1
00:00:01,880 --> 00:00:04,559
Speaker 1: You're listening to Math and Magic, a production of My

2
00:00:04,760 --> 00:00:10,080
Speaker 1: Heart Radio. So I drove to the University of New

3
00:00:10,080 --> 00:00:12,320
Speaker 1: Hampshire in staid I'd like to speak to the director

4
00:00:12,360 --> 00:00:14,840
Speaker 1: of admissions. She said, well, I'm sorry you don't have

5
00:00:14,840 --> 00:00:16,959
Speaker 1: an appointment, and I said, no, that's okay. I'll just

6
00:00:16,960 --> 00:00:20,120
Speaker 1: sit here and wait. So after about two hours as

7
00:00:20,160 --> 00:00:22,439
Speaker 1: she came over and said he's not gonna be able

8
00:00:22,480 --> 00:00:24,599
Speaker 1: to see you, and I said, no problem. I brought

9
00:00:24,640 --> 00:00:26,599
Speaker 1: a book and she finally looked at me and said,

10
00:00:26,640 --> 00:00:29,760
Speaker 1: you're not leaving. Ay you Well, she finally said okay,

11
00:00:29,800 --> 00:00:32,760
Speaker 1: he'll see you. And he said, okay, this is not

12
00:00:32,880 --> 00:00:35,839
Speaker 1: consistent with our rules. However, if you get me an

13
00:00:35,840 --> 00:00:39,680
Speaker 1: application in if it qualifies, I'll let you in. I

14
00:00:39,840 --> 00:00:43,840
Speaker 1: hustled and he let me in. Then, the arrogance of youth,

15
00:00:44,200 --> 00:00:47,839
Speaker 1: I didn't think to really thank him. Years later I

16
00:00:47,920 --> 00:00:52,479
Speaker 1: reconnected with him thanked him. Three years after that, he

17
00:00:52,720 --> 00:00:57,600
Speaker 1: was awarded New Hampshire's highest civilian honor, and he asked

18
00:00:57,600 --> 00:01:06,120
Speaker 1: me to be the guy presenting it to him. Hi,

19
00:01:06,160 --> 00:01:09,160
Speaker 1: I am Bob Pittman. Welcome to Math and Magic. Stories

20
00:01:09,200 --> 00:01:12,000
Speaker 1: from the Frontiers and Marketing And while we are still

21
00:01:12,040 --> 00:01:16,360
Speaker 1: in this pandemic fueled economic downturn, those frontiers can look

22
00:01:16,400 --> 00:01:19,240
Speaker 1: scary and there are often more questions than answers. Today

23
00:01:19,280 --> 00:01:22,080
Speaker 1: we have as our guest someone who has navigated waters

24
00:01:22,120 --> 00:01:25,920
Speaker 1: like this before and as a legendary American business executive,

25
00:01:26,200 --> 00:01:33,200
Speaker 1: and if anyone has useful insights gets him welcome. Dave Cody,

26
00:01:33,240 --> 00:01:37,240
Speaker 1: retired and legendary chairman and CEO of Honeywell and now

27
00:01:37,280 --> 00:01:40,360
Speaker 1: the executive chairman Averted Holdings. He also has a new

28
00:01:40,360 --> 00:01:43,400
Speaker 1: book coming out soon which we will dig into as well.

29
00:01:43,880 --> 00:01:46,880
Speaker 1: Dave has a remarkable success story. Morning grew up in

30
00:01:46,920 --> 00:01:50,800
Speaker 1: a small town New Hampshire environment, French Canadian background, and

31
00:01:50,840 --> 00:01:53,960
Speaker 1: even spoke French his first few years. He bounced around

32
00:01:53,960 --> 00:01:57,240
Speaker 1: before he finally finished college and joined GE where he

33
00:01:57,280 --> 00:01:59,920
Speaker 1: had a long and successful career in the Jack Welch years,

34
00:02:00,640 --> 00:02:03,640
Speaker 1: He was not picked this Jack successor, which Jack told

35
00:02:03,680 --> 00:02:06,400
Speaker 1: me later was one of his biggest mistakes, but that

36
00:02:06,480 --> 00:02:08,920
Speaker 1: did not slow Dave down. Dave went on to be

37
00:02:09,000 --> 00:02:11,920
Speaker 1: CEO of TRW and then to a long run as

38
00:02:12,000 --> 00:02:15,120
Speaker 1: CEO of Honeywell, where he grew the company's market value

39
00:02:15,320 --> 00:02:19,200
Speaker 1: from twenty billion to one hundred and twenty billion. During

40
00:02:19,240 --> 00:02:22,440
Speaker 1: his tenure. He's been a major voice in Washington for

41
00:02:22,520 --> 00:02:26,400
Speaker 1: business over his entire career. Dave loves music, people, and

42
00:02:26,440 --> 00:02:30,040
Speaker 1: the outdoors. Dave welcome. Nice to be here, Bob. Before

43
00:02:30,040 --> 00:02:32,120
Speaker 1: we get into the meat of it, Dave, I'd like

44
00:02:32,200 --> 00:02:34,120
Speaker 1: to do you in a feature. We called you in

45
00:02:34,160 --> 00:02:38,160
Speaker 1: sixty seconds. You're ready. Do you prefer Beatles or stones?

46
00:02:39,320 --> 00:02:44,720
Speaker 1: New Hampshire or New York, New Hampshire. Sunrise or sunset? Sunset?

47
00:02:44,960 --> 00:02:54,160
Speaker 1: Basketball or football? Basketball? Springer fall fall hunting or fishing fishing?

48
00:02:54,320 --> 00:03:00,040
Speaker 1: David ortiz Er, Tom Brady, Tom Brady Sweeter, say a

49
00:03:00,840 --> 00:03:05,440
Speaker 1: week scuba diving or skiing? Scuber pop or hip hop

50
00:03:05,520 --> 00:03:10,200
Speaker 1: music pop, It's about to get harder. Childhood hero Bill Russell.

51
00:03:10,360 --> 00:03:14,120
Speaker 1: First job picking blueberry, The craziest job you ever had,

52
00:03:14,639 --> 00:03:21,160
Speaker 1: digging cellar holes after the house had been constructed. Secret talent, well,

53
00:03:21,200 --> 00:03:24,520
Speaker 1: as I've described it, I seem to always know what

54
00:03:24,639 --> 00:03:28,600
Speaker 1: other people should be doing. Favorite artist probably John Lennon.

55
00:03:29,160 --> 00:03:33,359
Speaker 1: Historical figure you'd like to meet, Oh, George Washington. Title

56
00:03:33,400 --> 00:03:38,600
Speaker 1: of your memoir, So Winning Now Winning Later? Favorite food lobs,

57
00:03:38,640 --> 00:03:43,120
Speaker 1: the first concert Moody Blues. If you have one superpower,

58
00:03:43,600 --> 00:03:46,840
Speaker 1: what would you want it to be Wow. I guess

59
00:03:46,840 --> 00:03:49,760
Speaker 1: the ability to make people happy. That's a good one.

60
00:03:50,160 --> 00:03:53,640
Speaker 1: Let's jump in. You weathered the last two big recessions

61
00:03:53,640 --> 00:03:56,720
Speaker 1: and the driver's seated Honeywell. You took over Honeywell in

62
00:03:56,840 --> 00:04:00,640
Speaker 1: February two thousand two. You weathered the eight oh nine

63
00:04:00,760 --> 00:04:03,920
Speaker 1: Great Recession in the middle of your run. What advice

64
00:04:04,000 --> 00:04:06,400
Speaker 1: do you have for those of us running companies and

65
00:04:06,400 --> 00:04:08,800
Speaker 1: how to accelerate growth coming out on the other side.

66
00:04:09,320 --> 00:04:11,600
Speaker 1: I guess I'd have more than one piece of advice.

67
00:04:12,800 --> 00:04:16,120
Speaker 1: The first one to leaders is to not panic. There's

68
00:04:16,160 --> 00:04:19,360
Speaker 1: a real tendency amongst leaders to read what the herd

69
00:04:19,480 --> 00:04:21,520
Speaker 1: is thinking and kind of move with the herd. And

70
00:04:22,400 --> 00:04:25,359
Speaker 1: if there was any time where a leader has to

71
00:04:25,440 --> 00:04:31,279
Speaker 1: exercise independent thinking, it's a time like this. And it

72
00:04:31,360 --> 00:04:35,000
Speaker 1: doesn't mean driving for consensus, means getting all the facts

73
00:04:35,000 --> 00:04:39,440
Speaker 1: and opinions, being able to make a good independent judgment.

74
00:04:39,640 --> 00:04:44,360
Speaker 1: The second piece would be to think about recovery at

75
00:04:44,400 --> 00:04:48,479
Speaker 1: the same time that you're dealing with the recession. In

76
00:04:48,520 --> 00:04:51,760
Speaker 1: any recession, everybody is panicking and all they can think

77
00:04:51,800 --> 00:04:55,440
Speaker 1: about is what are they gonna do? And making decisions

78
00:04:55,480 --> 00:04:58,720
Speaker 1: for the short term, and they sometimes forget that no

79
00:04:58,720 --> 00:05:02,400
Speaker 1: matter how dire has have ever looked, recovery always comes.

80
00:05:03,000 --> 00:05:07,080
Speaker 1: So be thinking about your growth initiatives, whatever investments you

81
00:05:07,120 --> 00:05:11,760
Speaker 1: were making, how you maintain your base, how do you

82
00:05:11,839 --> 00:05:16,280
Speaker 1: treat your customers in particular during this time, But be

83
00:05:16,360 --> 00:05:20,560
Speaker 1: thinking about recovery at the same time you're reacting to everything.

84
00:05:20,720 --> 00:05:22,160
Speaker 1: I know a little bit about what you did. No,

85
00:05:22,240 --> 00:05:25,400
Speaker 1: I don't know. Nine you really use furloughs at a

86
00:05:25,480 --> 00:05:28,800
Speaker 1: time most people did not use furloughs. Can you talk

87
00:05:28,839 --> 00:05:31,920
Speaker 1: a little bit about that. It's very interesting to see, Bob,

88
00:05:32,120 --> 00:05:36,000
Speaker 1: now how many companies are using furloughs, and if you

89
00:05:36,040 --> 00:05:38,919
Speaker 1: go back to the Great Recession, no big company was

90
00:05:39,040 --> 00:05:42,280
Speaker 1: using them at all except for us that I'm aware of.

91
00:05:42,839 --> 00:05:45,559
Speaker 1: In fact, as a result of ours, Harvard Business School

92
00:05:45,560 --> 00:05:50,920
Speaker 1: wrote a case study about furloughs versus layoffs. And I'd

93
00:05:50,920 --> 00:05:52,960
Speaker 1: always been kind of nurturing this in the back of

94
00:05:53,000 --> 00:05:56,360
Speaker 1: my mind because I've been in businesses where they had

95
00:05:56,440 --> 00:05:58,440
Speaker 1: laid off a bunch of people and then they'd hire

96
00:05:58,480 --> 00:06:01,240
Speaker 1: them back, and in never quite made sense to me.

97
00:06:01,440 --> 00:06:05,039
Speaker 1: So it costs you six months between severance, warnack, whatever else,

98
00:06:05,839 --> 00:06:08,159
Speaker 1: then six months to get your money back for that

99
00:06:08,279 --> 00:06:11,919
Speaker 1: six months that they basically weren't doing anything. Then, assuming

100
00:06:11,920 --> 00:06:14,080
Speaker 1: it's an eighteen month recession, you get a return of

101
00:06:14,160 --> 00:06:17,720
Speaker 1: six months, and then you're scrambling to hire all those

102
00:06:17,720 --> 00:06:22,040
Speaker 1: people back because of the recovery. And I found myself

103
00:06:22,080 --> 00:06:25,239
Speaker 1: thinking about it like a plant and saying, if somebody said, Okay,

104
00:06:25,279 --> 00:06:28,320
Speaker 1: you're gonna build this plant, take you six months, then

105
00:06:28,360 --> 00:06:31,599
Speaker 1: six months to get your money back to even you'll

106
00:06:31,640 --> 00:06:34,599
Speaker 1: get a six months return, and then you shut it down.

107
00:06:35,320 --> 00:06:37,599
Speaker 1: How many people would do that. They'd say, well, that's silly,

108
00:06:37,760 --> 00:06:40,560
Speaker 1: but we do it with people all the time. So

109
00:06:41,120 --> 00:06:44,120
Speaker 1: we kind of broke ground on really understanding how to

110
00:06:44,200 --> 00:06:47,760
Speaker 1: do furloughs. And I was just looking for something that

111
00:06:47,960 --> 00:06:50,640
Speaker 1: was less costly because you didn't have to pay severance.

112
00:06:51,279 --> 00:06:54,000
Speaker 1: But I was also thinking about recovery and how could

113
00:06:54,000 --> 00:06:56,880
Speaker 1: I maintain what I called my industrial base at the

114
00:06:56,920 --> 00:07:00,920
Speaker 1: time so that they didn't just lose all that knowledge.

115
00:07:01,080 --> 00:07:02,880
Speaker 1: So we've worked our way through and found out it

116
00:07:02,960 --> 00:07:06,320
Speaker 1: was actually pretty difficult because state by state the rules

117
00:07:06,360 --> 00:07:10,080
Speaker 1: were different. Country by country the rules were different, so

118
00:07:10,120 --> 00:07:13,040
Speaker 1: you really had to figure it out. But it worked

119
00:07:13,520 --> 00:07:17,320
Speaker 1: extremely well for us. How did you think about reintroducing

120
00:07:17,360 --> 00:07:20,600
Speaker 1: your brands and your products to the marketplace after they

121
00:07:20,680 --> 00:07:23,720
Speaker 1: have been out of the people's minds during that slowdown.

122
00:07:24,640 --> 00:07:28,400
Speaker 1: I would say brand is probably less of an issue

123
00:07:28,440 --> 00:07:32,280
Speaker 1: for us, just because Honeywall is an industrial company. However,

124
00:07:32,320 --> 00:07:35,360
Speaker 1: the thing that we did do is we looked at

125
00:07:35,360 --> 00:07:38,559
Speaker 1: the recession and I wrote this in my share owners letters, saying,

126
00:07:38,640 --> 00:07:46,239
Speaker 1: there's three constituencies you have to manage customers, employees, and investors. Now,

127
00:07:46,520 --> 00:07:50,160
Speaker 1: this recession is a bit different, just because employees are

128
00:07:50,240 --> 00:07:53,200
Speaker 1: at a physical risk, so you have to take that

129
00:07:53,240 --> 00:07:56,960
Speaker 1: into consideration. First. I felt like we had to do

130
00:07:57,080 --> 00:08:01,400
Speaker 1: a great job with customers first, because if we didn't,

131
00:08:01,440 --> 00:08:06,000
Speaker 1: both investors and employees would suffer in the long term.

132
00:08:06,080 --> 00:08:09,000
Speaker 1: Anything that we had committed to customers, we made sure

133
00:08:09,040 --> 00:08:13,240
Speaker 1: that we prioritized. And after that then we figured out,

134
00:08:13,280 --> 00:08:15,600
Speaker 1: all right, it's going to be painful, so you have

135
00:08:15,680 --> 00:08:18,559
Speaker 1: to figure out what's the best way to manage the pain,

136
00:08:19,680 --> 00:08:26,440
Speaker 1: and we elected to have both investors and employees sharing that. Investors,

137
00:08:26,480 --> 00:08:29,040
Speaker 1: of course, because while we were able to hold our

138
00:08:29,080 --> 00:08:34,560
Speaker 1: margin rate flat, which was significant improvement over past performance,

139
00:08:35,360 --> 00:08:40,840
Speaker 1: a still sorid decline in earnings, with employees that we

140
00:08:40,880 --> 00:08:44,640
Speaker 1: took the approach to use furloughs instead of layoffs. But

141
00:08:44,720 --> 00:08:48,960
Speaker 1: we also worked on how could we impact benefits programs

142
00:08:49,000 --> 00:08:51,480
Speaker 1: like four oh one K matching, which you also see

143
00:08:51,520 --> 00:08:55,520
Speaker 1: a lot more of this time through because that wouldn't

144
00:08:55,520 --> 00:08:58,600
Speaker 1: affect people in the short term. They could still be

145
00:08:58,679 --> 00:09:02,000
Speaker 1: getting the salary that they needed in order to survive.

146
00:09:02,400 --> 00:09:04,920
Speaker 1: So let me ask you a question about your managers.

147
00:09:05,160 --> 00:09:08,079
Speaker 1: I think in any of these downturns, every manager, by

148
00:09:08,160 --> 00:09:12,640
Speaker 1: necessity switches their mindset from growth to survive. But as

149
00:09:12,679 --> 00:09:14,440
Speaker 1: you begin to come out and as you point out,

150
00:09:14,520 --> 00:09:17,080
Speaker 1: you should be looking for that recovery, how do you

151
00:09:17,120 --> 00:09:21,600
Speaker 1: get the managers to flip that mindset from survive to growth.

152
00:09:22,840 --> 00:09:25,800
Speaker 1: That ain't easy. I would say we were only about

153
00:09:25,960 --> 00:09:30,720
Speaker 1: four months into the Great Recession when we had them

154
00:09:30,720 --> 00:09:33,480
Speaker 1: thinking about, okay, how do you handle recovery? And this

155
00:09:33,559 --> 00:09:37,280
Speaker 1: is where I go back to independent thinking, because as

156
00:09:37,320 --> 00:09:40,959
Speaker 1: you start to have to make these difficult decisions, you

157
00:09:41,080 --> 00:09:43,600
Speaker 1: find a lot of your own staff not wanting to

158
00:09:43,640 --> 00:09:46,800
Speaker 1: make those decisions. And more than once I had that

159
00:09:47,040 --> 00:09:49,600
Speaker 1: discussions where I would start off with, look, that's why

160
00:09:49,600 --> 00:09:52,480
Speaker 1: they call it a recession. They don't call it a party.

161
00:09:52,679 --> 00:09:56,560
Speaker 1: We have to choose between two bad options. There's no

162
00:09:56,880 --> 00:10:00,960
Speaker 1: great third choice that's going to materialize, So you kind

163
00:10:00,960 --> 00:10:06,640
Speaker 1: of half that between discussion data and sometimes just having

164
00:10:06,679 --> 00:10:09,880
Speaker 1: to say I'm sorry, but I run the place and

165
00:10:09,920 --> 00:10:11,439
Speaker 1: I believe this is going to be the right thing

166
00:10:11,480 --> 00:10:17,160
Speaker 1: to do. It's not a very easy process, but one

167
00:10:17,200 --> 00:10:19,320
Speaker 1: that has to be managed. Let me ask a question

168
00:10:19,360 --> 00:10:22,920
Speaker 1: about predictions. You've lived through these before, you care to

169
00:10:22,920 --> 00:10:26,240
Speaker 1: make any prediction about when the recovery begins on this

170
00:10:26,280 --> 00:10:30,280
Speaker 1: one and the speed at which business returns. So this

171
00:10:30,360 --> 00:10:32,920
Speaker 1: is one where I tell every business leader, look, hope

172
00:10:32,960 --> 00:10:35,720
Speaker 1: for the best, prepare for the worst, because you just

173
00:10:35,840 --> 00:10:41,080
Speaker 1: don't know. Now if you said, okay, so given all that, still,

174
00:10:41,120 --> 00:10:44,040
Speaker 1: what do you think will happen. There's nothing that says

175
00:10:44,080 --> 00:10:47,600
Speaker 1: the virus has gone away. There's no vaccine on the horizon,

176
00:10:48,679 --> 00:10:51,760
Speaker 1: So I'd suspect that there is going to be more infection,

177
00:10:52,200 --> 00:10:54,040
Speaker 1: There are going to be more deaths when we get

178
00:10:54,040 --> 00:10:56,640
Speaker 1: back in the fall. But I also think there's going

179
00:10:56,679 --> 00:11:00,679
Speaker 1: to be a realization that we can't keep handling it

180
00:11:00,800 --> 00:11:05,280
Speaker 1: the way we have. This is just an incredibly costly

181
00:11:06,360 --> 00:11:10,040
Speaker 1: way to manage this, because right now we're putting an

182
00:11:10,160 --> 00:11:14,360
Speaker 1: unbelievable burden on the young. All of this is just

183
00:11:14,480 --> 00:11:18,000
Speaker 1: additional debt. But the economy will come back just because

184
00:11:18,280 --> 00:11:21,080
Speaker 1: we're gonna let people work. Let me go back a

185
00:11:21,080 --> 00:11:23,800
Speaker 1: little bit in time. You were a favorite go to

186
00:11:24,000 --> 00:11:27,839
Speaker 1: CEO for President Obama in spite of being a registered Republican.

187
00:11:28,640 --> 00:11:30,800
Speaker 1: I actually think you have more visits to the Obama

188
00:11:30,800 --> 00:11:34,000
Speaker 1: White House than any other ceo. How did that bond develop?

189
00:11:34,720 --> 00:11:39,440
Speaker 1: I got outreach from the Obama administration before they were

190
00:11:39,520 --> 00:11:42,880
Speaker 1: actually in office. I got this call saying, Hey, would

191
00:11:42,920 --> 00:11:45,680
Speaker 1: you participate in a group of CEOs coming to the

192
00:11:45,679 --> 00:11:48,880
Speaker 1: White House to talk about the stimulus plan in support

193
00:11:48,880 --> 00:11:50,719
Speaker 1: of it? And I said, yeah, absolutely, we got to

194
00:11:50,760 --> 00:11:54,240
Speaker 1: do this. The next day they called and said, well

195
00:11:54,280 --> 00:11:57,360
Speaker 1: would you lead the group? And I said okay. That

196
00:11:57,559 --> 00:11:59,640
Speaker 1: night they called and said would you be willing to

197
00:12:00,480 --> 00:12:05,000
Speaker 1: support it with the press. I said yeah, sure. So

198
00:12:05,240 --> 00:12:07,800
Speaker 1: on the eighth day we had our meeting. Then they

199
00:12:07,800 --> 00:12:10,880
Speaker 1: said okay, get ready, were going in the East Room.

200
00:12:11,040 --> 00:12:14,839
Speaker 1: Nobody prepared me for what was going to happen, because

201
00:12:14,840 --> 00:12:18,000
Speaker 1: when we walked out on that stage, I thought they'd

202
00:12:18,040 --> 00:12:22,680
Speaker 1: be like four or five reporters. There were two hundred cameras,

203
00:12:23,040 --> 00:12:28,720
Speaker 1: video cameras. It was kind of an interesting experience, but

204
00:12:28,960 --> 00:12:31,880
Speaker 1: I was strongly supportive, just like I am now with

205
00:12:31,920 --> 00:12:35,040
Speaker 1: a spending they've been doing, because you can't have government

206
00:12:35,480 --> 00:12:38,520
Speaker 1: falling back at a time like this. And I think

207
00:12:38,559 --> 00:12:43,120
Speaker 1: they appreciated the fact that, as a registered Republican, I

208
00:12:43,200 --> 00:12:45,760
Speaker 1: was willing to come and support what they were doing

209
00:12:45,760 --> 00:12:47,360
Speaker 1: because I did think it was the right thing for

210
00:12:47,400 --> 00:12:50,120
Speaker 1: the country. I was able to develop a feeling of

211
00:12:50,160 --> 00:12:53,079
Speaker 1: trust with people there. They knew I wouldn't say something

212
00:12:53,120 --> 00:12:55,680
Speaker 1: that I didn't believe, but they also knew they could

213
00:12:55,679 --> 00:12:57,880
Speaker 1: get the straight scoop from me without any kind of

214
00:12:57,960 --> 00:13:00,480
Speaker 1: ideology when it came to what was going on out

215
00:13:00,520 --> 00:13:04,000
Speaker 1: there or what we ought to be doing. Your predecessors

216
00:13:04,000 --> 00:13:08,119
Speaker 1: at Honeywell avoided Washington. You embraced it. Why did you change?

217
00:13:08,520 --> 00:13:13,520
Speaker 1: Is a symbiotic relationship between government and business, and neither

218
00:13:13,559 --> 00:13:17,920
Speaker 1: seems to understand the other all that well, and business

219
00:13:18,040 --> 00:13:22,720
Speaker 1: cannot be successful without government, and government's not going to

220
00:13:22,760 --> 00:13:26,520
Speaker 1: be successful without business. And I used to say with

221
00:13:26,600 --> 00:13:32,400
Speaker 1: government that not only does it regulate, but it enables business.

222
00:13:32,520 --> 00:13:38,199
Speaker 1: Business cannot ignore government because all that enabling is going

223
00:13:38,280 --> 00:13:40,000
Speaker 1: on and we need to be a part of it.

224
00:13:40,559 --> 00:13:43,280
Speaker 1: So I felt it was important for us to participate,

225
00:13:43,559 --> 00:13:46,160
Speaker 1: and I devoted a lot of time to it. Dave,

226
00:13:46,280 --> 00:13:48,160
Speaker 1: let's go back in time. You and I are the

227
00:13:48,200 --> 00:13:50,559
Speaker 1: same age, but from opposite ends of the country. You're

228
00:13:50,559 --> 00:13:53,200
Speaker 1: from the top of the country. Little town in New Hampshire.

229
00:13:53,400 --> 00:13:56,880
Speaker 1: Was it sun Cook? Yeah? Named after the sun Cook Indians.

230
00:13:57,040 --> 00:14:00,320
Speaker 1: Can you describe your early life? Paint a picture of

231
00:14:00,360 --> 00:14:04,559
Speaker 1: America and New Hampshire. It was a little French Canadian

232
00:14:04,880 --> 00:14:10,360
Speaker 1: milltown enclave in New Hampshire, which occurred throughout New England.

233
00:14:10,600 --> 00:14:13,960
Speaker 1: So until I was three, I spoke French only. We

234
00:14:14,040 --> 00:14:19,040
Speaker 1: spoke no English. My mom and dad had eighth grade educations.

235
00:14:19,080 --> 00:14:22,080
Speaker 1: My mom got a secretarial degree that took her a

236
00:14:22,160 --> 00:14:24,320
Speaker 1: year to get so that she could get a better job.

237
00:14:25,320 --> 00:14:27,400
Speaker 1: There weren't a want of role models, so it was

238
00:14:27,520 --> 00:14:30,040
Speaker 1: kind of tough just trying to figure out what do

239
00:14:30,120 --> 00:14:31,640
Speaker 1: I want to do? Where do I want to go?

240
00:14:31,960 --> 00:14:34,280
Speaker 1: What sounds like those from your background that you did

241
00:14:34,400 --> 00:14:38,880
Speaker 1: learn responsibility early and learned to be industrious. The story

242
00:14:38,920 --> 00:14:41,720
Speaker 1: goes that you actually want into town to pay the

243
00:14:41,760 --> 00:14:44,160
Speaker 1: family bills. You were the one that took the cash

244
00:14:44,200 --> 00:14:46,120
Speaker 1: and you were still a kid, And we go around

245
00:14:46,240 --> 00:14:48,040
Speaker 1: every one of the stores and pay the bills. It's

246
00:14:48,080 --> 00:14:51,440
Speaker 1: not a real story. Man, you are good. One of

247
00:14:51,440 --> 00:14:55,600
Speaker 1: the things that I have always told people is that

248
00:14:55,640 --> 00:14:57,960
Speaker 1: when they ask a question like you know, where did

249
00:14:57,960 --> 00:15:01,280
Speaker 1: you learn all your leadership lessons? And they expect me

250
00:15:01,320 --> 00:15:03,480
Speaker 1: to name a famous CEO, and I always tell him

251
00:15:03,480 --> 00:15:06,480
Speaker 1: the same thing, as you know, I learned most of

252
00:15:06,480 --> 00:15:08,440
Speaker 1: what I needed to know from my mom and dad.

253
00:15:09,120 --> 00:15:13,280
Speaker 1: They really were terrific and very good at instilling the

254
00:15:13,360 --> 00:15:17,480
Speaker 1: right kind of values, whether it was hard work, responsibility.

255
00:15:18,200 --> 00:15:20,120
Speaker 1: You need to be able to take care of yourself

256
00:15:20,200 --> 00:15:23,720
Speaker 1: and not expect others to do it. My mom would

257
00:15:23,720 --> 00:15:26,680
Speaker 1: give me the money to pay all the bills in Manchester,

258
00:15:26,800 --> 00:15:29,960
Speaker 1: which was twelve miles away. I had to get on

259
00:15:30,000 --> 00:15:34,240
Speaker 1: the bus I go into Manchester, and she had given

260
00:15:34,280 --> 00:15:36,440
Speaker 1: me all the directions that I had to memorize and

261
00:15:37,080 --> 00:15:39,800
Speaker 1: pay this much here, make sure you get a receipt

262
00:15:39,840 --> 00:15:42,640
Speaker 1: and go to this place. And I never thought too

263
00:15:42,720 --> 00:15:45,120
Speaker 1: much about it. I just did what she told me.

264
00:15:45,800 --> 00:15:48,800
Speaker 1: And I think back to my dad always telling us

265
00:15:48,920 --> 00:15:52,200
Speaker 1: be a leader, not a follower. My mom always saying

266
00:15:52,320 --> 00:15:55,760
Speaker 1: think for yourself. It really instills the right kind of values.

267
00:15:55,920 --> 00:15:59,600
Speaker 1: You've got this really interesting journey from high school to college,

268
00:16:00,000 --> 00:16:02,880
Speaker 1: I admitted. Then you decided you wanted to get on

269
00:16:03,000 --> 00:16:05,800
Speaker 1: with your life. You're work in your dad's garage, were

270
00:16:05,800 --> 00:16:09,280
Speaker 1: thinking about being a carpenter's apprentice with an uncohole, almost

271
00:16:09,360 --> 00:16:13,680
Speaker 1: joined the Navy, and at the last minute you were

272
00:16:13,760 --> 00:16:16,920
Speaker 1: saved by the director of admissions at the University of Hampshire.

273
00:16:16,960 --> 00:16:18,720
Speaker 1: You want to tell that story and how that changed

274
00:16:18,720 --> 00:16:20,960
Speaker 1: your life. If there's anything you can glean from what

275
00:16:21,040 --> 00:16:24,600
Speaker 1: you just said, it's that I was anxious to get

276
00:16:24,640 --> 00:16:28,000
Speaker 1: on with my life and make something of myself, but

277
00:16:28,120 --> 00:16:32,480
Speaker 1: I was totally directionless. I knew I didn't want to

278
00:16:32,560 --> 00:16:35,880
Speaker 1: keep living with no money the way I always had

279
00:16:36,320 --> 00:16:39,800
Speaker 1: to your point, after bouncing around enlisting in the Navy

280
00:16:39,840 --> 00:16:42,400
Speaker 1: and then backing out the day before I was to

281
00:16:42,440 --> 00:16:46,440
Speaker 1: be sworn in, Thank god that worked that way, I decided, Okay,

282
00:16:46,480 --> 00:16:48,840
Speaker 1: I need to get back into school. It seems to

283
00:16:48,840 --> 00:16:50,800
Speaker 1: be the only thing I'm good at. And I wasn't

284
00:16:50,840 --> 00:16:53,640
Speaker 1: good as a mechanic, I wasn't good as a carpenter's apprentice.

285
00:16:54,320 --> 00:16:57,040
Speaker 1: So I drove to the University of the Hampshire about

286
00:16:57,120 --> 00:17:00,640
Speaker 1: five minutes away, found the director of admissions. I went

287
00:17:00,680 --> 00:17:03,840
Speaker 1: to their office, and you recall these kind of days, Bob.

288
00:17:03,880 --> 00:17:07,160
Speaker 1: I had my jeans, my flannel shirt, my long hair

289
00:17:07,320 --> 00:17:09,960
Speaker 1: and went in and said I'd like to speak to

290
00:17:10,000 --> 00:17:12,680
Speaker 1: the director of admissions. She said, well, I'm sorry you

291
00:17:12,720 --> 00:17:14,720
Speaker 1: don't have an appointment, and I said, now that's okay.

292
00:17:14,880 --> 00:17:16,920
Speaker 1: I'll just sit here and wait. I'm sure he's bound

293
00:17:16,920 --> 00:17:20,040
Speaker 1: to have some time at some point. So after about

294
00:17:20,160 --> 00:17:22,879
Speaker 1: two hours of sitting there, she came over and said,

295
00:17:23,560 --> 00:17:25,480
Speaker 1: you know he's not gonna be able to see you,

296
00:17:25,880 --> 00:17:27,679
Speaker 1: and I said, no problem, I brought a book. I

297
00:17:27,720 --> 00:17:31,200
Speaker 1: can wait. Whenever he leaves, I'll catch him. She finally

298
00:17:31,200 --> 00:17:32,920
Speaker 1: looked at me and said you're not leaving, are you.

299
00:17:33,280 --> 00:17:37,080
Speaker 1: Well she finally said, okay, he'll see you. So I

300
00:17:37,119 --> 00:17:41,439
Speaker 1: went into his office and explained the whole thing, and

301
00:17:41,480 --> 00:17:45,760
Speaker 1: he said, okay, well, this is not consistent with our rules. However,

302
00:17:46,359 --> 00:17:48,320
Speaker 1: if you get me an application in by the end

303
00:17:48,320 --> 00:17:50,520
Speaker 1: of the week, if it qualifies, I'll let you in.

304
00:17:51,760 --> 00:17:56,600
Speaker 1: So I hustled got it into him and he let

305
00:17:56,640 --> 00:17:59,680
Speaker 1: me in. I always say that in the arrogance youth.

306
00:18:01,000 --> 00:18:04,040
Speaker 1: I didn't think to really thank him, and it was

307
00:18:04,560 --> 00:18:08,040
Speaker 1: years later that I said, cheefs you know, I had

308
00:18:08,040 --> 00:18:11,640
Speaker 1: to track that guy down. He really did something special

309
00:18:11,680 --> 00:18:15,680
Speaker 1: for me, and I did. His name was Gene Savage,

310
00:18:16,440 --> 00:18:20,520
Speaker 1: and I reconnected with him, thanked him, and come to

311
00:18:20,560 --> 00:18:22,960
Speaker 1: find out, I was not the only person he'd ever

312
00:18:23,160 --> 00:18:26,959
Speaker 1: saved like this. He was just that kind of guy.

313
00:18:27,320 --> 00:18:30,479
Speaker 1: And it was about three years after that he was

314
00:18:30,840 --> 00:18:35,080
Speaker 1: awarded New Hampshire's highest civilian honor, called the Petty Metal,

315
00:18:36,000 --> 00:18:38,399
Speaker 1: and he asked me to be the guy presenting it

316
00:18:38,440 --> 00:18:42,480
Speaker 1: to him. Breaking the rules does work sometimes, Yeah, it does.

317
00:18:42,560 --> 00:18:45,960
Speaker 1: Too Many people just kind of get into enforcing the

318
00:18:46,080 --> 00:18:50,040
Speaker 1: rules and don't really think sometimes about well, you know,

319
00:18:50,080 --> 00:18:52,400
Speaker 1: what's really the right thing to do here. But there's

320
00:18:52,440 --> 00:18:54,240
Speaker 1: a lesson in that. I think for business too. And

321
00:18:54,280 --> 00:18:56,399
Speaker 1: it sounds like you've used a lot in your career.

322
00:18:56,920 --> 00:19:01,119
Speaker 1: I have, and that includes giving people of second chance

323
00:19:01,280 --> 00:19:06,120
Speaker 1: when things are warranted, and I benefited from second chances

324
00:19:06,720 --> 00:19:09,840
Speaker 1: that I always kept that in mind. Just hold on

325
00:19:09,880 --> 00:19:12,639
Speaker 1: a second, because we've got so much more to talk about.

326
00:19:12,800 --> 00:19:19,800
Speaker 1: We'll be back after a quick break. Welcome back to

327
00:19:19,920 --> 00:19:24,880
Speaker 1: math and magic. You had an interesting path through college.

328
00:19:24,920 --> 00:19:27,240
Speaker 1: You worked full time at night, you did college in

329
00:19:27,280 --> 00:19:29,720
Speaker 1: the day. You took a year off to become a

330
00:19:29,760 --> 00:19:33,640
Speaker 1: commercial fisherman. Fortunately you came back to your census finished college.

331
00:19:34,480 --> 00:19:37,040
Speaker 1: You joined g E after college and began to move

332
00:19:37,119 --> 00:19:40,399
Speaker 1: up the ranks. When in that process did you realize

333
00:19:40,440 --> 00:19:43,439
Speaker 1: you had real management potential? Actually, I was working at

334
00:19:43,520 --> 00:19:47,400
Speaker 1: ge A is an hourly employee night while I went

335
00:19:47,440 --> 00:19:51,639
Speaker 1: to school those last couple of years. I graduated and

336
00:19:52,000 --> 00:19:55,440
Speaker 1: I went back to school just because I got scared.

337
00:19:56,320 --> 00:19:58,760
Speaker 1: I got married and we were living in this third

338
00:19:58,800 --> 00:20:02,280
Speaker 1: floor on he did uninsulated apartment in New Hampshire, which

339
00:20:02,280 --> 00:20:05,639
Speaker 1: means she gets chilly in the in the winter. And

340
00:20:05,800 --> 00:20:09,679
Speaker 1: first month my wife says she's pregnant, and then fourth

341
00:20:09,720 --> 00:20:13,160
Speaker 1: month she said she couldn't work anymore. And I realized,

342
00:20:13,200 --> 00:20:16,119
Speaker 1: oh my god, we have to live on my paycheck

343
00:20:16,160 --> 00:20:20,160
Speaker 1: now as an hourly employee. And about four weeks after

344
00:20:20,200 --> 00:20:22,840
Speaker 1: I graduated, they let me interview for an exempt job

345
00:20:22,840 --> 00:20:26,280
Speaker 1: and I got it, and I started kind of just

346
00:20:26,480 --> 00:20:30,320
Speaker 1: working from that point, and all I wanted was a

347
00:20:30,520 --> 00:20:33,719
Speaker 1: job that would pay more than the last one. Just

348
00:20:33,800 --> 00:20:36,080
Speaker 1: as I felt I was making some progress, I ended

349
00:20:36,119 --> 00:20:38,919
Speaker 1: up getting divorced. That put me back in the hole again.

350
00:20:39,040 --> 00:20:42,119
Speaker 1: So it probably took me until I was thirty before

351
00:20:42,200 --> 00:20:44,320
Speaker 1: I finally got to a point where I said, finally

352
00:20:44,960 --> 00:20:48,440
Speaker 1: I could pay my bills and not worry. The idea

353
00:20:48,480 --> 00:20:51,960
Speaker 1: of becoming a CEO didn't really dawn on me until

354
00:20:52,040 --> 00:20:54,879
Speaker 1: I was about forty years old and I was in

355
00:20:54,920 --> 00:20:57,880
Speaker 1: a job and said, son of a gun, I think

356
00:20:57,920 --> 00:21:00,879
Speaker 1: I'm actually not so bad at this. I think there'd

357
00:21:00,880 --> 00:21:03,920
Speaker 1: be a chance for me to do something somewhere. That's

358
00:21:03,920 --> 00:21:05,800
Speaker 1: the first time I ever really thought about it. Up

359
00:21:05,840 --> 00:21:08,440
Speaker 1: to that point. It was just a matter of get

360
00:21:08,440 --> 00:21:10,800
Speaker 1: a job that pays more, so I don't have to worry.

361
00:21:11,119 --> 00:21:14,520
Speaker 1: You wound up running the g E Appliance unit very successfully,

362
00:21:14,560 --> 00:21:17,840
Speaker 1: a six billion dollar business. There was a very visible

363
00:21:18,000 --> 00:21:21,400
Speaker 1: succession process when Jack Welch was going to step down.

364
00:21:22,160 --> 00:21:25,880
Speaker 1: Looking back on that process, was that a good way

365
00:21:25,960 --> 00:21:28,280
Speaker 1: to look for a successor? I mean, Jack says it

366
00:21:28,400 --> 00:21:31,440
Speaker 1: didn't work. It was a mistake for him. He missed you. Well,

367
00:21:31,520 --> 00:21:33,359
Speaker 1: it's nice to hear you say that. I have to

368
00:21:33,400 --> 00:21:35,760
Speaker 1: say that when I went through my own succession process,

369
00:21:35,920 --> 00:21:38,160
Speaker 1: I read a lot of literature trying to make sure

370
00:21:38,200 --> 00:21:40,520
Speaker 1: that I did it right. I didn't want to make

371
00:21:40,600 --> 00:21:43,160
Speaker 1: a mistake. I wanted the company to do well. Ten

372
00:21:43,280 --> 00:21:47,440
Speaker 1: years after I left. I really wanted to build an institution.

373
00:21:48,119 --> 00:21:50,040
Speaker 1: One of the things kind of struck me is how

374
00:21:51,160 --> 00:21:53,400
Speaker 1: really weak the literature is out there. And I read

375
00:21:53,440 --> 00:21:56,960
Speaker 1: a lot of stuff where they talked about this company's

376
00:21:57,000 --> 00:22:00,240
Speaker 1: great succession process and then you'd say, yeah, but you

377
00:22:00,280 --> 00:22:02,760
Speaker 1: know that guy got fired four years later, So how

378
00:22:02,800 --> 00:22:05,040
Speaker 1: good is the process if it yields a bad result?

379
00:22:05,920 --> 00:22:10,440
Speaker 1: So I took a different approach and went through a

380
00:22:11,160 --> 00:22:15,080
Speaker 1: bunch of interviews with retired CEOs, some of whom IT

381
00:22:15,160 --> 00:22:18,600
Speaker 1: had worked, some for whom it had not, and asked

382
00:22:18,640 --> 00:22:20,879
Speaker 1: them what did they miss, what did they like that

383
00:22:20,960 --> 00:22:23,600
Speaker 1: they had done, what would they have done differently? And

384
00:22:23,760 --> 00:22:27,480
Speaker 1: developed my own process. Well, shareholders clearly appreciate it because

385
00:22:27,600 --> 00:22:30,000
Speaker 1: the company kept growing as doing a good job, which

386
00:22:30,040 --> 00:22:32,600
Speaker 1: I think is a testament to the legacy you built.

387
00:22:32,640 --> 00:22:35,720
Speaker 1: But also that succession plan. When you left GE you

388
00:22:35,800 --> 00:22:38,320
Speaker 1: went to tr WT, but left pretty quickly to go

389
00:22:38,480 --> 00:22:41,160
Speaker 1: be CEO of Honeywell in early two thousand and two.

390
00:22:41,359 --> 00:22:44,560
Speaker 1: Why that jump tre w as a company was front

391
00:22:44,680 --> 00:22:51,000
Speaker 1: with difficulty. They had fired the three previous successors. So

392
00:22:51,280 --> 00:22:53,800
Speaker 1: when I went there, I said, we're going to set

393
00:22:53,880 --> 00:22:57,159
Speaker 1: up something so that if I'm not made CEO by

394
00:22:57,200 --> 00:23:02,920
Speaker 1: a certain date, you'll have to pay me ten million dollars. Now,

395
00:23:03,560 --> 00:23:05,760
Speaker 1: most people would look at that and go, oh, okay,

396
00:23:05,840 --> 00:23:10,280
Speaker 1: well that's not gonna happen. It nearly did. They damn

397
00:23:10,320 --> 00:23:14,159
Speaker 1: near fired me, and the CEO went to the board

398
00:23:14,359 --> 00:23:17,160
Speaker 1: demanding that I be fired. I ended up going through

399
00:23:17,280 --> 00:23:21,760
Speaker 1: a three month investigation by the board to find out

400
00:23:22,119 --> 00:23:26,040
Speaker 1: who was right here. Well, the board ended up deciding

401
00:23:26,160 --> 00:23:29,800
Speaker 1: that I was the right call. So they did end

402
00:23:29,880 --> 00:23:32,800
Speaker 1: up making me CEO, but they still didn't make my

403
00:23:32,880 --> 00:23:36,800
Speaker 1: life that easy. After that, Tom Neff reached out to

404
00:23:36,880 --> 00:23:39,520
Speaker 1: me in like December of old one and said, hey,

405
00:23:39,600 --> 00:23:42,280
Speaker 1: would you be interested in looking at the Honeywell job?

406
00:23:42,359 --> 00:23:45,960
Speaker 1: And at first I said no, and said, look, I've

407
00:23:46,240 --> 00:23:48,480
Speaker 1: just started here. There's a lot of things I got

408
00:23:48,560 --> 00:23:50,680
Speaker 1: to get done, and I just, you know, wouldn't feel

409
00:23:50,720 --> 00:23:52,840
Speaker 1: right about it. He said, well, I'll send you a

410
00:23:52,880 --> 00:23:54,480
Speaker 1: bunch of stuff, take a look, give me a call.

411
00:23:54,960 --> 00:23:58,080
Speaker 1: So he sent it to me, and I read all

412
00:23:58,119 --> 00:24:01,800
Speaker 1: the stuff, watched the videos, and I found myself thinking

413
00:24:01,880 --> 00:24:04,720
Speaker 1: why was I being so loyal to a group of

414
00:24:04,760 --> 00:24:08,880
Speaker 1: people who had exhibited no loyalty towards me? I thought, okay,

415
00:24:08,960 --> 00:24:11,720
Speaker 1: this is a better opportunity. I ought to give it

416
00:24:11,800 --> 00:24:14,760
Speaker 1: a try and see what I can do. So I

417
00:24:15,080 --> 00:24:17,560
Speaker 1: elected to join. I had no idea what I was

418
00:24:17,600 --> 00:24:20,639
Speaker 1: getting myself into. I knew it wasn't going to be easy.

419
00:24:21,760 --> 00:24:24,720
Speaker 1: But as bad as it looked externally, it was even

420
00:24:24,840 --> 00:24:28,040
Speaker 1: worse internally. For the first four and a half months

421
00:24:28,119 --> 00:24:30,119
Speaker 1: that I was the CEO, I was not allowed to

422
00:24:30,160 --> 00:24:33,360
Speaker 1: see the books and what I would ask a finance guy,

423
00:24:33,960 --> 00:24:37,680
Speaker 1: how's the quarter going? They literally said, I'm sorry, I've

424
00:24:37,720 --> 00:24:43,160
Speaker 1: been instructed not to answer any of those questions from you. Okay,

425
00:24:43,400 --> 00:24:46,000
Speaker 1: well i'll be chairman in four and a half months

426
00:24:46,040 --> 00:24:49,240
Speaker 1: and I'll find out everything then. So I waited, and

427
00:24:49,320 --> 00:24:53,800
Speaker 1: of course it was significantly worse than what anybody had

428
00:24:54,200 --> 00:24:57,920
Speaker 1: thought internally or externally. And it's one of the things

429
00:24:58,000 --> 00:25:00,639
Speaker 1: that you know, getting back to this point on success planning,

430
00:25:01,119 --> 00:25:03,719
Speaker 1: Jack Welch at the end of the day, his twenty

431
00:25:03,840 --> 00:25:08,000
Speaker 1: years were an amazing run, and I thought, jeez, you

432
00:25:08,080 --> 00:25:11,320
Speaker 1: know what was different is he was able to figure

433
00:25:11,359 --> 00:25:14,240
Speaker 1: it out. Whatever it was, however the future unfolded, he

434
00:25:14,400 --> 00:25:17,160
Speaker 1: was able to figure it out. And then I looked

435
00:25:17,160 --> 00:25:18,760
Speaker 1: at it said, well, you know, I kind of ran

436
00:25:18,840 --> 00:25:20,959
Speaker 1: into the same thing. What I ran into it any Well.

437
00:25:20,960 --> 00:25:22,680
Speaker 1: It was a lot different than what I'd been told

438
00:25:22,760 --> 00:25:26,200
Speaker 1: and people externally thought. But I was able to figure

439
00:25:26,240 --> 00:25:28,840
Speaker 1: it out and it became one of the kind of

440
00:25:28,920 --> 00:25:33,560
Speaker 1: big things I looked for in a successor. Was not

441
00:25:33,720 --> 00:25:36,479
Speaker 1: trying to predict the future because six months ago, who

442
00:25:36,520 --> 00:25:38,480
Speaker 1: would have predicted that we are where we are now?

443
00:25:38,960 --> 00:25:42,720
Speaker 1: You just don't know, but rather can you find somebody

444
00:25:42,800 --> 00:25:45,360
Speaker 1: who can figure it out? Well, it's interesting I've heard

445
00:25:45,400 --> 00:25:48,080
Speaker 1: people say, and I probably more in that camp, as

446
00:25:48,440 --> 00:25:52,960
Speaker 1: you actually can't plan for the future. Plans don't come true.

447
00:25:53,400 --> 00:25:55,880
Speaker 1: They just reduce your anxiety because you think you can,

448
00:25:56,440 --> 00:25:58,400
Speaker 1: you know, just to put it in perspective for people

449
00:25:58,480 --> 00:26:00,879
Speaker 1: to you know, before you arrived, Anywell was supposed to

450
00:26:00,880 --> 00:26:03,840
Speaker 1: be acquired by GE, and I think the government in

451
00:26:03,960 --> 00:26:07,680
Speaker 1: Europe called it off and it seems like Honeywell was

452
00:26:07,880 --> 00:26:10,879
Speaker 1: not prepared to continue to run as an independent company.

453
00:26:11,000 --> 00:26:13,000
Speaker 1: It was that what you were dealing with in terms

454
00:26:13,040 --> 00:26:15,560
Speaker 1: of the back story there to your point, the EU

455
00:26:15,800 --> 00:26:20,920
Speaker 1: put conditions on the GE refused to comply with, so

456
00:26:21,080 --> 00:26:25,240
Speaker 1: the deal fell apart. Then Honeywell sued GE for failure

457
00:26:25,280 --> 00:26:27,879
Speaker 1: to close the deal, and there was a small settlement,

458
00:26:28,880 --> 00:26:31,960
Speaker 1: and in the end, by the way, both Ge and

459
00:26:32,080 --> 00:26:35,280
Speaker 1: Honeywell took it to the European Court in the Hague

460
00:26:36,080 --> 00:26:41,960
Speaker 1: and they agreed that the EU had overstepped in their

461
00:26:42,119 --> 00:26:45,800
Speaker 1: compliance request. So it's a little piece of the story

462
00:26:45,880 --> 00:26:49,760
Speaker 1: that ends up getting lost. But yeah, there's that definitely

463
00:26:49,880 --> 00:26:53,160
Speaker 1: ended up happening. And the Ge folks were pretty much

464
00:26:53,240 --> 00:26:57,800
Speaker 1: running the company, and there were whole organizations that had

465
00:26:57,840 --> 00:27:00,480
Speaker 1: been told, look, you're gonna be restruct cheered out of

466
00:27:00,520 --> 00:27:02,920
Speaker 1: a job, so you ought to be looking now and

467
00:27:03,000 --> 00:27:05,639
Speaker 1: if you can find a job, take it. So we

468
00:27:05,760 --> 00:27:09,240
Speaker 1: had something like a third of our leadership positions were empty.

469
00:27:09,760 --> 00:27:13,159
Speaker 1: Hell of a beginning. It ended well. It was a

470
00:27:13,240 --> 00:27:16,800
Speaker 1: lot messier than people ever thought about, and I developed

471
00:27:16,840 --> 00:27:19,080
Speaker 1: some of that in the book. Let's talk a second

472
00:27:19,119 --> 00:27:21,560
Speaker 1: about company culture. You mentioned it earlier, and we were

473
00:27:21,560 --> 00:27:24,280
Speaker 1: talking about this downturn. You know, some people call it

474
00:27:24,400 --> 00:27:26,959
Speaker 1: the operating system of a company. If it's not right now,

475
00:27:27,040 --> 00:27:29,119
Speaker 1: the programs are going to work. Well, how do you

476
00:27:29,280 --> 00:27:32,560
Speaker 1: think about company culture and how do you develop it? Yeah,

477
00:27:32,920 --> 00:27:36,840
Speaker 1: I gotta completely agree on how important it is. And

478
00:27:37,800 --> 00:27:41,120
Speaker 1: I realized we had warring cultures because we had the legacy,

479
00:27:41,160 --> 00:27:45,120
Speaker 1: Allied Signal Legacy, Pitway legacy, honeywell, all the different views

480
00:27:45,160 --> 00:27:48,280
Speaker 1: on how the world ought to work. So the first

481
00:27:48,320 --> 00:27:50,960
Speaker 1: thing we did is said, okay, we need to focus

482
00:27:51,040 --> 00:27:54,360
Speaker 1: on something outside of ourselves. So we chose the customer,

483
00:27:55,200 --> 00:27:58,680
Speaker 1: and so let's make all our arguments consistent with what's

484
00:27:58,760 --> 00:28:01,880
Speaker 1: best for the customer. If we did that, then maybe

485
00:28:01,920 --> 00:28:04,080
Speaker 1: that would take a lot of the emotion out of it.

486
00:28:05,080 --> 00:28:10,080
Speaker 1: The second one was to develop twelve behaviors that said, Okay,

487
00:28:10,160 --> 00:28:12,840
Speaker 1: here's what we want our culture to be. And I

488
00:28:12,920 --> 00:28:15,200
Speaker 1: did that with my staff and I remember one of

489
00:28:15,280 --> 00:28:18,480
Speaker 1: my staff members saying, Dave, why are we spending all

490
00:28:18,560 --> 00:28:21,119
Speaker 1: this time on behaviors when we have all these strategic

491
00:28:21,240 --> 00:28:24,720
Speaker 1: issues we need to address. And my comment to them was, look,

492
00:28:24,760 --> 00:28:28,359
Speaker 1: I can make all the strategic decisions you want, but

493
00:28:28,480 --> 00:28:31,520
Speaker 1: if nobody does them, it really isn't going to make

494
00:28:31,560 --> 00:28:35,359
Speaker 1: a difference. Will feel better because we've made some decisions,

495
00:28:35,480 --> 00:28:38,480
Speaker 1: but nothing's going to happen. And what we need is

496
00:28:38,520 --> 00:28:42,080
Speaker 1: a culture where after decisions are made, something happens. The

497
00:28:42,440 --> 00:28:46,080
Speaker 1: thing that people like is to be part of something

498
00:28:46,200 --> 00:28:50,400
Speaker 1: bigger than themselves that's successful, and if we can do that,

499
00:28:51,480 --> 00:28:55,160
Speaker 1: people will feel good if they can see that their job,

500
00:28:55,400 --> 00:28:58,520
Speaker 1: the thing that they're doing every day, makes a difference.

501
00:28:59,240 --> 00:29:02,560
Speaker 1: That's the sort of thing that Bill's morale and I

502
00:29:02,680 --> 00:29:05,360
Speaker 1: spent a lot of time talking about it, a lot

503
00:29:05,440 --> 00:29:08,920
Speaker 1: of time implementing it. Honey Well operating system, which was

504
00:29:09,920 --> 00:29:13,000
Speaker 1: very consistent with our culture, managed to touch half our

505
00:29:13,120 --> 00:29:17,200
Speaker 1: people as a way of motivating them creating more fulfilling work,

506
00:29:18,080 --> 00:29:20,880
Speaker 1: and that that culture does make a difference. I'm a

507
00:29:21,040 --> 00:29:24,360
Speaker 1: very big believer in it. You did something very few

508
00:29:24,520 --> 00:29:29,760
Speaker 1: CEOs do. You left at the peak. You couldn't have

509
00:29:29,880 --> 00:29:35,840
Speaker 1: been more successful, more powerful, more applauded, and talk a

510
00:29:35,960 --> 00:29:39,240
Speaker 1: little bit about how you came to that decision. I

511
00:29:39,360 --> 00:29:43,840
Speaker 1: did love my job. I love doing it. It was

512
00:29:43,920 --> 00:29:45,880
Speaker 1: a labor love for me, and I loved working at

513
00:29:46,040 --> 00:29:49,680
Speaker 1: Honeywell and the people and what we accomplished there. But

514
00:29:49,760 --> 00:29:52,280
Speaker 1: I had a couple of things that I thought were important.

515
00:29:52,680 --> 00:29:57,840
Speaker 1: The first one was I really wanted ten years after

516
00:29:58,000 --> 00:30:01,520
Speaker 1: I left for people to say, wow, that Honeywell is

517
00:30:01,600 --> 00:30:06,880
Speaker 1: a great company. It just keeps delivering. Those guys keep performing.

518
00:30:08,120 --> 00:30:12,200
Speaker 1: And while I had I thought good people, good process,

519
00:30:12,720 --> 00:30:16,160
Speaker 1: good portfolio, I also thought it was gonna be really

520
00:30:16,240 --> 00:30:21,680
Speaker 1: important to pick the right CEO, and that's why I

521
00:30:21,720 --> 00:30:24,960
Speaker 1: put as much attention into it as I did. If

522
00:30:25,040 --> 00:30:30,320
Speaker 1: you have really good potential successors, they're not going to

523
00:30:30,440 --> 00:30:33,960
Speaker 1: sit in a job for five years waiting to see

524
00:30:34,200 --> 00:30:36,960
Speaker 1: if they're going to get the job or not. Because

525
00:30:37,400 --> 00:30:40,920
Speaker 1: recruiters are knocking on their door constantly. You need to

526
00:30:41,000 --> 00:30:44,080
Speaker 1: be able to create a tighter timeline so that you're

527
00:30:44,320 --> 00:30:47,240
Speaker 1: good people are gonna stick with you to see what

528
00:30:47,360 --> 00:30:51,120
Speaker 1: the decision is. The other piece of it was I

529
00:30:51,280 --> 00:30:55,840
Speaker 1: knew two thousand sixteen was going to be our toughest

530
00:30:56,000 --> 00:31:01,800
Speaker 1: year because we'd want piles of aerospace contracts and it

531
00:31:01,920 --> 00:31:04,880
Speaker 1: required a lot of what we call concessions. And I

532
00:31:04,960 --> 00:31:07,680
Speaker 1: had changed the bookkeeping, no longer put it on the

533
00:31:07,760 --> 00:31:10,880
Speaker 1: balance sheet and instead expense all that stuff, and a

534
00:31:10,960 --> 00:31:13,760
Speaker 1: bunch of those expenses were coming in two thousand sixteen,

535
00:31:14,560 --> 00:31:16,959
Speaker 1: and then I knew two thousand seventeen onward, we're going

536
00:31:17,000 --> 00:31:20,280
Speaker 1: to be better. And I thought, okay, better for me

537
00:31:20,440 --> 00:31:24,040
Speaker 1: to take that year so that the tougher year is

538
00:31:24,200 --> 00:31:28,560
Speaker 1: on me and my reputation can stand it, and then

539
00:31:28,640 --> 00:31:32,320
Speaker 1: for my successor to take it from that point forward,

540
00:31:32,560 --> 00:31:35,880
Speaker 1: where there's a little bit more of a tailwind. So

541
00:31:36,000 --> 00:31:38,000
Speaker 1: I put all those together and said, Okay, this is

542
00:31:38,040 --> 00:31:40,640
Speaker 1: gonna be the right time to go if I really

543
00:31:40,840 --> 00:31:44,600
Speaker 1: want ten years from now people to look back and go, man,

544
00:31:44,720 --> 00:31:47,200
Speaker 1: that Honeywell is a great company. Well, it looks like

545
00:31:47,320 --> 00:31:49,920
Speaker 1: you're on that path and you handled it very well.

546
00:31:50,600 --> 00:31:53,000
Speaker 1: You've got a book coming out. Why did you do

547
00:31:53,120 --> 00:31:55,320
Speaker 1: a book? What do you want people to take away

548
00:31:55,400 --> 00:31:57,760
Speaker 1: from your book? What I really wanted to do is

549
00:31:58,000 --> 00:32:01,920
Speaker 1: kind of my joke about business books is that just

550
00:32:02,040 --> 00:32:04,400
Speaker 1: about every business book I've read would have made a

551
00:32:04,440 --> 00:32:09,600
Speaker 1: great pamphlet that there's ten pages of important concept and

552
00:32:09,680 --> 00:32:12,680
Speaker 1: then to fifty pages of stories to support it that

553
00:32:12,760 --> 00:32:16,120
Speaker 1: you can fly right through. And I said, I wanted

554
00:32:16,240 --> 00:32:21,840
Speaker 1: something where at least every other page had something fought provoking,

555
00:32:22,000 --> 00:32:25,160
Speaker 1: where someone would say, oh, that's an idea I could

556
00:32:25,240 --> 00:32:28,760
Speaker 1: use that, or I could do this over here are jeez,

557
00:32:28,800 --> 00:32:32,280
Speaker 1: maybe I should modify how I'm doing something. So I

558
00:32:32,360 --> 00:32:37,120
Speaker 1: wanted to write something that was just very meaty, very substantive.

559
00:32:38,000 --> 00:32:41,440
Speaker 1: And one of the things that has bothered me is

560
00:32:41,480 --> 00:32:45,000
Speaker 1: all this discussion of short termism. It always comes across

561
00:32:45,360 --> 00:32:50,280
Speaker 1: like you're either short term focused or your long term focused.

562
00:32:50,520 --> 00:32:55,200
Speaker 1: It's mutually exclusive, and the way we ran hunting well

563
00:32:55,880 --> 00:32:59,840
Speaker 1: was that. I always said success comes from a comp

564
00:33:00,000 --> 00:33:04,440
Speaker 1: wishing two seemingly conflicting things at the same time. And

565
00:33:04,560 --> 00:33:08,600
Speaker 1: it's simplistic when people say I'm either short term focused

566
00:33:08,680 --> 00:33:10,640
Speaker 1: or I'm long term focused. You have to find a

567
00:33:10,680 --> 00:33:17,760
Speaker 1: way to do both. So how do you accomplish both?

568
00:33:18,200 --> 00:33:22,800
Speaker 1: So let's jump to you again. If someone listening to

569
00:33:22,920 --> 00:33:26,680
Speaker 1: this episode I would like a career like you've had,

570
00:33:27,480 --> 00:33:29,480
Speaker 1: is there one piece of advice you could give them

571
00:33:29,840 --> 00:33:32,760
Speaker 1: that puts them on that track. I guess everybody's going

572
00:33:32,800 --> 00:33:36,760
Speaker 1: to be different because capability is different. I might have

573
00:33:36,840 --> 00:33:40,040
Speaker 1: really wanted to be Hussain Bolt in the hundred meter dash.

574
00:33:40,480 --> 00:33:42,720
Speaker 1: I don't care how good my attitude was. I'd have

575
00:33:42,800 --> 00:33:45,960
Speaker 1: still been at the fifty meter market when he was finishing.

576
00:33:46,520 --> 00:33:51,640
Speaker 1: It wasn't going to happen. So make sure you're working

577
00:33:51,720 --> 00:33:55,440
Speaker 1: on the right thing. Hard work doesn't always pay off,

578
00:33:56,080 --> 00:33:59,720
Speaker 1: so make sure whatever you're working on is consistent with

579
00:34:00,160 --> 00:34:04,760
Speaker 1: your capability. Is the second piece I guess i'd add

580
00:34:04,920 --> 00:34:09,640
Speaker 1: is I always said advancement requires two things. Performance You've

581
00:34:09,680 --> 00:34:11,239
Speaker 1: got to be able to get results and get them

582
00:34:11,280 --> 00:34:16,480
Speaker 1: in the right way, and visibility, and visibility cuts both ways.

583
00:34:16,719 --> 00:34:20,359
Speaker 1: If you do a great job and it's visible, then

584
00:34:20,680 --> 00:34:25,040
Speaker 1: you'll do great. If you fail, well, that's also going

585
00:34:25,080 --> 00:34:28,600
Speaker 1: to be pretty visible. And I can't help. But I

586
00:34:28,640 --> 00:34:30,640
Speaker 1: guess I got to add a third piece. If you

587
00:34:30,760 --> 00:34:34,120
Speaker 1: are going to get ahead, it's important to be self

588
00:34:34,200 --> 00:34:38,560
Speaker 1: aware and to be a learner, and that all of

589
00:34:38,680 --> 00:34:44,120
Speaker 1: us have personal characteristics that are issues to our advancement.

590
00:34:44,520 --> 00:34:47,040
Speaker 1: Only you can figure out what that is. You'll get

591
00:34:47,120 --> 00:34:50,240
Speaker 1: advice from other people and sometimes it will be correct,

592
00:34:50,320 --> 00:34:53,840
Speaker 1: sometimes it won't, but you really have to figure it

593
00:34:53,880 --> 00:34:57,160
Speaker 1: out for yourself. It took me until I was forty

594
00:34:57,239 --> 00:35:00,800
Speaker 1: years old to realize that when everybody said I tended

595
00:35:00,840 --> 00:35:04,880
Speaker 1: to be defensive, they were right. And I realized I

596
00:35:05,000 --> 00:35:08,720
Speaker 1: had to start thinking differently about how I handle things.

597
00:35:09,280 --> 00:35:11,480
Speaker 1: And it made me a better leader because I realized

598
00:35:11,520 --> 00:35:14,040
Speaker 1: that that's the kind of person I was, and I

599
00:35:14,160 --> 00:35:17,840
Speaker 1: needed to be able to control how I reacted to

600
00:35:17,960 --> 00:35:21,879
Speaker 1: things in a way that would yield better decisions. Say

601
00:35:21,880 --> 00:35:25,359
Speaker 1: if this has been a great conversation as we wrap up.

602
00:35:25,480 --> 00:35:29,239
Speaker 1: We always end every Math and Magic episode with a

603
00:35:29,400 --> 00:35:33,160
Speaker 1: shout out to those two key disciplines of marketing and business,

604
00:35:33,440 --> 00:35:37,359
Speaker 1: which is the analytics and the sheer creativity. You've seen

605
00:35:37,480 --> 00:35:40,399
Speaker 1: a lot of people. If you think about it, who

606
00:35:40,440 --> 00:35:42,160
Speaker 1: would you give the shout out to? They can be

607
00:35:42,239 --> 00:35:45,120
Speaker 1: a complete unknown, or they can be somebody in history

608
00:35:45,640 --> 00:35:49,680
Speaker 1: of the greatest analytical business person. You could think of

609
00:35:50,440 --> 00:35:54,200
Speaker 1: Bob Rubin, former Goldman Facts and Secretary of the Treasury.

610
00:35:54,280 --> 00:35:57,360
Speaker 1: But he wrote a book called In an Uncertain World,

611
00:35:58,800 --> 00:36:03,320
Speaker 1: and it really had an impact on me because he

612
00:36:03,520 --> 00:36:06,600
Speaker 1: talked about how we all look at issues and make

613
00:36:06,680 --> 00:36:10,400
Speaker 1: a decision and assume that we've made the right decision,

614
00:36:10,440 --> 00:36:13,400
Speaker 1: and we just kind of go forward. And his point

615
00:36:13,640 --> 00:36:19,560
Speaker 1: was in every decision where maybe maximizing the probability we

616
00:36:19,719 --> 00:36:23,080
Speaker 1: made the right decision, but we need to recognize that

617
00:36:23,840 --> 00:36:27,640
Speaker 1: there's uncertainty and everything and that there are other outcomes

618
00:36:27,680 --> 00:36:29,959
Speaker 1: that are possible. So how do you think about those

619
00:36:30,480 --> 00:36:33,160
Speaker 1: that had a real impact on me? The most creative

620
00:36:33,640 --> 00:36:35,600
Speaker 1: who would you give the shout out to? For the

621
00:36:35,680 --> 00:36:38,360
Speaker 1: magician just comes up with those great ideas out of nowhere.

622
00:36:40,760 --> 00:36:44,200
Speaker 1: How about Bernie maydon Oh, Okay, we're gonna give it

623
00:36:44,239 --> 00:36:46,120
Speaker 1: to him, but we're gonna put that on a side

624
00:36:46,120 --> 00:36:49,120
Speaker 1: in the box and uh not not reward him too.

625
00:36:49,239 --> 00:36:53,120
Speaker 1: Much he sold billions without anybody noticing. I has to

626
00:36:53,200 --> 00:36:56,320
Speaker 1: talk about a magician. Dave, thank you so much for

627
00:36:56,440 --> 00:36:59,200
Speaker 1: being here today, and good luck with the book, and

628
00:36:59,719 --> 00:37:02,759
Speaker 1: thank you for sharing these experiences and these insights and on.

629
00:37:02,880 --> 00:37:07,239
Speaker 1: It was fun. Bob says, here are a few things

630
00:37:07,280 --> 00:37:10,399
Speaker 1: I picked up in my conversation with Dave. One, think

631
00:37:10,400 --> 00:37:14,160
Speaker 1: about recovery during recession. Dave was in the driver's seat

632
00:37:14,200 --> 00:37:17,200
Speaker 1: at Honeywell during the last two big economic downturns, and

633
00:37:17,280 --> 00:37:20,160
Speaker 1: no matter how dire things got, he always thought about

634
00:37:20,200 --> 00:37:23,359
Speaker 1: the long term impact of his decisions. As Dave said,

635
00:37:23,440 --> 00:37:26,360
Speaker 1: thinking about your growth initiatives, investments, and how to maintain

636
00:37:26,440 --> 00:37:32,600
Speaker 1: your customers are crucial to accompany's longevity. To exercise independent thinking.

637
00:37:33,040 --> 00:37:36,279
Speaker 1: While it's important to gather everyone's facts and opinions, it's

638
00:37:36,280 --> 00:37:41,080
Speaker 1: imperative that leaders make independent decisions during difficult times, even

639
00:37:41,280 --> 00:37:44,640
Speaker 1: if it's not among the consensus. As Dave says, independent

640
00:37:44,719 --> 00:37:48,879
Speaker 1: thinking is a rare but important commodity. Three. Don't try

641
00:37:48,920 --> 00:37:51,520
Speaker 1: to be something you're not. As Dave recounted, he went

642
00:37:51,600 --> 00:37:53,840
Speaker 1: back to school because he knew he was good at it,

643
00:37:54,160 --> 00:37:56,960
Speaker 1: and that mindset carried with him throughout his career. He

644
00:37:57,120 --> 00:37:59,480
Speaker 1: always stuck to the path he felt most called to.

645
00:38:00,200 --> 00:38:02,560
Speaker 1: It's a lesson he learned early in life to always

646
00:38:02,640 --> 00:38:06,280
Speaker 1: trust what you're good at and for break the rules.

647
00:38:06,680 --> 00:38:09,719
Speaker 1: Sometimes enforcing the rules isn't always the right thing to do,

648
00:38:10,200 --> 00:38:12,680
Speaker 1: and because Dave dared to do so, he got a

649
00:38:12,760 --> 00:38:16,120
Speaker 1: second chance to attend college, which changed the course of

650
00:38:16,200 --> 00:38:58,560
Speaker 1: his life. Thanks for listening. I'm Bob Pittman. That's it

651
00:38:58,640 --> 00:39:01,520
Speaker 1: for today's episode. Thanks so much for listening to Math

652
00:39:01,640 --> 00:39:04,480
Speaker 1: and Magic, a production of I Heart Radio. This show

653
00:39:04,560 --> 00:39:07,760
Speaker 1: is hosted by Bob Pittman. Special thanks to Sue Schillinger

654
00:39:07,840 --> 00:39:10,200
Speaker 1: for booking and wrangling our wonderful talent, which is no

655
00:39:10,440 --> 00:39:14,279
Speaker 1: small feat Nikki Etre for pulling research bill plaques, and

656
00:39:14,360 --> 00:39:17,640
Speaker 1: Michael Asar for their recording help, our editor Ryan Murdoch,

657
00:39:17,760 --> 00:39:21,320
Speaker 1: and of course Gayle Raoul, Eric Angel, Noel Mango and

658
00:39:21,440 --> 00:39:24,440
Speaker 1: everyone who helped bring this show to your ears. Until

659
00:39:24,520 --> 00:39:24,960
Speaker 1: next time,