Successful leadership takes a lot of hard work in terms of learning and building relationships with the people in the organization. One such successful leader is David Cote. David learned the value of constant learning and being a situational leader to his teams from his decades of experience as a corporate executive in some of the biggest names in the business world. He currently serves as the Executive Chairman at Vertiv Holdings Co., a global data center, products, and services provider. David was also a former CEO for the industrial giant Honeywell and a holder of several key positions in General Electric, where he served for over twenty years. Here on the show with Dr. Diane Hamilton, he shares his journey from being a confused youngster to becoming the CEO of an industrial giant. As a bonus, the anecdotes of his time with the late Jack Welch at GE are a gem you surely don’t want to miss.
I’m glad you joined us because we have David Cote here. David was the CEO of Honeywell. Before that, he worked 25 years for GE. He has a new book titled, Winning Now Winning Later: How Companies Can Win in the Short Term While Investing in the Long Term. I’m looking forward to talking to David.
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Successful Leadership, Strategizing, And The Value Of Learning With David Cote
I am here with David Cote, who is the Executive Chairman at Vertiv Holdings, a global data center product, and service provider. Previously, he was CEO of the industrial giant Honeywell. He grew the company’s market capitalization from around $20 billion to nearly $120 billion, delivering returns of 800% and beating the S&P by nearly 2.5 times. He is the author of Winning Now Winning Later: How Companies Can Win in the Short Term While Investing in the Long Term. It’s nice to have you here, David.
It’s nice to be here. Thanks for that intro. That sounded pretty good.
For anybody who makes it to be the CEO of Honeywell, that’s a pretty interesting background. I’ve got to know how you got there. I saw that you took the GE path and a lot of other things along the way. Can you give me a little background on you?
First of all, I don’t think anybody would say that I was destined to be a CEO from the beginning. I grew up in an environment where there weren’t a lot of role models. I had a great mom and dad. I grew up in this small French-Canadian mill town enclave called Suncorp, New Hampshire. I spoke French before I spoke English as a kid to show the environment it was. I had a lot of ambition, but I didn’t have any direction and I had no money. I had great parents. I was the first to graduate from high school. My dad had six months and my mom had two days. She spent a year getting a secretarial degree, so she could get a job.
They were great at instilling values, but they would even say that they couldn’t give me a lot of advice beyond that once I started to get into high school and into college. I had a lot of ambition but no direction, so it took me six years to get through college. I quit twice because I hated school. I quit between my senior year in high school and got accepted to the University of New Hampshire. I quit that year, tried being a mechanic and carpenter. I quit another year and tried to become a commercial fisherman. I enlisted in the Navy at one point to be on a nuclear sub for six years and change my mind the day before I was supposed to swear in.
I was pretty confused about what the heck I wanted to do and where I was going. I had this epiphany when I was about 22. I had gotten married and we were living in this third floor, unheated uninsulated apartment in New Hampshire. As you might imagine, it gets chilly. In the first month of being married, my wife says she’s pregnant. I said, “How’s that possible if you take the pill?” I guess it is. In the fourth month, she said she couldn’t work anymore. I was working as an hourly employee in a GE factory on a punch press. I did the math and realized I was spending $2 a week more than I was making, after-tax. I had $100 in the bank. I had 50 weeks to figure out what to do. I realized the only thing I was good at was school. I better go back to school.
But you hated school.
I hated school and factory. I decided I better go back to school and I did. I did a heck of a lot better when I was motivated. I quit smoking, started exercising, still work nights, and went to school during the day. I always tell my oldest son, he’s the reason I’m successful because he scared the bejesus out of me. I kept thinking, “My kid is going to die because I’m a screw off.” I can remember bringing him home in February and having to tape up all the windows with masking tape so the breeze would stop coming in. I was afraid that that would make him ill also. I started applying myself to every job that I had. I said, “If I could do well, I can get promoted and get another job.” I graduated from college and after about a month, I managed to get an exempt job at GE so I could begin. I went through a training program, on their audit staff. I ended up spending 25 years at GE and finally becoming the leader of the major appliance business. I went to TRW for 2.5 years and became the CEO there. In 2002, I went to Honeywell.
There’s so much in there that was interesting.
I can only promise you it was confusing.
You hated school, but then you went back because you had to and you liked it better, which is interesting.
No. I didn’t like it better. I performed better.
That is a big difference. It’s funny because I don’t like to attend school that much either. I ended up with a PhD on top of that but I’d love to learn. Sometimes when you go to school, that whole going to school experience wasn’t my favorite. That’s why I love online education. As you’re talking about your experience with GE, I’ve worked with a couple of people who work with people at GE, when Jack Welch was there as we were. I don’t know if you’ve read my episode with Steve Kerr or Bob Daugherty but they both worked there at that time. You hear a lot of stories of what Jack Welch was and he already passed and how he had an idea of getting rid of the bottom 10% performers or whatever it was. Was it 10%?
It was something like that.
Did you ever worry about getting caught up in that? Were you ever close to getting cut? What do you think of that rule?
First of all, he fired me. I did go to his funeral because even though he fired me and I never did find out exactly why, other than that he didn’t care for whatever I was doing. We didn’t go into any detail of it but he was also instrumental in the advancement of my career. I felt that he had done a lot of good for my life. I wanted to go and I did. He fired me. I remember in June of ‘99, the HR guy said that Jack would like to have dinner with me. I went and the first words out of his mouth were, “I want you out of the company by year-end.” I said, “Okay. What did you see that you didn’t like or didn’t see that you wish you had?” He raised his voice and said, “You don’t understand. You need to be out by year-end.” I said, “I understand that. I’m a big boy, but I’m better than you think I am. If there’s something I need to change, I’d like to know what it is.” His voice got even higher. He said, “You don’t understand, you need to be out by year-end.” I finally said, “I give up. I understand,” and we talked about other stuff for the remaining hours.
We still finished dinner, but by the same token, early on, midway in my career, he provided significant advancement for me. I had this incident with him. I barely knew the guy and I was a lower mid-level finance guy. It was my responsibility to send out the strategic plan request to the company. They’re a bunch of templates people had to fill in and stuff. I had gone to my colleagues, peers and my boss at the time and said, “I don’t think we ought to do this because we don’t do anything with it and it’s a lot of work for everybody out there.” I was 100% voted down and had to do it, so I did. I sent it out.
In the meantime, my buddy who usually did Jack’s board pitch was away. I had to do Jack’s board pitch. I was getting a call from my secretary. I’m running around and she said, “Jack wants to talk to you.” I got my headset on. I was like, “What do I want to say when he asked about his pitch?” I think this is 1986. He gets on the phone and he says, “Dave, is it true that we asked the medical systems business for what ROI will be in the ultrasound business in 1989?” I’m standing there trying to feel where was this coming from? I finally said, “Yeah. We probably do it as part of the strategic plan request.” He came through the phone at me and started yelling and cursing at me.As a leader, it is important to be right at the end of the meeting, not at the beginning. Click To Tweet
He said he wanted to see it. I went back to my office and brought that request up to his office. The secretary brings it into them and all I hear is, “Dave, get in here.” I went in and he’s flipping through the pages pissing himself off and yelling at me at the same time. He was cursing volubly about how incompetent I am and how could I do such a stupid thing. I’m explaining it and the HR guy who used to run a business is there also. He turned to him and said, “Did you have to do this when you ran GEISCO?” He said, “No, I didn’t.” I said, “You did.” The HR guy said, “I ran that business, I should know.” I said, “It’s sitting in my file cabinet back in my office. I can get it if you’d like it. You guys definitely did it.”
Jack Welch continues yelling at me and tells me to leave. I went out and called home and said, “I’ve been fired. I’m not sure how this works, but that was a decidedly unpleasant experience. This is going to end.” Fast forward a couple of months, nothing’s happening and there’s a victory party for the RCA Acquisition which I’d been a small part of as a finance guy. I’m down there with my buddy and I hear Jack call across the room, “Dave, get over here.” I can’t believe it. The stories are true. He’s going to fire me at a party. I go walking over there with my buddy and thank God he’s smiling. He said, “I need to tell you. I was never so pissed at anybody since I was in plastics.” I said, “I appreciate you sharing it with me.” He thought that was funny and laughed.
My buddy looked over at him and said, “Jack, Dave never wanted to send out that request in the first place. We all voted against them and said he had to do it.” I’ll always remember that he turned to me with this look of surprise on his face. He took his fist and put it into his side and said, “You took the knife for those guys?” I said, “I didn’t think about it that way. You don’t turn in your friends on something like that. It’s not illegal or anything.” He kept shaking his head and saying, “That’s something.” I walked away with my buddy and I said, “That was nice for you to do. I appreciate it.” He said, “Just so we’re clear, if he hadn’t been in a good mood, I wouldn’t have told him.” The upshot of it is the CFO of the company pulled me aside, later in the night, said, “You have no idea how much good you’ve done yourself with this whole thing.” I said, “I’m hard-pressed to understand how because it sure hasn’t felt that way.”
He said, “No. The way he treated you in his office, he’s made vice president’s cry. He was amazed at how you were respectful but kept making your point no matter how angry he got. When you found out tonight that you didn’t turn in your buddies, something good is going to happen to you.” I said, “I look forward to it.” It did. In the company, if you got levels, they were a big deal. If you got a one level jump, you were doing well. If you got a two-level job, you’re on fire and have high potential. All of a sudden, he had me interviewing for jobs that were 3 or 4 levels high. I got one of the three-level jobs. My career wouldn’t have advanced within GE like it did if I hadn’t had that incident with him. That’s what I said it was a complicated relationship. He advanced my career, but he fired me too.
What’s interesting is I’ve talked to a couple of people about him because they worked with him. I don’t do well with people who don’t show me respect. It doesn’t sound like he showed a lot of respect, but he gets so much credit for so many things. Do you think his quality of how he treated people would fly in today’s society or you think it was the timing?
He was a pretty unique guy. My guess is he could have adapted just fine. If he wanted you to like him, he was the most charming person in the world. There’s no way you were going to resist how charming he could be. By the same token, he could be extraordinarily difficult and unreasonable in ways that didn’t even make sense. He was a different person but he’d have been successful in today’s environment. He’d found a way and adapted. He was that guy. I had enormous respect for what he did at GE.
I know you said you learned the need for results from him and you’ve learned a lot of things from a lot of your positions. I was watching a few of your videos of different things you’d said and somebody had asked you about him. You also said that you think there’s a lot that happens throughout the meeting, that you get the decisions at the end of the meeting, and there are certain questions you need to address in each meeting. I love that since I’m an expert in the area of curiosity, and you’re asking a lot of questions. What are the questions we need to ask in the meeting? Who should be asking them?
I didn’t make up this phrase, but I’ve always liked it. It’s situational leadership. I always think to myself, “What persona do I want to have in a particular meeting?” Sometimes I might need to be angry. Sometimes it was trying to figure something out. Sometimes it was trying to determine if somebody else knew what they were doing. You don’t want your personas from one meeting to get dragged into the next one. If you’re angry with a certain group, you can’t carry that into the next meeting where maybe there’s no reason to be angry because you’ll make dumb decisions.
The phrase you’ve heard me use a lot is, “As a leader, it’s important to be at the end of the meeting, not at the beginning of the meeting.” That’s when you’re trying to figure something out or you think something ought to happen based on what you know. I stumbled onto that I should add because the way I came across it was, when I first got the Honeywell, I couldn’t trust my board and my staff. Three of whom interviewed me for my job. It was pretty unpleasant. The company was in a huge amount of trouble, even worse internally that it looked externally. I couldn’t trust people. I found myself if I ever said anything, a third, “Sure, I’ll go with.” A third, “Nope, I’m against it because it’s you.” A third, “I didn’t want to think. I just wanted an answer.” I found myself being a little coy in the meeting and not letting people know what I was thinking. I worked on drawing everybody out and making sure that everybody spoke. Everybody who was in the meeting, introvert or extrovert, I made sure that they participated and told me what they thought.
I took it a little further when at the end of each meeting before I made a decision, I would start with the most junior person in the room. I would say, “What do you think I ought to do?” It’s funny because the first thing they do is look at their boss. What does the boss do? He goes to answer. I would always stop them and say, “No. I want to know what this person thinks.” I would go around the table from the most junior to the most senior going back and forth with the same question. “What do you think I ought to do?” When I got to the end, I knew I finally had all the facts and opinions. I could make a decision and I would explain it because if you disagree with what someone else said, there’s a tendency for them to think, “You weren’t listening because you didn’t agree.”
I always said that agreeing and listening are two different things. I would make a point in explaining my decision to say, “Here’s why I’ve made the decision I have. I understand your point. Here’s why I disagree with it or that this overshadows it.” As a result of that, over time, you found much better meetings. Everybody knew they’d be expected to participate. They all had to come in thinking because they knew I would ask them, “What do you think?” As a result of that, I was making better decisions. I stumbled on it, but I found it incredibly effective.
I can see that would be a huge tactic. When I train companies to improve curiosity, the reason a lot of people aren’t speaking in meetings is, the culture comes from the top. If the leaders think that they’re helping people to be curious, but a lot of them don’t do what you did. Ask them questions, don’t freak out over answers and all the things to show that maybe you don’t know all the answers. That can make a big difference because people have a fear of looking dumb. They make assumptions that they shouldn’t say or should say something and stay out of it or whatever it is that we tell ourselves.
I like how you talk about what happens at the end of the meetings. What you get out of the end after you’ve gone through all of this. As people get that sense that you’re listening, and even if you don’t agree. It ties into the work I do with perception. I’m curious about what you think of how people perceive the same situations, even within the same organization? How can we get people to recognize that it’s not necessarily a right or wrong decision? We have to come up with something on some agreement that we listened and we met in the middle somewhere.
The only thing I could say is it takes practice and people need to see it. I want to hear from everybody. You’re going to have the more introverted types who you’re still going to have to call on to get them to speak up. You’re going to have others who have a natural fear of either being embarrassed, wrong, or suggesting something different than what the boss decides. It takes time for people to get comfortable with that and practice is the only thing that does it. That means learning to make sure you call on people. If somebody was talking, I’d look around for facial expressions and body movements because you can sometimes tell if somebody disagrees but they’re not going to speak up.
The more you do it, the easier it gets for people. You end up with a much richer discussion and I could say, in many years, it was easier than it was in the beginning. I had to be careful, though of a different dynamic because once you start to become pretty successful in things, people start to think, “Dave does know the answer.” There’s a tendency to defer a little too much. It’s not because they’re afraid or anything else but because you’ve established a pretty good track record. The thing I always try to keep in mind and reason I had a good track record because I generally made good decisions and I followed this process to make sure I knew what people were thinking and what was going on out there.
That’s so important. Going back to your Jack Welch examples of how he would overreact and yell. That, to me, inhibits curiosity and makes people not want to give any input but yet he was successful. How do you put those together?
I don’t think that persona was always the most helpful. He did a good job of trying to get at the facts of the situation. He did it differently than I would. The approach I outlined could be more successful generally but at the end of the day, he was oftentimes trying to do the same thing. What are the facts here? What exactly is going on?
You ended up getting both long and short-term good results when you were at Honeywell. Is that what led to your wanting to write this book?If you don’t focus on the short-term and the long-term at the same time, you’re going to end up failing at both. Click To Tweet
There’s a couple of things. One of the things that I’ve said for a long time about business books is, “Most business books would be great pamphlets.” It’s ten pages of useful and thoughtful concepts and 250 pages of stories that say the same thing so you can fly through it. I always thought that there’s more to this and more to good leadership and running an organization than a one-point concept. It’s broader and more multifaceted than that. I wanted to write something where every page and every other page had something that would cause the reader to think and say, “Is this something I should do?” “Do I do this today?” “Is this something I do now or do later?” I want people to think.
When I first wrote it, the title was Leadership Matters because it does a lot in it in a way that gets short shrift sometimes nowadays. That combined with a discussion that was going on out there still is about how everybody is too short-term oriented. They make it sound like it’s a choice. You are either a short-term focus company or you are a long-term focus company like it’s mutually exclusive. I thought that’s wrong because the way we ran Honeywell was based on a simple concept, but one everybody was able to repeat after a while. Success comes from accomplishing two seemingly conflicting things at the same time. A bunch of examples, do you want low inventory or do you want great customer delivery? Do you want high prices and margin rates or do you want big volumes? Do you want people closest to the action empowered or do you want to have great control nothing bad happens?
Are you looking for a point of equilibrium? Is that what you’re saying?
What I’m saying is you have to figure out how to accomplish both. Some people would talk about it. Some would say that it’s a balance. I would argue it’s finding a root cause that says, “How do I accomplish both?” It’s the same with the short-term and long-term. How do you accomplish both at the same time?
Can you define what’s long-term and short-term for those who aren’t sure what we mean?
It means making your numbers or commitments for the quarter or the year.
A year would be short-term.
Yes. While also doing what I refer to as the seed planting, where some of these plants come up a few years from now, but you’re doing a lot of that seed planting that will cause you to perform well in the future. I used to get asked by analysts when we were in the middle of an industrial recession in the 2015 to 2016 timeframe. They’d say, “Why are you guys doing so well when none of your peers are?” I would say the same thing. I’d say, “It has less to do with what I’m doing now than what I was doing 3 to 5 years ago. All those things are coming up.” You have to do both because if you don’t focus on doing both, eventually, you’re going to fail at both.
It’s interesting. I’ve done a lot of foresight courses where we deal with being proactive. We used Covey’s books a lot. A lot of that can be important in leadership, but we’re in the middle of the Coronavirus issue. A lot of leaders are having a little bit of a challenge planning because everything they thought they knew maybe has changed a little bit. How is this impacting the long and the short-term plans that they should be making?
It should change their long-term plans that much. It’s not to say it won’t, because a number of them will start to cut things that they should still be doing in order to support their long-term growth. When you’re in the middle of a crisis, it’s easy to forget that almost all crises do end. Life resumes despite all the naysayers who talk about how this is the Armageddon of business again. They forget that it will end. The things you’re doing to prepare for recovery, you need to make sure that you’re thinking about that. That means continuing those growth programs at the same time you’re figuring out how to survive in the short-term. Both of those have to happen. We did it in the great recession and we’re doing it at Vertiv. I could promise you the Honeywell people under my successor, Darius Adamczyk, who I thank the world of is doing the same thing.
What is Vertiv exactly? I know it’s Vertiv Holdings but can you describe what you do there?
We make products and provide services for data centers. It’s something that’s in big demand with all the working from home. Think of the 100,000 square foot data center. They run hot. You’ve got to keep them cool. We make the thermal management systems. It’s got to have consistent, reliable power. We make the uninterruptible power supplies. All those servers, if you’ve ever seen a data center, they’re sitting in these racks which are quite sophisticated. We make those. Increasingly, you see us focused on what’s referred to as the edge.
It’s a computer cloud, you mean?
No. It still uses the cloud. Think of it this way, everybody thinks data centers are going to all be 100,000 square feet and in the north of Finland so they can run cold but you run into a latency problem. Electrons travel at a fixed speed, so that little wheel keeps turning as you’re waiting for a response for it to get to Finland process and come back. If you’re in Walmart, in the coffee aisle, and they want to send you a $0.50 off coffee coupon and by the time it goes to Finland and back here in the fish aisle, you’re probably not going to go back and buy coffee. Instead of these 100,000 square foot data centers, they’re going to need to be augmented by having computing power closer to the action. They’re 2 or 10 square foot data centers in a store. Autonomous vehicles are going to need the same thing and 5G, so developing those edge devices is also going to be important for us. You could tell I’m pretty psyched about this whole thing.
I’ve worked with a company here in Arizona, RadiusAI and I know they talked about this quite a bit when we’re in board meetings and different things. I’m on their advisory board here. It’s interesting how it’s all going. As you’re talking about this and you said, you went back to school, did you go back to get an engineering degree? What did you end up with as your degree? I’m curious.
I told you I was lazy and a screw off so I ended up going through and rejecting everything until the only thing that was left that I thought could be useful was a business degree. I got an undergraduate business degree. Engineering looks too hard. Those guys had to study too much. I didn’t want to have to do any labs. I figured that I could see how liberal arts was going to help me get a job. I can remember when they were telling me I was going to be kicked off campus and asking me if I like to be at school. I said, “No, the only reason I’m here is to get a job.” If I could get a good job without going to school, believe me, I would do it. Which, as you might imagine, it didn’t endear me to them at the time.
Probably not but you like to learn so much. Was it the school experience you didn’t like? To understand the edge, inside the clouds, and all the things that you have done to run Honeywell, you have to know a lot of this intense knowledge. How did you get that knowledge?
You use an important word at the beginning and that’s curiosity, especially if you’re going to be in a job for a long time. If you don’t have an intense curiosity about everything, how things work, and not only the mechanics, electronics, and things, but how things work in an organization to get things done, the performance isn’t going to be there over a period of time. I read a lot. I read everything and get accused sometimes of reading too much. I like learning about stuff. I didn’t like doing it in school, where I spent most of my time on subjects going, “When the hell am I ever going to use this?” I didn’t use much of it. A lot more of the stuff I learned on my own that I did the stuff I learned at school.With fewer leaders, things get done faster and more easily. Click To Tweet
It’s interesting because I’ve taught probably far more than 1,000 courses online in different business realms. The thing that comes up a lot when we talk about education is what the future is going to be if they’ll be degrees, certificate programs, or microlearning. The thing is, I love it when people are curious because they read about a lot of different things. If you get rid of some of these programs, you might get rid of some of the glue-like humanities and soft skill types of things where you’re learning different things. What do you see would make a successful leader for the future in terms of education?
I might say first, one of the things that concern me in the US is the education system as we have it. I often do describe it as a system developed by elitists for whom the system worked. They don’t look at it in terms of how kids learn. Everybody’s different. If things could be taught in a way that someone would be able to look at and go, “This is relevant to me,” and this idea that everybody has to go to at least Community College because college is how you get somewhere. Instead, if we looked at even high school education, and said, “Not everybody wants to go to college.” Don’t track them so they can never change their mind after they’re thirteen. If there’s somebody who thinks math is boring and learning formulas and word problems, make no sense.
If they say, “I want to be a carpenter. I’d like to know how to build a house.” If you could teach them math in a way that said, “Here’s how you build a house. If you’re trying to build a set of stairs, the math can be a little bit complicated so you need to learn this stuff.” You’d find kids a lot more interested, especially boys once that testosterone boost hits, learning isn’t exactly top of mind for you. I could say that with some certainty. We could do a much better job of tailoring learning to how particular kids learn, instead of saying, “This is the system, this is the way it is and that’s all there is to it.” I’d also like to see things change in terms of teachers’ comp. I made the mistake of going on to the local school board at one point and elected office. I said, “I’d only join if I ran unopposed and didn’t have to ask a single person for a vote.”
It shows you how much in demand that office was but I was in there. Talk about people who are supposed to be dedicated to learning who don’t think there’s anything else for them to learn. I was astounded at the cement mindset that existed there and this whole idea of everybody needs to be paid the same. Nobody’s better than anyone else. It would affect the team if somebody got paid more. I used to say, “Chicago Bulls are doing pretty well. Do you think they all know Michael Jordan makes more money than they do?” They do. It’s an area that’s ripe for reinvention. We hope some of the online stuff that people are working on can start to do something about that. Get it more focused on how kids learn, be able to learn at their own pace and make it more interesting for them.
As you’re talking about this, it’s so true and I know that I’ve created courses for different MOOCs and things throughout the world. You try to make it to reach people in the way they want to be reached. Sir Ken Robinson had a great TEDx Talk about how education can kill creativity. As you were talking about what you were saying how we direct people it brought to mind Brave New World of how they play. You’re going to be this or you’re going to be that. That’s problematic for so many people. It closes up their opportunities. I love the idea of letting people explore a little bit.
Steve Jobs has been quoted so many times of why he took the calligraphy course and how it set him to make the Mac different because of the fonts and the things that came from that. You never know what exploration will discover. I love that. I do want to focus a little bit on some of the other topics that you covered in your book because you cover on a lot of things that don’t get covered quite often. You strongly caution companies against having too many leaders. I want to know what you mean by that. Are you saying too many levels or too many in general? Too many what?
Too many leaders. In 2002, Honeywell was considered by investors to be a lean company. We had 740 people that would be executive band and above. For us, that’s how we would define that these are our leaders. By the time I left in 2018, we were about twice the size of about 42 billion and we had 650 of those leaders. We double the size of the company and reduce the number of leaders by 90. I didn’t do it all at once. It was little by little and year by year. I gave everybody new numbers and they all knew that even while they were trying to get new initiatives launched, fund them and put a leader in charge that they had to be reducing the number of leaders elsewhere.
There are two reasons for that. One, if you’re going to have a leader in charge of something, they need an assistant then they need some staff so there’s a lot of costs that come with it but that’s the measurable and smallest cost. The big cost comes from the fact that if you create that position, have a leader, and you put somebody good in charge, which makes it even worse, they find good stuff to do that sounds good. As they’re doing it, it also involves other leaders. They don’t do this stuff in a vacuum. Other leaders have to devote time and attention to it. Before you know it, you’re spending all your time talking to each other, instead of focused externally, where the customer competition is and where the market is. I wanted people to focus outside, not inside. I found that with fewer leaders, things got done faster and easier. They didn’t get a lot of meddling going on. Everything became better.
There are many meetings in some of these organizations. I’d have a meeting and it would be about the next meeting. You’re like, “Why are they doing this?” It got crazy. If they asked me to be on a team, it’s almost like they wanted you to be on a team so you could say you’re on a team and give people things to do. If I was on the team, I could have got it done in five minutes but now that I’m on a team, it’s going to be three years. It’s crazy to me, but I worked in companies where they never been in any other industry. This is the only industry they’ve ever known. That’s the way it’s always been done there. It’s not only silos. It’s so much getting out of your industry and looking at what other things are happening out there sometimes, don’t you think?
I do and I could tell you a story about one of our businesses. This is not in the book, but it was true. They tended to be more of a long cycle bureaucratic business. Their whole industry tolerated and encouraged it. I remember talking to the leader there once and they were looking at realigning all the parking spaces. They had put a team in place to do the entire evaluation. It was going to take three months for the team to report out. He was telling me this and I forget how it came up in the conversation. I said, “Take one person and tell them they have it done by tomorrow and it’s done. Don’t do this.” It’s what happens if you’ve got the resources and the leaders to do it. You’ll spend the time doing that stuff.
A lot of the leaders I meet are trying to empower others to get to know things. They assign them to things. They have good intentions, but how can we teach people and empower them and yet not waste everybody’s time to fill positions that aren’t even necessary?
In any company that I’ve ever associated with, however many leaders we start with, we’re going to start working it down. There are few larger companies and I’d say that might even be true in smaller companies, where you don’t have enough leaders. In most cases, positions, I should say, because in general, you probably have too many. Figure out how to do it with fewer and put good people in there.
I worked for one of the large chemical companies in the world. I was a secretary for them. I did the job while I was going to school at night. I had all day to do my homework because there was nothing related to my job. I’m like, “This is a great job. I could do my homework.” I did nothing, literally. I felt like I did nothing. When I left, they took three people to replace me.
There’s a good example.
I’m like, “What in the world could these people be doing?” I saw a lot of the examples of the Peter Principle there where t people would get advanced. There are so many issues in leadership. It’s funny because when I got my degrees originally, they were in management. They’ve never even used the word leadership. I teach a lot of classes now where we’re talking about the difference between leaders and managers. Do you consider managers in your leadership category or is that a whole other subject to you?
There are a couple of ways to define that. I would say that one of the other benefits of having fewer leaders is, it’s tougher for a leader to blame someone else. There’s a lot less finger-pointing because there’s only one person who’s responsible for it, which is the better way to have it. I would say the difference between managers and leaders is, this isn’t by position. This is more of a characterization of a personality type. A manager tends to manage what they have. They don’t see how it could be different. They’re not going to stake out a bold new direction. They’re not going to figure out, “How do I make my numbers, so my boss is happy while still doing some of this new stuff for the future.” I’m going to be more excuse oriented about why something didn’t happen or why something new isn’t possible.
I view leaders differently. They can be in a small or big job, but those are the people who can envision a different future and a way to get there. It’s one thing to be visionary. It’s another thing to say, “I know how we’re going to get there. I’m not going to do it by trashing the place or destroying the business over the next three years in the hope I’m right. I’m going to figure out a way to do this.” That’s what I look for in a leader. That could be at any level. You could have 1,000 people. You can have ten but that’s what a leader is for me.
It goes back to what you were saying in your childhood. You said you had no role models. I was thinking that neither of my parents worked. I had no role models at all and they were both run all day long. Do you think that leaders are born or made? Where do you fall on that end of the spectrum?
I probably get an equivocal answer there because I’m a big believer. In school, one of the things I did learn is this nature versus nurture argument and which one is it. I can always remember saying, “It’s both.” You’ve got to be born with a certain ability. There’s no doubt in my mind. By the same token, it can be cultivated. You can cultivate it on your own or somebody can help you do it. It requires both. I’d like to think that I had something there already, but when I talk about my parents, for example, I think about the number of times my dad said, “Be a leader and not a follower.” Also, the number of times my mom would yell at me and tell me that I had to think for myself. It’s irritating as a kid to keep hearing that but it is true and certainly, it sticks with you. It’s both.
It is interesting. I agree with you. It’s somewhere in the middle. Even though neither of my parents worked we had to play school at the table every night at dinner. If you missed the question, you were a third of a hippopotamus or whatever until he became a whole hippopotamus or whatever until you became a whole hippopotamus if you missed three in a row. It instilled this desire to play and to question. You don’t know what experiences we give our kids that are a role model and inadvertently different ways. Having had two children or more, like anybody. I have two daughters. From day one, they’re different. You do have a bit of a personality from the beginning, so it’s all that happens from there.
If you have kids, you end up realizing they are born, differently. I don’t care what anybody says. They all have different personalities. I probably should add when I said I had no role models as a kid, I should have said, professional role models.
That’s what I should have said too for me. It’s the same thing.
I certainly had role models in my parents. I’ve been asked a lot of times, as you might imagine, during the course of my career, “Who is your leadership role model?” They all expect me to say Jack or something like that but I always say the same thing. It was my mom and dad. From the beginning, they instilled in all of us the right kinds of values and the importance of thinking for yourself. I’ve said to many people, “Independent thinking is a lot rarer than being smart.” There are plenty of smart people who can explain how the herd is thinking and how they think like the herd but that ability to see things differently, same facts, look at them differently or come to a different conclusion. That’s a lot of rarer and a lot more important.
I see that all fall into perception. The thing that you said about your parents reminds me of what Keith Krach said. He’s a friend and he’s been on the show. He was the CEO and Chairman of DocuSign, as you might remember. He credited his mom and his parents in so many things that he talks about. They as good leaders respect that, what they get from their backgrounds, who’s helped and where they’ve received a lot of input. I could see why you’ve been such a success. You’ve had such an interesting career. I’m excited about your book, Winning Now Winning Later. If somebody is interested in not only buying your book or hiring you to speak or whatever, is there some site that you want them to contact or follow you on social media? Would you like to share anything?
I’m on LinkedIn. It’s my first experimentation with social media, which I tried to stay away from my entire career because it looked more trouble than it was worth. Given what we’ve done with Vertiv and the book, I’m on there. There’s a HarperCollins site also. It’s a great way to reach out to me.
LinkedIn has grown so much since I got on it. It may be because I’m in your position where I have books and I have different things. To me, it has become much more useful and I’ve met some of the greatest people through it. I hope that a lot of people take advantage of connecting through it because there’s so much we can gain from some of these connections like this. It’s wonderful to have met you, David. I’m excited about your book and thank you so much for being on the show.
It was nice to have me. Thanks for making it such a fun interview.
It was fun. Thank you.
I’d like to thank Dave for being my guest. It was such a great show. We hit so many great guests on this show and if you’ve missed any past episodes, you can catch them at DrDianeHamilton.com. We are on all the radio stations listed on our site and pretty much wherever podcasts are. If you’ve missed something and you want to catch it on the site, that’s great. We’re getting close to 500 episodes. We might have even passed 500 episodes with this particular show, but there’s so much to learn on the site. I hope you take some time to explore it to find out more about curiosity as well. It’s all there. I hope you join us for the next episode.
- Winning Now Winning Later: How Companies Can Win in the Short Term While Investing in the Long Term
- Vertiv Holdings
- Steve Kerr – Previous Episode
- Bob Daugherty – Previous Episode
- Darius Adamczyk
- Sir Ken Robinson
- TEDx Talk – Do schools kill creativity?
- Brave New World
- Keith Krach – Previous Episode
- LinkedIn – David Cote
- HarperCollins – Winning Now Winning Later page
About David Cote
David Cote was the CEO of Honeywell and has a new book titled WINNING NOW, WINNING LATER: How Companies Can Win in the Short Term While Investing in the Long Term. Under Cote’s leadership, Honeywell’s market cap grew from $20 to $120 billion, delivering returns of 800 percent and beating the S&P by nearly two and a half times. They came out of the 2008 recession positioned for growth because of Cote’s dual short-and long-term approach. In WINNING NOW, WINNING LATER: How Companies Can Win in the Short Term While Investing in the Long Term, Cote rails against today’s trend of “short-termism” and debunks the notion that pursuing long term business growth must come at the expense of short-term gains. As he knows from experience, it’s not only possible for business leaders to pursue both short- and long-term objectives at the same time—it’s essential.
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