It took the leadership of a new CEO, Bob Miller, to save the company. Commenting on how he successfully pulled the company out of its malaise to a prominent position in the RISC Technology industry, Miller malaise to a prominent position in the RISC Technology industry, Miller commented:

The most important question is: what do you want to be five to ten years from now? The company had never asked or clearly answered that question. That may seem simplistic, but posing that question was the basic solution. Only then could we make good strategic decisions.

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

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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.

Dave is Dave Cote, who at the helm of Honeywell achieved on of the most impressive company turnarounds of any CEO in the twenty-first century. In his sixteen years in the job, from 2002 to 2017, he took the company— deemed “unfixable” by one leading analyst— from the brink of disaster to a share price rise of 245 percent. That’s compared to 115 percent for the S&P 500 during the same period. As for the company he was booted from, that was General Electric. Cote was fired by legendary GE CEO Jack Welch after Welch appointed Jeffrey Immelt as his successor.

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.

The merit of getting to know prospects to choose a good successor was evident in Charles’ case. He’d risen to the top of the heap of candidates through a long and rigorous process during which the board had gotten to know him well. They’d been presented with a wealth of information about his accomplishments and leadership talents, and they felt confident he was right for the job. But then he totally whiffed his interview with them by showing up in the manner of a direct report rather than speaking to the directors as a peer. He didn’t come across as the authoritative leader they could rely on to be forceful with them or to make the tough calls and bold moves that would take the firm where it needed to go. They were really taken aback, and they began to reconsider an external candidate.

But all that they had learned about Charles over the prior five years ultimately prevailed. Because of the experience they had with him, they agreed when we urged them to give him another chance to present. We gave him feedback and shared what the board had said about his prior performance before them. He took the feedback well and returned very much as the in-command CEO the board wanted to see. This ability to take feedback and adapt gave them even more confidence that he would continue to grow once in the role. Charles was appointed and has had a highly successful tenure.