Turning around Honeywell

May 9, 2012 | By More

Honeywell's iconic "The Round" model T87 thermostat. There is one in the Smithsonian.

Honeywell is perhaps best known in households and offices for their ubiquitious round ‘Honeywell thermostat’. As a household name (in the US and elsewhere), the company was also part of the Dow Jones Index (DJI) from 1925. In 2008, after years of loosing its way to become one of America’s most messed-up company, they were removed from DJI.

As The Economist reported in its April 14th 2012 issue, Honeywell International has today become one of its best.

How did they do it? And what can we learn from them?

The change did not come overnight. It began with the appointment of a new boss, David Cote, in 2002 who instituted as series of changes. Here is a summary:

David Cote, Chairman & CEO of Honeywell

  • Rather than focusing on values, he identified 12 “behaviours” he wanted to see throughout the company such as customer focus, self-awareness and championing change;
  • He concentrated on businesses that had strong growth potential, and ‘offloaded’ weaker ones;
  • Recognising that the company had not been good at ‘execution’, he implemented programs to improve productivity such SixSigma, Lean Manufacturing and Just-In-Time techniques, which was first piloted, and tweeked in a few plants before deploying broadly in all factories;

Basically, David Cote had to change how Honeywell employees and management do their jobs – and this ‘continuous improvement’ took over a period of 8 years! Today, the factories makes more stuff, generating more revenue with essentially the same headcount, area and energy consumption.

Founded in 1906, Honeywell is headquartered in Morristown, New Jersey, USA.

 

Lessons for entrepreneurs anywhere:

  1. The right leadership is key to a company’s success.
  2. Don’t spread yourself thin – focus on business with strong potential.
  3. Make sure your team knows what they have to do, and why – from the start.
  4. Fixing a broken system takes time, and effort!

 

Read here for the whole story from The Economist.

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About the Author ()

EngTong, pioneer and innovator. Graduated from Imperial College London with an MBA from Cranfield School of Management. Lived in Scotland, England, California, Beijing and led teams in Italy, France, Japan, Taiwan and Malaysia to do the impossible. Now based in Singapore and believes the future is to blend the sophistication of western management practices with the strength of Asian Values. Trained as a Chartered Engineer. Member of IET, Associate of City and Guilds and a certified SixSigma Champion.

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