

In November of 2012, France was downgraded by Moody’s from an Aaa to an Aa1. This is not a huge drop, however it does mean that the dollar may rise above the euro again. Moody’s is a credit rating agency, most known for their CEO Raymond McDaniel, who rate anything from businesses to countries based on their income, debt, etc. Just before France had been downgraded, it had rallied to it’s highest level in almost two weeks.

Rob Ryan, a strategist at RBS Singapore stated that, “It comes as a surprise to nobody. I don’t think it has that much of an impact.” The Yen is also starting to drop below the dollar as well. Last year it had a 7-month low in comparison to the dollar.

At one point, back in the early 2000s, the dollar actually was stronger than the euro. What does this drop mean? We may see the day again that the dollar is stronger than the euro. People who love to travel (including myself) will be able to travel to certain areas of Europe for cheaper, which is always a benefit considering how expensive traveling can be.

To Read more information about this, check out: “Euro slips after Moody’s cuts France; yen awaits BOJ”

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