Honeywell Chairman and CEO Dave Cote

When Honeywell International appointed Dave Cote as CEO and chairman in 2002, the world was in recession and the company was in dire straits. It had just been through an ineffectively executed merger with AlliedSignal and was suffering from substantial financial losses, low morale and divided focus.

But Cote, whose hardscrabble New Hampshire childhood is well documented, was used to turning things around. The new CEO—whose previous experience included two decades in senior positions at General Electric—began by systematically changing the corporate culture. He unloaded dozens of businesses, bought dozens more, and moved some operations to countries such as China and India, where costs are lower. Today Honeywell is a diversified technology and manufacturing company with more than $40 billion in assets that delivers strong results to shareholders. It has enjoyed the kind of comeback that will likely be studied in business schools for years. As for its leader, Barron’s echoed a widely held view when it named him this year to a list of the world’s best CEOs.

Cote (pronounced coat-ee) clearly owes his success partly to self-confidence and self-discipline. (Rudyard Kipling’s “If,” a poem about those traits, hangs in the doorway of his office. Read it at the end of this interview.) I was also struck during our interview by his focused energy, lack of any apparent cynicism, and childlike excitement about topics ranging from business jets to the New England Patriots to iPhone cases. I found it easy to see how his enthusiasm for Honeywell and its products could motivate employees at his Fortune 100 company, because when I met with him at his head office in Morristown, New Jersey, I was far along in my second pregnancy and exhausted, but I came away 90 minutes later completely energized.

One reason Cote stands out is his commitment to bipartisanship—a rare attribute these days. Though a registered Republican, he has close ties to the Obama Administration. In 2009, the President named Cote co-chair of the U.S.-India CEO Forum, on which he has served since 2005. Then, in 2010, Obama appointed him to serve on the National Commission on Fiscal Responsibility and Reform, also known as the Simpson-Bowles Commission.

At Honeywell, Cote places a priority on being visible and accessible to more than 131,000 employees in approximately 100 countries. He logs about 500 hours per year on the company’s business aircraft (see "The Honeywell Fleet" below), often jetting off to one of 300-plus plants to walk the floor.
 

You travel exclusively on Honeywell’s aircraft. How has that made a difference for you?

It is not just important that I use my time effectively, but also that I get out and connect with employees so that they know that I know that what they are doing is important. In the U.S. and some other countries, I can see three plants in a day. I could never do that without a business jet.

I am also able to work a lot more effectively on [a corporate aircraft]. We have developed software that allows me to use my Blackberry and iPhone on the plane. I can be 45,000 feet over the Pacific Ocean and dealing with my guys in China, the U.S., and South America. It allows me to constantly be running the company.

You operate worldwide. What is your advice to companies that are trying to start businesses or open factories outside their own countries?

Learn all the local laws and regulations, get good advice locally, and make sure you understand it. Sometimes you’ll find that what the other country is already doing is even more logical than what you [are used to doing].

It is amazing how far you can get by just remembering those lessons your parents taught you. Treat people with respect, be nice to people, and it is remarkable how much they’ll forgive you.

Where you grew up there weren’t many successful businesspeople to look up to. Your own kids, however, are dealing with the opposite extreme. The reality is that it will be hard for them to measure up to you in terms of business success.

It is a little difficult for kids sometimes if they grow up with a parent who has had some success. There are enough people like me—people who start with almost nothing and end up in a good place—that they have awards for us. But there are no awards for kids who start with something and also turn out well. Because if they are successful people say, “Well, of course.” If they are not successful people say, “Look at all the advantages that kid had and he still couldn’t do it.” So my kids are in a tougher spot than I was.

It’s also tougher because they have a lot more choices, and they have to pick the right ones. Whereas for me, the only [question] I had to [ask] was, “Is this going to pay me more than the last job?”

How do you like being a grandfather?

I don’t consider myself an emotional type. Four years ago, I got the word [my grandchild was about to be born], so I drove to Massachusetts. I stayed up all night waiting for the big event, very calm. And then I went into the room and I held her, and all of a sudden I started blubbering like a baby. I remember sitting there thinking, what is happening to me? I was much more moved by it than I ever thought I would be. I was just astounded by my reaction.

I like what you have said about the importance of being self-aware.

I am a relative latecomer to self-awareness but I did learn it, thank God.

There was kind of a watershed moment about 20 years ago. I used to get feedback that I was defensive about things, to which my reaction, of course, was, “No, I am not.” One day I was in a meeting, and I reacted to something being said, and the person said, “Gee, Dave, don’t be so defensive.” So I asked him directly, “Do you consider me defensive?” And he said, “Well, I wouldn’t say you are defensive. But if we say something negative about your organization and we are not 100 percent correct, you will rip our lips off.”

That stuck with me. I thought about it a lot and realized I need to think differently. Sometimes I still get defensive, but I am much more aware of it now.

Right now the press loves you but when you first started as CEO, the press was not kind. How did you handle the criticism?

I was relatively confident that we could [succeed]. I felt that we didn’t have any other choice, and it’s not like I could argue back [with the press] because in the beginning, I had nothing of substance to argue with. The only thing that would ever prove it is if I could [achieve success].

In college, you worked nights in an airplane factory. Do you ever look back in disbelief at how far you have come since then?

Always. Sometimes I will think to myself, “I can’t believe that little Dave Cote from Suncook, New Hampshire is doing this.” I mean, my big goal when I finally did get out of school was to someday make $20,000 a year to support my family.

How far would you allow yourself to dream back then?

It was kind of a budding awareness. Every step I took where I realized I could do it allowed me to think bigger than I did before. And it is not like people were always helpful along the way. I remember having an interview with a general manager when I was in finance and him asking, “What do you want to do someday?” I told him that I would like to be a general manager of a business. He said, “Well, that is not going to happen—get real. What would you really like to do?”

So [I needed to have] a fair amount of confidence [to move forward.] But it grew over time and it wasn’t until maybe 20 years ago when I first started to think, “You know, I probably could be a CEO. I wonder if there is a way to make that happen.” But [I didn’t think like that] from the beginning. The first 10 years were just, “I need money. I need to support my family.”

Do you credit your parents with giving you the original self-confidence that then grew? Or were you born with it?

I am a big believer in nature as well as nurture—that we all have a genetic soup that goes back thousands of generations, and who knows what part we get. But it’s also nurture. All five kids in my family are pretty independent, and I don’t think that’s [purely] genetic. Our parents taught us that you are responsible for yourself and your behaviors.

They gave all of us different responsibilities. When I was 10, Mom put me on the bus with a bunch of money to go downtown, pay the bills, get the receipts and the right change, and come back home. It was a little daunting the first time but eventually, you learn and you grow. My dad had all of us working in the garage at a young age.

Did your father live to see your success?

He started getting Alzheimer’s at a relatively young age, so unfortunately it didn’t quite work out that way. He passed away about 15 years ago.

But your mother is still alive. How does it feel to have her along for the ride?

I am quite proud of my mom. My dad had six months of high school, my mom had two days of high school, and then got a secretarial degree. But [she always had enormous] confidence, dealing with anybody at any level. When I was in college she said, “I am going to go to high school; I don’t want to have my son in college and I haven’t even gone to high school.” And she didn’t just get her GED—she actually went to high school at night.

You enjoy hunting and fishing. Is that because you can leave your devices behind and separate from the pressures of work?

I never disconnect, no matter what I’m doing. I have this paranoia that somewhere in the organization things are being held up as people wait for me, so I am religious about doing email. It is why we can use our Blackberries and stuff at 45,000 feet because I want to make sure everybody is connected all the time. Even if I am in remote places, I will have a satellite downlink so that I can do my email every day.

That said, hunting and fishing, as well as scuba-diving and snow-skiing, are all-consuming when you are doing them. It is a way of relaxing because you can’t think about anything else; you really have to concentrate on what you are doing.

Despite being a registered Republican, you are very involved with the Obama Administration. Does that fact say anything about the way you lead at Honeywell?

One thing we try to do at Honeywell is to not drive the company through ideology but through facts and opinions. A phrase I use a lot is that as a leader, it is important to be right at the end of the meeting, not at the beginning. Running your company that way means that you are spending a lot more time upfront trying to solicit all the facts and opinions without letting the organization know which way you are leaning. And at the end of the day, my job is about making good decisions. What I think at the beginning [of the meeting] is irrelevant. What matters is, did I make a good decision at the end?

Our government should be looking at it the same way. In trying to figure out the right decision, recognize that there are [other] important points of view that you have to reconcile. Too often it seems like not making a decision is [considered] better than a compromise. But that is just not the way it works [in effective government]. There is a reason we have the system we do—to reconcile all those points of view and keep everybody together. With just a little more tolerance overall, we could get a lot further.

Do you see the situation in Washington improving?

I have always [thought that] the reason we end up with gridlock in Washington is because we have gridlock in the American public. The American public needs to vote for [candidates who say], “I have a point of view, but I need to get something done here, so I am going to work with the other side so that we can reconcile this.”

What things make you hopeful for America?

We have more advantages economically, and more trust in institutions such as our court systems, than any other country in the world. Also, historically, we have in the end made the right decisions. I am fond of Churchill’s line about how you can always count on the Americans to do the right thing after they have exhausted all the alternatives. And that has tended to be pretty true. But…it has to be true again. It will bother me if…my generation [made mistakes] and we are not the guys [who fix them], like all the previous generations did.

Will you ever retire?

I love my job. This [role] is the first chance I have had to really build something, and what I want to make sure of is that we set up something that can perpetuate itself. I want to create an institution that keeps evolving and growing.

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The Honeywell Fleet

Dave Cote flies roughly 500 hours per year on the Honeywell corporate fleet, which operates from Morristown, New Jersey, and Phoenix, Arizona. The company’s flight department employs more than 40 people, including 24 pilots and 10 maintenance technicians, and operates seven aircraft (see Honeywell's Business Aircraft PDF, below).

In a typical year, the fleet will fly 3,500 hours and cover approximately 1.5 million miles. It typically transports 5,500 people annually with a dispatch rate of 99.8 percent. The aircraft have also been used for humanitarian relief missions, most recently to transport medical aid and staff to Haiti following the earthquake in 2010. In addition, Honeywell’s engineering and R&D teams routinely interview the flight department’s pilots and technicians to solicit help with the development of products. 

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CEO Files Résumé: Dave Cote

BIRTHDATE: July 19, 1952

POSITION: Chairman and CEO, Honeywell International (2002–present)

PREVIOUS POSITIONS: Chairman and CEO, TRW, a products and services provider to the aerospace, automotive, and IT markets (1999–2002); president and COO, GE Appliances (1996–99); various other positions at General Electric (1979–96)

EDUCATION: Bachelor’s degree, business administration, University of New Hampshire

CHARITIES: Honeywell Hometown Solutions, which focuses on middle-school math and science education, disaster relief, family safety, rebuilding homes and environmental education. 
PERSONAL: Three grown children, five grandchildren. Enjoys time with family at his upstate New York farm, where he hunts and fishes. Also likes “anything from classical music to rock to the blues to hip-hop” and cheering on his beloved Boston Red Sox and New England Patriots.

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Editorial director Jennifer Leach English interviewed cable TV pioneer Sheila Johnson for our last issue.

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A Poem Cote Lives By

Dave Cote draws inspiration from the poem “If,” by Rudyard Kipling, which hangs in the doorway of his office:

If you can keep your head when all about you

 Are losing theirs and blaming it on you,

If you can trust yourself when all men doubt you,

 But make allowance for their doubting too;

If you can wait and not be tired by waiting,

 Or being lied about, don’t deal in lies,

Or being hated, don’t give way to hating,

 And yet don’t look too good, nor talk too wise:
 

If you can dream—and not make dreams your master;

 If you can think—and not make thoughts your aim;

If you can meet with Triumph and Disaster

 And treat those two impostors just the same;

If you can bear to hear the truth you've spoken

 Twisted by knaves to make a trap for fools,

Or watch the things you gave your life to, broken,

 And stoop and build ’em up with worn-out tools:
 

If you can make one heap of all your winnings

 And risk it on one turn of pitch-and-toss,

And lose, and start again at your beginnings

 And never breathe a word about your loss;

If you can force your heart and nerve and sinew

 To serve your turn long after they are gone,

And so hold on when there is nothing in you

 Except the Will which says to them: “Hold on!”
 

If you can talk with crowds and keep your virtue,

 Or walk with Kings—nor lose the common touch,

If neither foes nor loving friends can hurt you,

 If all men count with you, but none too much;

If you can fill the unforgiving minute

 With 60 seconds’ worth of distance run,

Yours is the Earth and everything that’s in it,

 And—which is more—you’ll be a Man, my son!