Mike Cote's Business Editor's Notebook: Honeywell 'CEO of the Year' has NH factory town roots
Most people in New England named Cote can trace their lineage to Jean Cote, a French immigrant who arrived in Quebec in 1634, a couple of centuries before some of his descendants crossed the border to the United States. They were likely lured by the promise of work in the textile mills that transformed so many communities into factory towns dominated by French Canadians.
Honeywell International CEO David Cote and I talked briefly about our common ancestry during a phone interview last week when we were supposed to be focusing on his recognition by Chief Executive magazine as its 2013 CEO of the Year. But our discussion was more than idle chatter. The Suncook native embraces his factory town heritage and the time he spent as a night-shift laborer at a General Electric jet engine plant while working his way through the University of New Hampshire. He knows what it's like to get your hands dirty and how people at the top often have no idea of what is going on down below.
"My dad always used to say, 'Start from the very bottom because you will understand the system and everything else.' He was right," Cote said. "It gave me a real appreciation for how the people who are actually getting the work done feel about things."
Cote, 60, was lured by Honeywell in 2002 to become its CEO from TRW, an auto, aerospace and information technology supplier he joined in 1999. Cote had arrived there after two decades as an executive at GE, where he was once a possible candidate to succeed Jack Welch.
He's been credited with turning Honeywell from a struggling industrial giant that lost $220 million on $22.3 billion in revenue in 2002 to a powerhouse that reported record earnings of $3.5 billion on revenue of $37.5 billion in 2012. The Morris Township, N.J.-based industrial manufacturer, which has a presence in Manchester, makes everything from consumer thermostats to jet engines, with major operations in aerospace, automation and controls, performance materials and transportation. The Fortune 100 company employs 132,000 people worldwide.
Since Cote's arrival, Honeywell has increased sales by 71 percent to $37.7 billion and delivered a total shareowner return of 240 percent, consistently outperforming the Standard & Poor's 500. Since 2003, Honeywell has acquired more than 75 companies and shed 50.
When Cote arrived, Honeywell had three warring factions, the result of acquisitions, that were not speaking to one another. Creating a unified company culture was his first priority, he says. He remembers an early meeting during which a staff member questioned why he was focusing on that when there were strategic issues to consider.
"I said I can make all the strategic decisions you want, but it doesn't matter if nobody does them," said Cote, who figures he must have talked to 10,000 people in the first two months he was at the company, stressing that push for solidarity. He sought to bring the company together through 12 behaviors and five initiatives that became known as the Honeywell Operating System, which was gleaned in part by a similar program at Toyota.
Having had experience as a laborer at GE - where a quality control program was virtually ignored on the factory floor - Cote knew he couldn't and shouldn't expect change overnight.
"You don't go to somebody who has been working in an 80-year-old factory for the last 26 years, and say, 'Hey, on Friday just keep doing what you're doing. On Monday were starting the Honeywell Operating System,'" Cote said. "You have to build trust."
During his initial tenure, he also set about getting Honeywell's books "in pristine condition," improving the company's product pipeline and expanding its global reach. The company generates about 54 percent of its revenue from outside the U.S., compared to 41 percent a decade ago, which means Cote and his executive team spend a lot of time traveling the globe.
"It sounds counterintuitive, but I bought two Gulfstream 550s so none of my staff members could complain about how difficult it was to get to any of these countries," said Cote, who figures he's traveled to 100 countries in his work to make Honeywell more global.
That perspective also informs Cote's work with the Fix the Debt coalition, an organization made up of 140 corporate leaders who are working to press Congress to take action to tackle the nation's $16.7 trillion deficit.
"The problem is so big that I really feel as an American you can't be aware of the problem and not try to do something about it," said Cote, who visited Manchester in February to speak at St. Anselm College about the issue. "If you understand it, you can't stop talking about it. ... We have to get our financial house in order or we will never be able to compete globally.'"
Cote remembers how folks in his native Suncook would frown upon people who lived beyond their means and could not pay their bills.
"You were always expected to take care of yourself and your family," he said. "You didn't want to put yourself or your family in that kind of position."
Mike Cote is business editor at the Union Leader. Contact him at 668-4321, ext. 324 or email@example.com.