When David Cote took the reins at Honeywell in 2002, the company was still reeling from a series of unfortunate events.
In 1999, Honeywell was bought by Allied Signal, a company twice its size. The newly formed company didn’t mesh well. In 2001, the company’s plan to be acquired by General Electric was rebuffed on antitrust grounds.
Having trained under GE’s Jack Welch, Cote began the task of forming a new Honeywell culture. He started by identifying 12 measurable behaviors that he wanted to see within the business—including customer focus, self-awareness and championing change.
To allow those new behaviors to take hold, he launched a new training process called “One Honeywell,” or “One Hon.” Then he shook the earth by launching the “Honeywell Operating System,” or HOS, which is really a customized version of the Toyota operating system.
The new system has transformed the company from one of the country’s most messed-up firms to one of its best. Managers say that without the focus on continuous improvement, the company wouldn’t be nearly so productive, or profitable. Since 2002, the company’s profits have doubled to $4 billion.
Every day begins with a 15-minute or less shop-floor meeting, where employees try to pinpoint problems and possible improvements, which are sent up to managers. The company expects every employee to come up with two implementable ideas for improvement, per month.
That’s the sort of focus that has helped improve every action taken at the factory. For example, it used to take 42 days to make and deliver a toxic-gas detector for clients such as Intel. Now it takes 10 days. And whereas the process used to occupy the entire factory floor, now it uses only one-quarter of it. The other three-quarters can be used for making other products.
In other words, the factory makes more stuff and generates more revenue, using essentially the same head count, square footage and energy consumption.
— Adapted from “From bitter to sweet,” The Economist.
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