When David Cote became Honeywell’s CEO in 2002, the industrial conglomerate was in disarray. General Electric had just tried unsuccessfully to acquire Honeywell, which left Cote’s employees divided.
To make matters worse, Honeywell had acquired Pittway, a home security firm, in 2000. Integrating Pittway’s employees led to cultural clashes.
Cote listed 12 behaviors that he wanted everyone to follow. He felt that unifying the company around the behaviors would work better than articulating vague, hard-to-measure values.
Examples of the behaviors included customer focus, self-awareness and championing change. This evolved into what became known internally as the Honeywell Operating System (HOS), which employees soon nicknamed “One Hon.”
Under this system, Cote expected every employee to propose two easy-to-implement ideas to improve results. Cote’s goal: involve everyone in improving operations and identifying opportunities for “continuous improvement.”
Unlike incoming CEOs who typically bring in their own team, Cote chose to give the executives he inherited a chance to shine. Tim Mahoney was one of them. A 16-year Honeywell veteran, Mahoney recalls his tricky negotiation to acquire EMS Technologies in 2011. Cote, who often quotes the dictum, “If you have five minutes to solve a problem, spend the first three minutes thinking about how you’re going to do it,” asked Mahoney if he had taken his “three minutes.”
“I promised him I would call him back with a considered answer,” Mahoney says. “The following morning, I told him: ‘I’m confident I can deliver on this one and I’m willing to risk [my] reputation on it.’”
The acquisition proved a big success, one of 80 acquisitions since Cote became CEO. In 2012, Honeywell grew sales by 3% and generated $3 billion in free cash flow. It has 132,000 employees.
— Adapted from “What Transformational Leaders Do,” JP Donlon, Chief Executive.