Dave Cote, chairman and CEO of Honeywell, is one of the best leaders in business, running one of the best-managed companies. In 2002, he was recruited to spearhead a major turnaround of a dysfunctional, hobbled organization. None of the three CEOs in the four years before him could fix it; on Wall Street, there were no believers.
Today, Honeywell is a leader in technology and manufacturing with a robust pipeline of innovative products used in everything from natural gas extraction to green jet fuel to powerful and efficient cars to 3-D radar for pilots. Orchestrating a remarkable turnaround, Cote pulled levers to remake Honeywell’s portfolio of businesses and create a unified culture. During his tenure, the stock price has more than doubled and revenue has increased 69 percent. Cote says the best is still ahead.
People are taking notice. Cote was recently named Chief Executive magazine’s CEO of the Year. When CNBC’s Jim Cramer raved about Honeywell’s new products, Cote, instead of claiming credit, responded, “It’s unbelievable what our guys can do.” Fortune portrays him as “an increasingly rare commodity in the business world, an independent thinker who’s the antithesis of a slick, pre-packaged CEO.”
I see Cote as part of something critically important that’s happening across industries. A growing number of leaders are breaking with conventional thinking, pushing boundaries and creating powerful new agendas for change. These executives, diverse in style and background, are successful because they think, act and are different.
In their zeal for growth, these new leaders are leveraging all of their assets, including the softer side of business. They are exceptional collaborators, support great talent and create cultures that inspire exceptional work. In doing so, they are changing the role of the CEO position. Here are three of the salient differences that strike me about Cote
Integrity—Honeywell’s golden rule—is a commitment to a code of ethics and values, including doing what’s right for the business, doing what you commit to and looking out for others. Integrity fosters credibility and trust. It’s the defense against bad behavior, corporate excesses and the pushing of ethical boundaries.
Leaders committed to integrity also project confidence, which makes people more inclined to accept their ideas. Cote shows conviction in his interviews and speaks openly about controversial issues that others avoid. He must know that to get people engaged, they first need to believe what they are being told.
Many leaders fail to see that their own decisions and practices have a profound impact on the business’ culture and their ability to change it. Others don’t understand the connection between culture and what their organizations are capable of delivering. When a prominent CEO told me it’s impossible to change the culture of an acquired company, I knew she was in trouble.
Cote understands that culture matters, and changing it is closely related to strategy, business practices and processes. He had to integrate three disparate cultures to make the businesses work. In his recent Harvard Business Review article, he writes, “Most important, we established a ‘One Honeywell’ culture in which we focus on business acumen, listening to the customer and doing what we say we’re going to do.” In a conscious move to change behavior, he introduced new disciplines across the company, including a framework for the acquisitions needed to change the portfolio.
Honeywell’s managers see that culture drives performance. The firm’s “Code of Business Conduct and Twelve Behaviors” defines success, puts it in front of everyone and makes it actionable. Cote has made it real.
CEOs need to stay ahead of the markets to anticipate and respond to new opportunities. To do that, they need to be involved with people who are innovating within their disciplines but may not have a direct stake in their businesses. External contacts are the richest sources of new and innovative ideas.
Others, like Cote, are developing connections more broadly with good reason. It’s good business, helps solve difficult problems and changes people’s behavior. Some assume hands-on roles in influencing social and environmental trends. David Jones, the Global CEO of Havas, for example, co-founded One Young World in 2009, bringing together youth to create solutions for pressing world issues.
Cote takes his external roles seriously. He’s vice chairman of the Business Roundtable and chairman of its Energy and Environment Committee. In 2010, President Obama appointed him to the National Commission on Fiscal Responsibility and Reform. He presented his American Competitiveness Agenda to the Aspen Ideas Festival in 2012.
Other CEOs need to be influencing change and building public support for what they believe in. Leaders like Cote, who want aggressive growth, are attentive to the softer side of business that drives performance and innovation—and strengthens economies. These leaders can ultimately inform and reset the public’s view of business as a positive force in the world.