David Cote | The CEO of Honeywell Who Grew the Company from $20 Billion to $120 Billion | How Companies Can Win in the Short Term While Investing in the Long Term

Audio Transcription

Speaker 1:
All right, ladies and gentlemen, it’s now time for another exciting edition of the thrive time show we’re on today’s show. We interview the former CEO of Honeywell who grew the company from $20 billion to $120 billion in market valuation on today’s show, he’s going to teach you why you should list free. Shop your own employees, his thoughts on speed golf, and how to achieve great short term results and great longterm results simultaneously while stressing the importance of learning to think for yourself, prepare to be emotionally disturbed. Many times you’re gonna have a good time. So here we go. Three, two, one, and go

David Cote
Get ready to answer.

Speaker 1:
Got it from the bottom. Now we’re on the top time. You the systems to get what we got come Dixon’s on the hooks are pretending the books. He’s bringing some wisdom and the coat look at the father. That’s why I’m a DOP. So if you see my kids, please tell them how to C and C put in your brain. Now three, two, one. Here we go. Yes. Yes, yes. Yes. Dr. Z. I was, uh, doing some research for today’s shift and I was taking several minutes to put together some of the deepest research I could possibly do for the show. And I was, uh, I had a small conversation with you. I said, dr. Z, what’s bigger, a billion,

David Cote
A million

Speaker 1:
Never really had. I never really had time to get closure on it. What, what, what number is bigger, sir? What would you say? What, what number is bigger than a billion or the million? I’m going to go with choice a and I might even have to phone friends. I’m gonna go with bill. Okay. Thanks for clearing that up. Now you do get one mega point, sir. Thank you so much for clearing that up. Now, a lot of public school here now, now on today’s show folks, we have a former CEO. We have a guy who led a billion dollar company. David Cody will come to the thrive time show. How are you, sir?

David Cote
Very good to be here. It sounds like it’s going to be an interesting one. Yeah.

Speaker 1:
Oh, you got, sir, I have to ask you, uh, just asking about the word bunion makes me nervous. How big was Honeywell outbreak? Did you help to grow Honeywell to what, what size?

David Cote
Well, uh, on a sales basis, we took it from 22 billion to 42 billion and in terms of value, uh, so that stock price times number of shares. So total market capitalization, we took it from 20 billion to 120 billion. Whoa, that’s a lot of cats, which

Speaker 1:
I’m going to give you a mega point, sir. Well done. Well done. And I know you did it for the mega points. Um, before we, I just want to ask you, what is it like on a daily basis being the head of a billion dollar company? I mean, is it, do you experience a lot of pressure? Do you find yourself talking into a box fan to calm yourself down? I mean, what do you do?

David Cote
Well, first of all, I loved my job. It was to your point, very intense. I can’t say that I ever felt stressed. I mean, there were those times where there’s a few more anxiety than others, but I mean, I can’t say that I was unable to sleep at night or anything like that, but I spent, Oh, let’s see, five to 600 hours a year on the plane traveling around. That’s the equivalent of like 24 hour days, just, wow. The plane, just an, a visited over a hundred countries just to meet people, meet customers, talk to employees, that kind of thing. When I was in town, I get up at six 45 and, uh, I’d be in my car at seven o’clock driving to work so that I could get there by seven 10 for breakfast. I always had two extra large Dunkin donuts coffee and a cigar, which is probably not recommended health wise by doctor here. But certainly it certainly served to get me going for the day. And I made a point of exercising at the end of the night. So even if it was eight, eight 30, by the time I got to the gym, I would still, uh, exercise for 45 to 60 minutes just as a way. Cause I find it, it was a good stress reliever for me. It made it easier to sleep at night and just got rid of a lot of energy,

Speaker 1:
Sir. Where did, where, where did you come from? I mean, you you’ve this success when you’re talking about building a billion dollar business growing into $120 billion in market cap, that is just, that’s a lot of money. Um, where did you come from and what was it like growing up?

David Cote
Well, my was, uh, I guess atypical in terms of what people expect, uh, kind of a CEO background is going to be, but I was the first one in my family to graduate from high school. My mom had two days. My dad had a, in a, an a one year secretarial course and my dad had six months. I grew up in a little French Canadian, textile mill enclave in New Hampshire called Sankar where I spoke only French until I was three years old. I didn’t speak any English at all, really. And anyhow, and my French is bestie jewel at best now. So we didn’t have a lot of role models. And, uh, my mom always said, uh, you know, she wished she, my dad had been able to give me better advice about what to do next, but they didn’t know. And there was nobody to ask.

David Cote
I was the thing we did do though, is I got great values from them. I thought I didn’t appreciate it at the time, but as I got older, I did. And I’m often at times asked, where did, uh, you know, who’s the leader that most influenced you? Who where’d you learn all your leadership lessons? And I always say the same thing. It’s, you know, my mom and dad, they really instilled the right kind of values and those values were useful as a kid. And they’re useful as an adult. So I was casting around, I hated school. I couldn’t wait to get out and do something, accomplish something, but I had no idea what. So I had a lot of ambition, but absolutely no direction. So I quit school before I got there. I was supposed to go to the university of New Hampshire and I quit for a year, try to become a mechanic, tried to become a carpenter and realized that I had absolutely no aptitude for any of it.

David Cote
So I figured, okay, I better go back to school. Oh, I enlisted in the Navy and then backed out the day before I was supposed to swear in to be on a nuclear sub for six years, managed to get myself back in school after two years. And I was sick. I’d never had any money, but the assistant Dean of students call me to her office and said that no longer be allowed to live on campus any longer. Because I said, well, what did I do? And I had, of course my jeans, a flannel shirt and long hair, which was the thing then. And um, I said, what did I do? She said, well, no one big thing. You just a general troublemaker, wherever you are, there seems to be trouble. And you can tell I’m still pretty proud of that. It’s a 45 years later. I’m still proud of it. So I started working nights. I went to school during the day and then I quit for another year with a body to become commercial fishermen off the coast of Maine with our own

Speaker 3:
Compared to abandoned ship. We can’t roll away home

David Cote
And that didn’t work out so well. And he got married and his wife basically said, you’re not going to keep fishing with that idiot friend of yours. I knew. And he said, nah, okay. You know, uh, as, as new wives I think have a tendency to do so we, um, I got married and first month I’m home, um, wife comes home and says, I’m pregnant four months later says I can’t work anymore. And we’re living in this unheated, um, insulated apartment in New Hampshire, which means, yes, it gets cold. At night. I did the math and realized that on my salary running a punch press, I was making $2 a week, less than I was spending. And I realized I had a hundred bucks in the bank. So I said, okay, I got 50 weeks to figure out what the hell I’m going to do. The only thing I was good at the school, I went back to school. And, uh, as you might imagine, I got a four on that year instead of the normal three. Oh, I was able to kind of get by with, without doing anything still work nights, then managed to get a job at GE in the finance area spent 25 years of GE kind of worked way up to running the major appliance business in Louisville. Kentucky went to TRW for two and a half years, became the chair and CEO there. And in 2002 went to Honeywell to, for the same job. David,

Speaker 1:
David, David. David, did you meet Jack?

David Cote
Did you meet captain Jack? Do you meet Jack Welch with the great one? Oh yeah. He was my boss.

Speaker 1:
[inaudible]

David Cote
I can’t handle. I’m so excited. So you, what was it like, Jack? Is your boss? Well, uh, even better. He’s the guy who fired me. Here’s the, here’s the, here’s how it went,

Speaker 1:
Battling music. Here’s how it goes. Just like you’re the best Rose. Can I go scotch whiskey right now? I’m like, you’re the best

David Cote
You’re back. Me kid. Get out of here. You’re fine. Like that. Walk us through it. Well, it was, uh, June of 99 and uh, I got a call from the HR guy saying Jack would like to have dinner with you. I went, uh, yep, exactly. And that was my feeling also. So I got there. And, um, first thing you said was, uh, Dave, I want you out of the company by year end. And I said, okay, well, um,

David Cote
I don’t remember what, what kind of trick we might’ve had. But, uh, and I said, well, what did you see that you didn’t like, or didn’t see that you wish you had and his voice just elevated. And he said, Dave, you don’t understand. I want you out of the company by year end. And I said, yeah, I know, but I think I’m better than you think I am. So if there’s something I need to address, I’d like to know what it is and his voice got even louder. And he said, you don’t understand, I want you out of the company by year round. I said, all right. All right, I got it. I got it. I never did find out. Did you, did you spend all the time with Jack before going out to that bizarre dinner with Jack Welch? Uh, not a lot of time. I mean, business reviews and that kind of thing. I mean, it definitely knew him. I worked for him. He was my boss. So what were, what was it, what was it when you’re sitting down with Jack Welch for a typical review or for a weekly meeting or for it? What is the interaction like with, what was it like with Jack Welch?

David Cote
A highly variable. So it could be like, I used to say he could be the most charming person in the world if he wanted to be. And then he could be the most mercurial, emotional guy you’ve ever run into where you’ve of sit there wondering what, where’s this going? What are we, what are we talking about? It doesn’t even make sense to me anymore. This is just emotional. And it was one of the things that I’d say I fought myself for is not understanding the emotional side of them. I always figured it was just kind of a shtick as a way of trying to get people to do things. And then I ended up realizing later on. He really was like that. And if I’d had a better understanding of read them a little better, um, I think my life might’ve been different now. It worked out just fine.

Speaker 4:
Yeah. You know, you, you gained a big traction. I just want to ask you, when was the time where you thought, man, this is working out and then I want to get into your book and Josh Wilson’s here, he’s growing. And he has a company called living water irrigation. He manages a lot of people. His business has grown. He’s got questions. Dr. Z has questions, but I just want to ask you, when did you feel like you were starting to gain some traction

David Cote
At Honeywell

Speaker 4:
With, with, with your career? I mean, what, when did you think, man, I actually am going somewhere. I’m moving up the corporate ladder baby. I can see it happening.

David Cote
Yeah. I didn’t, um, that didn’t happen early on. Cause uh, early on I had no career aspirations other than to make more money than the last job. Cause I was desperate for it. I mean we were every week I was figuring out which bills I could afford to pay and which ones I could let slip. And I, I hated living that way. And my goal was just take whatever will pay more. And what was an accelerant for me was an interaction I had with Jack when I was, I don’t know, about 34 years old, I guess. And I had to, um, I was response with two separate things. One, I was responsible for sending out a strategic plan requests, the financial templates that all the businesses had to fill out. This was like 1986. And um, separately I’ve been assigned that month to do Jack Welch’s board pitch, which was the first time I’d ever had to do that.

David Cote
So I have to send out the strategic plan requests. I recommend to my boss and all my, um, uh, you know, team members, uh, fellow employees that we not send it out because I said we don’t do anything with it. I was voted down by my boss and everybody else. So I sent it out couple of months later, I get this phone call from my assistant saying, Hey yeah, Jack Welch wants to talk to you. So I get myself mentally prepared thinking, okay, what’s the status of his board pitch. That’s what he wants to know. And remember, this is 1986 and I pick up the phone and he said, Hey, is it true? We asked the medical systems business for what the ROI will be in the ultrasound business in 1989. And I’m just standing here thinking where the hell is this coming from? I have no idea where this question coming from.

David Cote
So I’m scrambling and after a couple seconds, but I said, Oh, we might, as part of the strategic plan request, he came through the phone at me and with all, uh, any curse word you want to pick, uh, feel free to interject. And he said, I want to see it right away. So I got it together, ran up to his office. He hollers for me to come into his office. And for the next 15 minutes, he just yelled at me and asking me why I do such a stupid thing and cursing at me and flipping through the pages just to irritate himself. And he finally on your job, I, I’m not kidding. And he finally says, you’ve done your job now. I’m going to do mine. You can leave. So, okay. So I walk out and I went home and called my wife. I mean, I went to the office called my wife at the time.

David Cote
So I think I’ve been fired. I’m not sure how this works, but you know, I think I’ve been fired, but I talked to one of my buddies. And the first question was, you didn’t tell him that, uh, you recommended against it. And uh, we voted against you. Did you? I said, no, I didn’t do that. He said, Oh shoot. You know, thanks. So it’s a couple months later and I don’t hear much of anything. Couple of months later, I’m at an RCA acquisition party. And I had been a low level finance guy on the team and I walk into the party and all of a sudden they hear Jack holler. Dave, Dave, get over here. And I think son of a gun, I heard all the stories, but he’s going to fire me at a party. I can’t believe it. So I go walking over there, my buddy comes with me and you know, I’ve got a smile on my face, but inside I’m just churning and we get up there and he said, I need to tell you, Dave, I was never so pissed at anybody since I was in plastics and I can be a little mouthy.

David Cote
And I said, well, I really appreciated you sharing it with me. And he thought, he thought that was pretty funny. So we started laughing and we talked for a little bit. And then my buddy said, you know, Jack, uh, Dave never wanted to send out that request. He recommended against it. And we all voted against him. And I still remember Jack turned to me and took like the inside of his fist and put it into his ribs and said, so you just the nice of those guys. I said, well, I didn’t really look at it that way. You don’t, you don’t rat on your friends. Like, that’s not like it was anything illegal or anything. And he just kept shaking his head and going, wow, God. Okay. Wow. So fast forward a couple of hours getting to the end of the night, CFO pulls me aside and said, you have no idea how much good you’ve done yourself with how everything has gotten handled as well.

David Cote
I am hard pressed to figure out how, because it hasn’t felt very good. They said, well, I know that’s a true. And uh, he said, no, uh, Jack was already impressed with how you handle the discussion with him because he said he made, he made vice-presidents cry the way he was yelling at you and said, you never wilted. And that impressed him is the second one. When he found out tonight, you didn’t throw in your buddies. Well, uh, good things are gonna happen to you. Wow. And it did it. I used to used to be that if you got a one level jump, this levels were a big deal. It was good. Two levels. You were on fire. And all of a sudden Jack had me interviewing for jobs that were three and four levels above where I was. And I got on his radar screen. And he was a huge accelerant to me. And that, that really propelled me and started me thinking that, Oh, maybe I can do bigger things. David, do you want a story? Maybe didn’t want it.

Speaker 4:
Oh, it’s a great story. Do you XE has some hot questions for you and Josh Wilson does too coming up in just a moment. I just want to ask you, do you do a Jack Walton, kind of a, a Jack Welch stick or a Jack Welch impersonation. Can you do that?

David Cote
No, I’m not that good. I barely can impersonate myself.

Speaker 4:
Okay. Okay. And then based on the way that you say you’re are, um, do you love bill Belichick?

David Cote
The Patriots bill Belicheck. Bob Graff. Tom Brady. Yeah. Yes. I know he’s a buck. Uh, yeah. A level mall.

Speaker 4:
Yes, yes. And how [inaudible],

David Cote
As often as I can. And even though we live in Florida, we’ve arranged with a shipping company up in Boston that ships wants this Tia door so they can get the real thing.

Speaker 4:
Oh, that’s why Brady went down there. He’s following he’s following. Oh my gosh. We’ll see. What questions do you have for David Coleman? This guy think about it. He has been fired directly by Jack Welch. He’s also grown a company from $20 billion in market cap to 120 billion. He’s had the blows, the highs. What questions do you have before we start interrogating him about his new book? Well, I think what happens is we have a lot of listeners out there and a lot of people, I mean, our main thing is how to start, grow a business. And I guess whenever it’s not your business and you’re charged with growing it, um, did you feel a sense of ownership and any of those, in which one did you feel the most ownership of? And give me a couple of high points in contributing to growing those?

David Cote
Well, I always felt ownership and I it’s one of the big points that I used to make about any CEO, any leader is that you had to approach your business as if you owned it. And with any decision that you made for anything, uh, put yourself in the position of saying, okay, I own a hundred percent of this company. What’s the right thing. The smart thing to do

Speaker 4:
Bite Island. Nope. Sorry. I said sell it and buy an Island. Sorry, continue. I interrupted you. Please continue. David.

David Cote
I just found that it was a great way. Uh, at least put me in the right kind of frame of mind to make, uh, make any decision. The second thing that I’d recommend to anybody is it’s very easy to confuse activity with results. And there’s a lot of people who start to feel like, well, you know, I’m working really hard. I’m working 80 hours a week, so it should yield something. But it goes back to my fishing boat experience. When let’s say I was an entrepreneur, poor one, but I was, and people would say, you know, must’ve been a great learning experience. Yes. It must’ve learned a lot. Yes I did. What was your biggest learning? So my biggest learning was that hard work. Doesn’t always pay off. If you were working on the wrong thing, it does not matter how hard you work, nothing’s gonna come of it.

David Cote
So anybody working on their own business, make sure you’re working on the right thing. And I was really impressed with the story. I read an ink. Dad was going to be 30 years ago. Now how about the guy who found it, Sam Adams. And he was getting started and his dad said, so what are you doing today? And he said, well, you know, I’m a getting a computer and getting my, getting a, you know, all my books set up so that I can manage the company. And his dad said, do you have a customer yet? And he said, no. His dad said, well, don’t you think you should work on getting a customer before you worry about getting your books. Right. And I thought that was a great insight to how do you make sure you’re focusing on the right thing. It’s too easy for people to confuse activity with results

Speaker 4:
That right there, I’ll tell you what we will miss your next book. We go, we go back after the show and we do a lot of editing to the T to make the intros. Yeah, that right there has to be. The intro has to, I mean, that’s good. That’s good stuff. David, you have a tattoo of that idea. I mean, do you have a tattoo? All the kids today, all the cool kids are getting tattoos. David, you have a tattoo that says quit wasting your time working on the wrong things.

David Cote
No, but I can promise you, uh, I tell it a lot. Cause I, I use this a lot at Honeywell and whenever somebody would talk about something they hit done and yeah, I’d be talking about the results. And they say, well, you know, we really worked hard on this. We’ve been working a hundred hours a week and I would say, well, you know, I can’t put in the share owners letter that our financial results are flat, but everybody’s working really high. They don’t care. You need to have results. So whatever you were doing, you’re focusing on the wrong thing. So figure out what the right thing is. It’s a very, it’s a very human thing to do is to figure, okay, I’m really busy. I’m a lot of stuff. So as long as I’m really busy and doing a lot of stuff and this is going to be great. Well, it’s not, it’s, you’re all working on the wrong thing. It doesn’t matter how hard you work,

Speaker 4:
David, wherever you fired a high level guy at Honeywell. I mean, cause I’m sure you fired several. Did you do the dinner move if you do the more of a, Hey Bobby, Bobby, Hey, would you going to be donuts in a cigar and let’s meet at Duncan, do the lunch move kind of sandwich you like from subway deli. I mean, what was your, what was your move

David Cote
Just on the circuit that it would depend on the circumstances. I never did it over dinner because I thought that was a little, a little silly to tell you the truth.

Speaker 4:
Yeah. You got to eat dinner with them after the fire up now it’s kind of weird.

David Cote
Yeah. It’s like taking a fun activity and confusing it with it’s like having a party at a funeral. It just doesn’t seem to go together. So no, I never did it that way. I tried to have the occasion get handled with a kind of right grace to get the point across, but do it in is civil and is respectful. The ways you could

Speaker 4:
Now, were you a glazed donut or were you a cake donut, donut, sprinkles, old fashioned, or would you mix it up

David Cote
Pathetically? I like all donuts and almost all muffins. It seems it’s the bane of my life for that. I am more careful about that stuff than I want to be.

Speaker 4:
Now, David, as you know, when you run this business, at some point you have to grow from me. You grow from me to wheat. So, uh, to give you a context here, David, Josh had a company that was a startup with five years ago, maybe three little three, three years ago. And now he’s doing $300,000 of sales last month. I mean, so you can see the growth has taken off. It’s an irrigation company. And a lot of times when you tell people what to do, um, they might not do it. You got to manage people and you are an expert of managing people. And so I I’d like to know. And then I’m going to get to Josh here. Um, where do you see small business owners or business owners or middle managers managing poorly and what, what, what can we do to become better managers? Give us some tips.

David Cote
Sure. Uh, well first of all, congratulations on your success. That has to feel pretty darn good. So thank you, David. I really appreciate it. Thank you to the business. I have a lot of respect for entrepreneurs and what it takes to get a business started. My youngest son has started his own business and I’ve seen what that’s like when he spent a year and a half in a eight by 10 windowless office, trying to get something started and going and it worked. And I could tell you, I do understand the pain associated with it. So congratulations, boom. Um, interestingly, when I, when I went from TRW to Honeywell, uh, I got a question from an analyst and he said, geez, you used to have 75,000 people. Now you have 115,000 people. How are you going to manage that increase? And I said, well, that’s not that hard.

David Cote
Really? I didn’t know the 75,000, I’m not going to know the 115,000. It really is irrelevant to the toughest transition was going from being an individual contributor to having three employees. Because that’s the first time you have to figure out how to get things done through other people and make sure those things get done. Right? And that is not an easy transition for people to make because you know how you do things, you know how things happen when you’re responsible and you start to feel that, okay, everybody else is going to be the same way. They are not. Wow. There’s different kinds of capability and there’s different kinds of motivation. And I found two failure modes. One is where people say, well, I get good people. And I delegate and I call that a abdication, not delegation. The second one are those people will feel like they need to be into everything.

David Cote
And everyone knows what that one is. A, the micromanagement, the trick to success is yes. Make sure you have really good people who understand what it is you’re trying to get done and they’ll do it, but also figure out, okay, which person needs an hour, a week follow up, which one needs five hours a week follow up. There were some people who to get them to improve something. All you have to do is say, you know, you’re capable of better work than this. There are others where I used to bring him in my office and say, I’m hitting you with a two by four. And I am telling you, I’m hitting you with a two by four because you seem impervious to suggestion that I’m using a two by four and learning those things and saying, do you know? Cause some people like to say, look, I’m the boss.

David Cote
People need to adapt to me, okay. That may make your life easier, but it’s not going to make you more successful because you’re only going to be successful. If you get good people and you’re able to monitor them to the extent that you need to and figure out which ones need to be monitored more than others, but then also you figure out, okay, what floats their boat? What makes them feel good? Some of them want to spend 30 minutes telling you what they did. Others want no involvement from you and figuring out, okay, what is that? How do I handle each person to make this a successful? Makes a difference? The last thing I would add is, um, yes, you have to pay people well. And, uh, that, that, um, uh, all, all in favor of and people ought to be paid well, if they do a great job, but by the same token, people want to go home at night, uh, being able to brag to their spouse and kids about what they did that day.

David Cote
And to the extent you can make the work fulfilling. And it’s not just praise for everything. You know, everybody gets a trophy, but making sure that they feel like they accomplished something during the day or the week or the month and that you appreciate it. You recognize it, man. That makes a big difference. I guess the last one I would add is if somebody’s not doing a very good job, you need to tell them and they need to fix it because it’s not just that person who is not doing well, but at least a third of the organization will measure themselves based on what are you doing about that person who doesn’t do a very good job. And I learned this one when we, when I was an hourly employee, we had a guy who was a poor performer and we all knew, okay, if they don’t do anything about that guy, then as long as we’re better than him, we don’t have to worry. Well, all of a sudden, one day they fired that guy. What do you do next? You look around and say, Oh, who’s the low guy now. And it just elevates the entire organization.

Speaker 5:
Yeah. In poker, if you don’t know who the is at the table, you’re the fish. So that reminds me of the story that if you go bear hunting, make sure, take a slow guy with you. Right. So Josh, what questions do you have, sir? Hey, David. Well, thank you for the kind words, first of all, but right along that vein, and I think that’s why clay started this line is he’s obviously my business coach, but so we’re going from a handful of people to a lot of people, very thankfully. So do you stylistically manage different from managing people to managing managers? So now my role has been more with our division managers as opposed to each individual on a daily basis. Is there a key or a couple, few points that I could express are or, or bore down on, uh, as far as managing managers instead of managing people? Or is it still the same thing for you, David?

David Cote
Um, yeah, I guess it’s some of the same, but uh, you still want to make it fulfilling for people, but I’d say the big thing is, uh, don’t lose touch with what’s actually going on out there. And if you’re just relying on what your managers tell you, uh, a couple of things can happen. Uh, both involving, uh, you not getting accurate information, cause either they lie about stuff or they don’t know what’s going on. So they just kind of make stuff up. And it’s one of the reasons that, uh, you know, I spent five, 600 hours a year out of the plane and I go tour plants, talk to hourly employees. I’d go to visit customers with salespeople. And it was my way of finding out what the hell is actually going on out here. And is it consistent with all the stories that I’m hearing from my guys?

David Cote
And it’s remarkable what you find? Uh, the other thing I would do, and my guess is this support very well for you is I would make surprise visits to locations. I wouldn’t even tell my assistant where I was going and I would just have them drop me off at a city. I’d get a rental car. And I drive to a plant location, show up at the door, say, hi, I’m Dave Cody. I’d like to meet with the plant manager and then toward the facility because no, then you’re seeing it unvarnished. You’re finding out exactly what’s going on. And you can observe for yourself, is this consistent with what I’m looking for and what I’m hearing from my guys? But I’d say the big thing is don’t lose touch with the people who were actually doing the work out there. Take the time to talk to them about what do you like? What do you hate? What, what about the job could be different? What suggestions do you have about what we ought to do differently? Don’t lose touch with those folks.

Speaker 1:
David, do you, do you golf?

David Cote
Yep. Not very well. But I do

Speaker 1:
During this next portion of the show. I want you to picture, this is the, I want you to picture this. Everybody picture this picture, picture this. You want me drop? You go out to a beautiful golf course. And can I get some echoes here? You got to a beautiful golf course, course, course, and you get ready to whack the golf ball and they open up a cage and you look to your left and left and you say, why is there a cage? And you hear a lion. And then the, the, the caddy, he says, let her rip. And he opens up the cage and the lion begins to chase you down the course and you, this is how this next, this next segment is going to feel here. David’s I’m going to go rapid fire. Okay. We’re we’re, we’re unleashing the lions here. I’m going to keep the questions coming in fast, coming in hot. We’ll see if we can stump a, a, a man who grew a company from $20 billion to $120 billion as the CEO of Honeywell. Susie, I’m ready. Here we go. Your new book, your new book is called winning. Now winning later, how companies can win in the short term while investing in the longterm. Uh, sir, what inspired you to write that book?

David Cote
A couple of things I got, um, inputs is various as, uh, Barack Obama, uh, former president and, uh, Hank Paulson, former secretary of the treasury to say, geez, you know what you gave and how you did it is, uh, worth writing a book about you really need to do this. So I got some really good, um, let’s say support to say do it. The second thing was, uh, I kept reading about all the comments, people about short term ism and how bad it was. And they all made it sound like it was mutually exclusive. You were either short term or long term focused. And I always thought that was the wrong way to think about it because we ran Honeywell on this principle, that success is about achieving two seemingly conflicting things at the same time. And you want low inventory or good customer delivery.

David Cote
Do you want people closest to the action empowered to make quick decisions? Or do you want good controls? So nothing bad happens. You want good short term results? Or do you want a good longterm results? If you’re in the irrigation business, you want to be able to finish a project in an hour and a half instead of two hours, or do you want it done? Right? The answer is, of course you want it right and fast. So the trick is figuring out how do you do that? And that’s what the whole book is dedicated to is, uh, how did we do that in Honeywell? How did we achieve two seemingly conflicting things at the same time? And that is good, short term results and good longterm results.

Speaker 1:
Something David, I’d like to propose this as an idea, kind of a, a dream mandate for me, I’d like to come out to Florida and introduce you to the game of speed golf, where we compensate for lack of skill, with violent urgency. We’re focused on the long term, but also in the short term, we don’t want to get eaten by a lion. And so we’ll start off with that. Went with a rabid dog. We’ll start off with that horse or maybe the other pieces, like a little squirrel, like maybe Raby raccoon. So Susie, now that we’ve asked the deep questions about speed golf, what questions do you want to ask? Uh, he’s an incredible new book. He has winning now winning later how companies can win in the short term while investing in the long term, he’s an author. He’s grown a business. See what questions do you have?

Speaker 1:
I’m going to go back to the undercover boss move. Oh, no. I want to go back to, I go back in time back and he introduced himself as Dave Cody. And so mr. Dave, Cody, what was the biggest, I mean, you had, when you showed up, they didn’t know you’re coming. I mean, they had to just freak out. You can’t tell me they didn’t give the absolute freak freak show. So what was the biggest like when you showed up, it’s one of these companies and one of these factories. Oh yeah. What was the biggest like, Oh, Oh, did you have a couple of moments? Yeah. Cause that’s pretty cool.

David Cote
Well, by the time, the first time I, I did it and I’ve got this story in the book, uh, interestingly I went to, um, uh, you know, the receptionist and now it’s two. I was, and then I wanted to see the plant manager and she didn’t know who I was. So, uh, she called the plant manager and said, Hey, there’s somebody out front here. Uh, name is Dave. He said, he wants to see you. He said, he’s the CEO. And I got the reaction to come down. And, uh, the reason I had done the surprise visit was that we had a fatality at that point a couple of months earlier, and it was a chemical plant and I had, uh, our health, safety, environmental people, uh, kind of all over it. And I thought, okay, I want to make sure this, this really bothers me.

David Cote
I really want to make sure we have safe places. So I’m going to make a surprise visit. So I toured the facility that the union leaders and then, uh, had a meeting with the staff and ask them, uh, what happened here and why did it happen here? And people on the staff started to explain to me that chemical plants were inherently dangerous and that this could have happened anywhere and that they were just unlucky. And I was just incredulous. And I finally, you know, I listened to it a lot just to make sure I understood where everybody was coming from. And I finally ended with saying, do you, do you folks understand a man died here? And this I think could have been preventable and we need to do something differently. And that was an unbelievable aha for me. And as you might imagine, we turned over all the leadership there and it became a model, plant dates, the sort of stuff you find when you actually go out there by, on your own to actually see what’s going on. So that was definitely an aha for me,

Speaker 4:
Followed that meeting. Is that what you’re saying, David? I just have some tough questions for you and Z. You know, one of the things I do, uh, there’s a lot of, uh, there’s a lot of news right now about the FBI investigating people. There’s a lot of people being recorded without their consent. There’s a lot of stuff going on. And so I thought I would, I would pile on and I would do some deep investigative journal, the deep, deep diving into investigating before having David on the show. Well, I wouldn’t, so I went, uh, David, um, when were you really in the, in the peak of your leading hunting? Well, what, what years were you really just in your full stride? What, what years?

David Cote
Oh, I would say, uh, right at the end, I was definitely feeling good about it. Then things were going really well and 2017 passed it on to the guy who is taking us to new Heights. So I felt really good.

Speaker 4:
I’ll tell you this. I had, I went in to see, I didn’t ask. I didn’t even know we’d get them on the show. Okay. I went into the office, uh, and I miked everything and I might move and I did, and I might some stuff. And I think this might be audio for, uh, David, uh, telling the team how to prepare for future recessions. And I want to know if this is actually audio from you, instructing your team. And if it can, we might not be the right audio. Let me, let me cue it up real quick. So much. You have so many ideas. I have so much audio. Let me get, let me just get, I gotta get the section now. So what happens is David walks in and he, and one of the employees has discovered that the recession is coming or that there’s a shutdowns coming and he made a poor call. And so this is David trying to get him to calm down. I believe this is audio. Let me play it. It’s it’s tough to get this audio. Here we go.

Speaker 6:
How did you cover your loss? What junk cartel

Speaker 4:
I’ll talk to you you’ll raise them.

Speaker 6:
[inaudible]

Speaker 4:
Sir. Why would you behave like that? I think that was the meeting that David have a Jack Welch, whatever he was mad about the strategic play. Oh sir. What tips do you have for navigating a recession?

David Cote
You need to identify for me first. Am I the guy yelling or the guy back?

Speaker 4:
It was such a crazy situation. You became both guys, multiple personalities, so unhinge laptop, but there’s a lot of shutdowns going on those seriously. And your book talks about how to navigate a recession and tough times, obviously that wasn’t audio of you, obviously that was audio for me. So tell us about what, what do we do? How do we navigate this stuff?

David Cote
Yeah, this one’s, um, I say the thing I say about recessions is they all come about for different reasons, but there’s one thing that’s true about all of them and that’s, they all suck every single one of them. And you’re always stuck having to pick between the least bad of two options too often leaders spend their time trying to figure out what’s that third option that, uh, you know, is everybody gets gingerbread. Uh, it just doesn’t work out that way. So the first one, this, this recession is different because you have to worry about health first. Um, after you’ve addressed that, I’d say there’s several pieces of advice that I give to people. The first is as a leader, don’t panic. And it’s really surprising how, and when everybody around you is panicking, the press is panicking. The press loves the panic. It generates more, uh, more eyeballs watching, uh, at the end of the day, as a leader, you can’t panic.

David Cote
You’re the one person who cannot, or the second one is to think independently. And I’m fond of saying that, uh, the ability to think independently is a lot more rare than being smacked. And there’s all kinds of smack people who did well in school and can take a test and tell you why something is the way it is, but being able to figure out, okay, here’s what’s going on. Here’s, what’s smart for me, my business, my organization, whatever it is very different. And I benefited there cause I had a mom who used to always yell at me to think for myself and my dad, who always said, be a leader, not a follower. And I think that makes a difference. That ability to do that third one, uh, don’t forget your customer. And it’s too often when you’re in the middle of tough times, it’s easy to forget about your customer and whether it’s short term or longterm, whether you’re worried about investors or employees, that customer is going to match them.

David Cote
And too often, that’s the person that gets forgotten when everything is being cut. The last one would be in the middle of the recession, be thinking about recovery. And when you’re in the middle of a recession, all the meteor, all your people, all they’re talking about is how it lasts like this forever. It’s going to suck forever. It’s never going to be good again, the world has changed. Well, you know, a little bit of that is true, but in general, for the last 50 years, we’ve always come back. So I think the betting person says, okay, let’s bet. We’re going to come back. One of the things I do today to make sure that I’m the company that really comes out of this mightily and what you find is a lot of those like longterm growth programs, seed, planting, whatever it was you were doing when times were better, you should keep doing those in the middle of the recession. Maybe you fund them a little bit less. Maybe things have slowed down a bit, but you find a way to keep doing those so that you build fidelity with your customers. And then when you come out of the recession and recovery does come in, you blow your competitors away.

Speaker 4:
David, I’ve got a time for three final questions for you. We’re coming in rapid fire here. Um, when you were, uh, operating as the CEO and you guys were going it’s 2016, 15, 14, I, when you were really in a flow, what time did you wake up and how did you organize the first four hours of every day?

David Cote
Um, well, the only thing that was really the same, uh, every day, and that was only true if I was in the office, which was only about 50% of the time or those two extra large Dunkin donut copies. And that’s the guy, there you go on the, uh, uh, I would do my best to read, um, five newspapers. So I’d read the wall street journal. Then the financial times, then the, um, quickly, the New York times, then a USA today and then the New York post. And it gets easier, you know? Cause the news doesn’t tend to change all that much. So you can kind of fly through the, uh, the last three or four. And then I would begin with whatever the day it was. And it, it, one of the things I love about my job is it was never the same, every day was different. Yeah. Uh, I’d have to go from hour to hour. Subject changes, mood changes. It was actually, I love that part of it is a great job for somebody with partial add.

Speaker 4:
Now, Dave, Josh has one final question for you. I can get to golf quite a bit. Are you down in Florida, Dave? Is that what I heard the guys say you’re down there in Florida. Yes. So you get to play quite a bit.

David Cote
No, actually I’ve been so busy working between this book and my new company. Vertiv the data center products company that, uh, I really don’t have a lot of time to play it. I was finally getting to a point where I was going to join a club in COVID hit. Oh goodness. So I’m back from square one.

Speaker 4:
Hey, I can get you a free membership at the Meadowbrook country club in Tulsa. If you want to tell her that’s true, I’ll get you a free catty. I’ll get you a free, a free beverage. It plays pretty tight with chicken. You got to hit the ball straight down, but there’s no alligators on the courses. So says, Hey guys, speed golf. You’re done in 10 minutes. Usually somebody gets, somebody loses. So James, what’s your final question for this? This the CEO, the former CEO. Who’s grown a massive company, a lot of hands off. I mean, what, what’s your questions? Well, my question is, you know, it’s, um, it’s probably extremely stressful being in such a high level position. And so you have to not only hold people accountable, but you are responsible for just the massive growth of the company. So during that time you helping Honeywell grow. How often did you end a presentation or a sentence with the phrase? How do you like them? Apples?

David Cote
I never ended it with that one. That’s a great line from Goodwill hunting. But I would say that every year when I would gather our top 300 leaders together and I would do my wrap up pitch, they all knew my ending phrase was always going to be now, let’s get out there and kick some ass and they do. I was going to say that. And, um, it was one of those things they just waited for all the time.

Speaker 4:
Brother. I appreciate you so much for being on the show. Uh, I really do hope you get into speed golf here in the not so distant future. It really has a future, but it needs a great leader like you to lead the revolution, speed golf. Maybe it could be the CEO of speed golf. Oh,

David Cote
Well, anything that, anything that would make golf faster? I am all connected.

Speaker 4:
I agree with you there. I agree with you. Well, Hey David Kerr, we appreciate you so much. Hope you have a great rest of your day, sir.

David Cote
Thank you. It was fun. I said this was a little different than what I expected, but it was fun. Yeah,

Speaker 4:
We appreciate you. Wow. What a, what an incredible show that guy was actually fired by Jack Welch and then went on to become an Epic success story. Uh, thrive nation. I, it’s not about just learning knowledge. It’s about doing, we don’t want to be just hearers of these words. We want to be doers of these words. It is absolutely important that you listen to each and every show. When you ask yourself, what can I apply as a result of what, of what I have just learned? What can I apply as a result of what I’ve just learned? And now, without any further ado, we’re going to end this show with a boom. So here we go. Are you ready?