From humble beginnings in a small French-Canadian enclave of New Hampshire, to growing Honeywell’s ailing market cap from$20B to $120B, David Cote has lived to tell a few tales. As the leader of a Fortune 100 industrial conglomerate, he was known for empowering his organization to simultaneously pursue long-term strategies and achieve quarterly targets. He recently joined OG100 for a fireside chat and lively Q&A. Read the highlights below.
THINKING INDEPENDENTLY VS. BEING SMART
The ability to think independently is much rarer than being smart. The best leaders acknowledge that problems will arise, and the best path to actual solutions, better results and success is to probe deeper to resolve them. There is no single best practice to solve a problem, but rather it’s a mindset of intellectual rigour and recognizing the importance of cultivating intellectual discipline. Also, have as many discussions as you can with as many different people from different walks of life. This helps you create a mosaic of information and solutions based on many different perspectives and gives you the benefit of looking at your current environment with a broader lens.
POST PANDEMIC TRADE
While protectionism has risen, there is also a growing bias towards free trade, as the US realizes the need to work closely with allies. In regard to China, the Biden administration has not overturned some of the previous mandates, but it has initiated a more comprehensive review on how to work and cooperate with China. Avoiding confrontation through alignment and cooperation will ultimately create overall growth and benefits.
ACQUISITIONS VS. ORGANIC GROWTH
In the end, it’s how you manage each process that will determine your results. As a big believer in both, David’s first priority is organic growth, since it has the biggest ROI. Organic growth has three levers: do better for your customers, invest heavily in technology and R&D to build a pipeline of new products and services, and focus your geographic growth. Larger acquisitions (>$50 million) required rigorous review at several stages during the entire process. David noted it was the smaller acquisitions that had the highest failure rate. Those that can easily fall off the radar, therefore, require careful management and personal commitment to the integration process in order to guarantee success.
