Drexler’s transformative impact came as no surprise to those who worked for him. Although he was known for his no-nonsense, blunt style, he commanded respect and admiration from everyone. Few worked as hard as he did, and his hands-on approach to driving growth, combined with his shrewd judgment and expert decision-making and trend-spotting ability, made him a great leader.

And yet, Gap fired Drexler in 2002 amid a decline in growth and revenues, prompting many observers to suggest that he was not the right leader to sustain Gap’s long-term success. Although Drexler moved on to become the CEO of J.Crew, where he doubled the company’s revenues and transformed the brand into a household name, he eventually stepped down from that job in response to declining sales as well—a repeat of the Gap story.

Although Drexler’s story is unique, it also shares something with all other leadership case studies: it is impossible to draw conclusions from a sample size of one person. And, whether a leadership fable is a success or a failure depends on where you put the ending.

—

The Life Cycle of a CEO— Claudius A. Hildebrand & Robert J. Stark

—

Introduction

In fact, Dave hadn’t been the first choice for the CEO position, or even the second or third choice. Word was five others had been offered the job before him. What’s more, a couple of years earlier he’d been unceremoniously fired from his position as divisional president at a leading competitor. No one would have suggested from his educational background, either, that he was CEO material. Not only did he not have a degree from an elite school, but it also took him six years to graduate. He hated college and he’d dropped out for a time.

As Dave’s first year in the CEO seat progressed, the sneering assessments of that Florida night prevailed on the Street; the company’s stock slid 40 percent.

Always be a step ahead in gathering and sharing bad news. As discussed in the next chapter, do that with the board and with investors, analysts, and really, all stakeholders. Your workforce will also resent being blindsided, as will community leaders regarding effects on their constituents. Dave Cote tells a powerful story of getting out ahead of bad news when he started at Honeywell in 2002. “I was hit almost immediately with a bombshell: our finance team informed me that we’d have to significantly reduce our earning commitment for the year.” He decided to lower the company’s earning projections, and then did so again within a few weeks when more information became available, even though, by his account, “analysts and investors already lacked confidence in me.” Over time, though, as he acted so forthrightly, they developed great confidence in him.

Consider Dave Cote’s fifteen-year run. It wasn’t until his tenth year that he finally gained widespread recognition for Honeywell’s remarkable turnaround. He knew from the start that the transformation of Honeywell he envisioned would take ten to fifteen years, and he committed himself to staying for the required duration— assuming, of course, that the board didn’t ask him to go. He had not underestimated the task before him.

That was the result of Cote’s marathoner “go slow to go fast” moves coming to fruition. Rather than flashy, highly risky, and dramatic moves, he’d made rigorously calibrated incremental improvements in business operations. These were combined with a steady stream of divestments and moderate acquisitions. Indeed, he is a standout example of someone who has mastered programmatic M&A, the systematic, highly strategic, and well-paced acquisition of relatively small companies compared the the size of the acquiring firm.