First, he would make Honeywell a company where not just investors, but also suppliers, customers, and employees, would say when he retired, that they made a lot of money working with Honeywell.
Second, he would attract and grow talented leaders that recruiters would try to poach, but who wouldn&a;rsquo;t leave because they made good money and also had opportunities to build a career and grow as a person.
Third, he would commit to holding his company shares for 10 years after leaving the company.
Did Cote deliver on these promises? &l;a href=&q;http://investor.honeywell.com/Cache/1001233355.PDF?O=PDF&a;amp;T=&a;amp;Y=&a;amp;D=&a;amp;FID=1001233355&a;amp;iid=4121346&q; target=&q;_blank&q; rel=&q;noopener noreferrer&q; target=&q;_blank&q;&g;Last year, in his 2017 shareholder letter&l;/a&g;, Cote reported that since he took the helm at Honeywell, the stock had returned over 400% to its investors.&a;nbsp; Among these investors were roughly 2,500 employees who had become 401(k) millionaires. He proudly added that 94% of these millionaire employees were below the executive level.
&l;img class=&q;dam-image bloomberg size-large wp-image-39251782&q; src=&q;https://specials-images.forbesimg.com/dam/imageserve/39251782/960x0.jpg?fit=scale&q; data-height=&q;640&q; data-width=&q;960&q;&g; Dave Cote
Throughout his career, Cote was aware of headhunter interest in Honeywell&a;rsquo;s high-performance leaders. Some left, but many stayed. His co-authorship of Honeywell&a;rsquo;s last two shareholder letters with his hand-picked successor, Darius Adamczyk, is evidence of his mentorship commitments.
Third, Cote wrote in his letter that he expected the Honeywell shares he owned would be worth significantly more after he left, thanks to the people processes, and the portfolio that he and the people of Honeywell had engineered to produce resilient results. He expected to hold them for ten years.
Why could Cote keep these promises? One explanation is his commitment to clear and candid communication. Consider the vocabulary in these perceptive quotes from his first letter as Honeywell CEO:
&l;blockquote&g;&l;em&g;Our free cash flow was just superb coming in at a record $2.0 billion, beating original expectations by more than $500 million. Cash means flexibility.&a;rdquo;&l;/em&g; &l;em&g;Honeywell has a culture of governance and integrity essential for the success of any company &a;hellip; to full compliance with all laws in all countries. There is no support, no &a;rsquo;wink and a nod&a;rsquo; for anyone violating the law&l;/em&g;.&a;rdquo; &l;em&g;Growth is most important initiative&a;hellip;because it&a;rsquo;s one where we&a;rsquo;ve had the least success&a;hellip;We have a tremendous productivity culture and we can apply that same mindset to growth.&a;rdquo;&l;/em&g; &l;em&g;Our customer commitment must be palpable and relentless. Honeywell&a;rsquo;s goal is to not just to outperform our competition, but to help our customers outperform their competition.&a;rdquo;&l;/em&g;&l;/blockquote&g;
Cote also told stories, a skill developed by leaders who want to align, educate, transform and inspire others. This story is from his 2002 letter:
&l;blockquote&g;&l;em&g;During my first weeks at Honeywell, I visited with about 20,000 employees in nine countries. The intent was to do some &a;lsquo;cheerleading&a;rsquo; and bring momentum to what I expected to be a dispirited group. Instead, I drew inspiration from them. There was no whining, no recriminations about the past, no disaffection. What clearly came across was a drive, a desire, a determination to move forward! They were asking for direction. I wasn&a;rsquo;t pushing &a;hellip;they were pushing me!&q;&l;/em&g;&l;/blockquote&g;
Words like &a;ldquo;whining,&a;rdquo; &a;ldquo;dispirited,&l;span&g;&a;rdquo;&l;/span&g; &a;ldquo;disaffection,&a;rdquo; and &a;ldquo;pushing&a;rdquo; are not typically found in CEO communications. These words evoke states of being and invite actions that go beyond most CEO comfort zones. Throughout his career, Cote chose words that challenged assumptions, clarified choices, showcased ambitions, and built trust. Honeywell&a;rsquo;s stakeholders have been the beneficiaries.
Cote&a;rsquo;s genius for leading with powerful vocabulary might have come from Ludwig Wittgenstein&a;rsquo;s playbook. This 20&l;sup&g;th &l;/sup&g;century philosopher believed that &a;ldquo;the limits of my language are the limits of my world.&a;rdquo; Apply this principle to CEOs and we can imagine that executives with limited vocabularies will see less of the world. They will be more limited in spotting risks and opportunities spotting, than is true for vocabulary-rich leaders. (Note to Boards of Directors: Add vocabulary depth and breadth to your CEO search criteria.)
&l;a href=&q;https://blogs-images.forbes.com/laurarittenhouse/files/2019/02/Darius_Adamczyk.jpg&q; target=&q;_blank&q;&g;&l;img class=&q;size-full wp-image-922&q; src=&q;http://blogs-images.forbes.com/laurarittenhouse/files/2019/02/Darius_Adamczyk.jpg?width=960&q; alt=&q;&q; data-height=&q;900&q; data-width=&q;665&q;&g;&l;/a&g; Darius Adamczyk
What can we expect from Honeywell&a;rsquo;s new CEO? Here&a;rsquo;s what Adamczyk promised in his 2017 letter:
&l;blockquote&g;&l;em&g;My intent is to create the best software-industrial company, which attracts, recruits, promotes, develops, and cultivates the best and most talented employees on the planet. We will drive an entrepreneurial culture which is bold yet thoughtful, and takes calculated risks to achieve superior results. I want each of our employees to improve every year and have a passion for winning. We also want to maintain customer intimacy in order to understand and solve our customers&a;rsquo; problems. We have to not only think big, but also deliver big.&q;&l;/em&g;&l;/blockquote&g;
His themes come from the Honeywell playbook: cultivate employees, take calculated risks, and solve customer problems. He introduces new vocabulary like &a;ldquo;passion for winning,&a;rdquo; &a;ldquo;a bold, yet thoughtful culture,&a;rdquo; and &a;ldquo;think big&a;rdquo; and &a;ldquo;deliver big&a;rdquo;.
Soon his first solo letter as CEO will be out. I am eager to read it.
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