INDEX
A
A350XWB program, 67
AB Sciex, 98
ABC network, 12
Accountability, 23–24, 33, 45, 47, 189, 300
Accounting, 39–41, 133, 138, 163
Adamczyk, Darius, 144, 148–149, 307
Aerospace industry, 9, 51–53, 220–222
Aftermarket content, 98–99, 222–223
Air India, 54
Airbus, xxv, 9, 56–60, 67–68, 75, 222, 301
Allender, Pat, 90–93, 96, 105, 116
Alphabet (see Google)
Amazon, 2, 3, 23, 31, 295, 301
American Airlines, 67
American Standard, 243
Amersham, 32
Andreessen, Marc, xiii
Ansell, Jeff, 239
Apple, xii, 2, 3, 23, 31, 108, 236, 301, 309
Aramco, 180
Asset management, 144–145, 236, 308
Asset-sharing businesses, 276–278
Automotive parts industry, 285
B
Baker Hughes, 37
Barclays Bank, 42
Beckman Coulter, 98
Bell, James, 68
Benchmarking, xviii, 105–106, 109–110, 140, 170–171, 207, 299–303
Bendix, 147
Berkshire Hathaway, 196, 197, 267
Black & Decker, 245
BlackBerry, 301
Boards of directors, 30–31, 46, 165, 201–202, 243
Boeing, xviii, xxv–xxvi, 50–84, 135, 222
and aerospace industry, 51–53
and Airbus, 56–59
benchmarks at, 301
and CFM56 engine, 8–9
cost control and profits at, 68–70
disruption phase for, xiv, xxiv
early 2000s initiatives at, 59–62
hiring at, 291–292
labor negotiations at, 70–72
Kevin McAllister at, 76–77
Jim McNerney on, 65–66
Dennis Muilenburg at, 72–74
risk mitigation at, 66–70
737MAX crisis at, 78–82
787 Dreamliner at, 61–65
stakeholder relationships with, 74–76
Boeing Commercial Airplanes (BCA), 53–55, 66, 72–73, 76–77
Bombardier, 75
Bonsignore, Michael, 125–126
Bornstein, Jeffrey, 41–43
Bousbib, Ari, 164
Buckley, George, 289
Burritt, Dave, 184–185
Business development, 226–227
Business systems (See also Danaher Business System)
of industrials, xiv, xv, xxv, 282–287
and TransDigm, 216–217
at United Rentals, 265–266, 270
at United Technologies, 158–159
Butz, Albert, 121
Butz Thermo-Electric Regulator Company, 121
C
Calhoun, David, 81
Capital allocation, 228, 282, 296–297
Capital-intensive industries, 189, 260–261
Carrier, Willis, 154
Carrier Air Conditioning, 154, 156, 161, 163, 170
at Danaher, 91–92
at General Electric, 7, 29, 38–41
at Honeywell, 134–135, 147–148
at United Technologies, 168
Cash return on investment (CRI), 200, 206, 212
Castell, William, 32
CAT 777 truck, 177
CAT 797 truck, 176
Caterpillar (CAT), xxvi, 145, 174–194, 306
core business of, 176–178
factory disorganization for, 181–186
lessons from, 194
Doug Oberhelman at, 187–192
Jim Owens at, 178–181
CBS network, 12
Cepheid, 104
Cerberus Capital, 265
CFM56 aircraft engine, 8–9
ChemTreat, 98
Chênevert, Louis, 164–169
Chicago Pneumatic, 89
Chief executive officers (CEOs), 293, 307
Chief financial officers (CFOs), 105–106, 131–135
Caterpillar in, 180, 187, 189, 190, 193
Honeywell in, 136, 139, 141, 145–146
UTC competitors in, 163
Chubb Fire & Security, 160–161
Cisco, 36
Citigroup, 26
Collins, Jim, xx
Colvin, Geoff, 27
Compounding, xx, xxi, 282, 296–299, 305
at Honeywell, 134
at Stanley Black & Decker, 243
at United Rentals, 260, 270–271, 274–275
Condit, Phil, 54
Construction industry, 181, 187, 192, 268
Continuous improvement culture, xviii, 305–306, 308
for asset-sharing businesses, 278
and benchmarks, 302–303
and Caterpillar, 174, 182, 191
and compounding, 298
at Danaher, 90–91, 100–102, 107, 116, 286
at United Rentals, 260, 271–273
Core business, 22, 24, 176–178
Cost control, 68–73, 138–140, 163, 167, 239, 288, 305
Cote, David, 120, 126–132, 134–138, 140, 142–145, 147–150, 292, 307
COVID-19 (coronavirus) pandemic, xi, xii, xv, xx, 51, 81–83, 297, 303, 306
Creativity, of hires, 110–112
Crisci, Rob, 212
Crisis management, 127–128, 265
C-Series program, 75
Culp, Larry, 46, 94–102, 104, 105, 116
at Boeing, 52–56
at GE, 6, 15–16, 23–24, 30–33, 36, 43
of industrials, xviii–xix, 284, 294–296
at Stanley Black & Decker, 240, 253
at TransDigm, 229–230
at United Rentals, 265–267, 271–274
(See also Continuous improvement culture)
Cummins, 181
Customer focus, xix, 73, 286, 305
Cyclical industries, 174–178, 193, 201
D
Daily management, 100, 302–303
acquisition strategy of, 96–99
cash flow at, 91–92
CFOs’ impact at, 105–106
Larry Culp at, 94–96
DBS at, 107–110
early years at, 88–91
Fortive’s spin-off from, 112–115
hiring and onboarding at, 110–112
Tom Joyce at, 102–104
recruitment and retention at, 99–100
George Sherman at, 93–94
success factors for, 285, 286, 297, 299–302, 306
Danaher Business System (DBS), 86, 90, 93–100, 104, 105, 107–112, 117, 286
Danaher Production System, 90
Daniell, Robert, 154
David, George, 130–131, 154–159, 161–167, 307
Deloitte, 146
Department of Defense, 224
Department of Justice, 79
DeSimone, Livio, 289
Digital accelerators, 250–251
Disruption, xi–xiv, xviii–xx, xxiii–xxiv, 248, 249, 255, 287–289
DMG, 88
Dow Chemical, 143
Dow Jones Industrial Average, xv–xvi
E
Earnings, 24–30, 34, 38, 42, 133, 154, 157, 162–169
Edison General Electric, 3
Electrical Products Group (EPG) Conference, 41–42, 128–129, 155
Elster, 144
Embraer, 135
Emerson Electric, 145
Emmert, Mark, 28
Employee engagement, xx, xxi, 90, 111, 182, 191, 271
Employee Scholars Program, 164
Empowerment, employee, 89–90
Enders, Tom, 67
Ethiopian Airlines Flight 302 crash, 79
European Aeronautic, Defense, & Space Company (EADS), 58
EV1 model, xiii
Executive leadership team, 32, 33, 125–126, 135–137
Exponential Learning Unit, 250
Extant, 231
External hires, 107, 126, 128–130, 137, 189, 250–251
F
F series power turbine, 10
Facebook Workplace, 250, 253–254, 272
Facom, 237
FAST project, 268
Federal Aviation Administration (FAA), 79–81, 217, 225
Federal Reserve, 35
Fill rates, 243–244
Financial metrics, xxi–xxii
Financial News Network, 12
First-pass quality, 182–183
Flannery, John, 32, 37, 44, 46
Flannery, Matt, 261, 266–267, 271, 273
Ford, Henry, 283
Forecasting, 40, 176–178, 185, 190, 193, 306
Fortive, 86, 103, 104, 112–115, 117, 306
Fortive Business System (FBS), 114–115
Fracking, 180–181
Fradin, Roger, 135
Future, predicting, xii–xiii, xxiv
G
GE Capital, 13–15, 20–22, 24, 26, 30, 31, 35, 37–39, 42
Geared Turbofan (GTF), 169
Gen2 elevator, 162
General Electric (GE), xvii, xxv, 2–17, 20–48, 116, 145, 222, 246
accounting problems at, 39–41
after global financial crisis, 35–38
Alstom deal at, 38–39
and Boeing, 65
CFM56 aircraft engine for, 8–9
culture at, 30–33
disruption phase for, xiv, xxiv, 289
early days at, 3–4
earnings narratives at, 24–30
F series power turbine for, 10
failure of, 285, 295, 296, 301, 304–306
and GE Capital, 13–14
in Great Recession, 34–35
and Honeywell, 125–128, 137, 140, 143
Jeff Immelt at, 20–48
lessons from, xxvii, 17, 46–48
medical diagnostic equipment for, 11
NBC for, 12–13
and Stanley Black & Decker, 237, 239
and United Technologies, 154–157
General Motors (GM), xii–xiii, 164
Genworth, 30
GEnx engine, 65
Gillette, Rob, 135
Givan, Boyd, 54
Global financial crisis (2008–2009), xi, xix–xx, 2, 35–38, 43, 71, 148, 185, 192, 265
Google, xii, 2, 3, 23, 31, 301, 309
Governance, at Roper, 206, 208–212
Gray, Harry, 154
Great Recession, 34–35, 165, 181, 265–266
H
Hach and Lange, 94
Hamilton Standard, 156
Hayes, Gregory, 168–170
Hicks, Wayland, 265
Home Depot, 239
Honeywell, xvii, xxvi, 120–151, 222
Dave Anderson at, 131–135
after global financial crisis, 148
and AlliedSignal, 123–126
disruption phase for, xiv, xxiv
early years at, 121–123
executive leadership team at, 135–137
lessons from, 150
success factors for, 285, 286, 299–301, 303
talent management at, 292
turnaround at, 138–148
Honeywell Operating System (HOS), 120, 121, 128, 133, 137, 139–140, 286, 292
Honeywell User Experience (HUE), 141, 142
Howley, Nicholas, 220
Human resources (HR), 110–112
Humphrey, John, 273–274
Hunn, Neil, 212
I
Immelt, Jeff, xxv, 2, 3, 10, 20–48, 127, 131, 289, 295, 296, 301
Incentives, xix, 284, 288, 303–304, 306–307
at Boeing, 66–67
at Caterpillar, 193
and culture, 294–295
at Stanley Black & Decker, 244, 253
at TransDigm, 228–231
at United Rentals, 266–267
at UTC, 154–158, 164, 165, 168, 170
Industrial companies (industrials), 282–310
benchmarks for, 299–303
business systems of, 282–287
capital allocation for, 296–297
compounding for, 296–299
culture for, 294–296
disruption for, xii–xiv, xviii–xx, xxiii–xxiv, 287–289
lessons from analysis of, xiv–xviii
measures of success for, xx–xxiii
reinvention for, 299
risk management at, 303–305
success factors for, xviii–xx
talent management at, 290–293
Industrial Internet of Things (IIoT), 120, 149, 251
Industry 4.0 movement, 251–252
Initial public offering, TransDigm, 219–221
Innovation, xii, 61, 237, 246–250, 255, 287–289
Intelligrated, 144
Internal Revenue Service (IRS), 25
International Aero Engines (IAE) Alliance, 167
International Association of Machinists and Aerospace Workers (IAM), 55, 71
International Harvester, 179
Irwin, 237
Ismail, Alex, 135
Ito, Yuzuru, 158
ITT, 132
Iwata, Yoshiki, 89
J
Jacobs Engine Brake, 89–91
Joyce, Tom, 96, 101–104, 109, 116
K
Kaizen, 89, 105, 110, 114, 242, 271–274
Kampouris, Emmanuel, 243
Kenmore, 254
Kidde, 160–161
Kidder Peabody, 14
Kneeland, Mike, 261, 265–267, 269
Koenigsaecker, George, 89
KPMG, 46
Kramvis, Andreas, 135
L
Labor relations, 55, 66, 70–72, 139–140, 176, 179, 182
Leadership, 286, 292–295, 307–308
Lean manufacturing, 282–285, 301
and CAT, 174, 183, 184, 187, 189, 192, 193
at Danaher, xxvi, 87, 89–91, 97, 100, 107–110, 116
at Fortive, 114
at General Electric, 30
at Honeywell, 120, 128, 139, 140, 149
at United Technologies, 158–159
Lenox, 237
Lion Air Flight 610 crash, 79, 80
Loree, Jim, 236, 237, 239, 245–247, 254
Lowe’s, 239
Lundgren, John, 240
M
Mac (brand), 237
Mahoney, Tim, 135
Management, xii–xiv
at Caterpillar, 188–189
at Danaher, 111
at General Electric, 4, 6, 15, 23
at successful companies, 306–307
at TransDigm, 227
at United Technologies, 155
Market, for products, 145–146, 221–224
Market capitalization, for GE, 2–3, 45
Market share, xi, 4, 58–59, 183–184, 187, 212, 301
MasterShield, 88
Matsushita, 158
Maybury, Mark, 250
McAllister, Kevin, 76–77
MCAS system, 78–81
McDonnell Douglas, 53, 54, 56, 57
McGrew, Matt, 106
McKechnie Aerospace, 227–228
McNerney, Jim, 65–66, 68, 70–72, 131, 288, 289
Melius Research, 276
Merger and acquisition (M&A) strategy, xvi–xvii, 282–283
of Caterpillar, 174, 184–185, 189–190
of Danaher, 87, 91–92, 96–99, 101–103, 105, 106, 108, 109
of GE, 7, 11–14, 30, 32, 36–39
of Honeywell, 123–126, 133–135, 142–145
of Roper, 196, 199, 201–206, 208–210, 212
of United Rentals, 263, 269–271
Metrologic, 144
Mid-growth businesses, acquiring, 97–99
Milken, Michael, 92
Mining industry, 179–181, 192, 193
MITRE Corporation, 250
Mitsubishi, 37
Model S, 249
Model T, 283
Mohawk Rubber, 88
Monte, Mario, 16
Morgan Stanley, xix, 23, 24, 26, 28, 35, 129, 208
Muilenburg, Dennis, 72–75, 79, 80
Munger, Charlie, 267
Musk, Elon, 108
N
Nakao, Chihiro, 89
Narco, 147
National Football League, 302
National Pump, 270
NBC Universal, 7, 12–14, 23, 26, 28, 31, 33, 204, 306
Neptune, 202–203
Net Promoter Score, 30
New Midsize Airplane (NMA), 77, 80, 81
New Small Airplane (NSA), 67, 68
Norcross Safety Products, 144
Novar, 143
O
Oberhelman, Doug, 187–193
Onboarding, 110–112
Operating margin, 68–69, 138, 159, 223, 238, 239, 268
Operational excellence, 282–283, 288, 305
at General Electric, 15, 22–23, 30
at United Rentals, 262, 267–268, 273
Otis, Elisha, 154
Otis Elevator, 154, 156, 158, 161–164, 166–167, 169, 170
Outsourcing, 61–62, 66, 158, 239–240, 255
P
Pall Corporation, 104
Partnering for Success (PFS), 68–69, 74–75, 81
PFS-2 initiative, 74–75
Pierson, Jean, 56–57
Pittway, 135
Plummer, Bill, 269
Porsche, 80
Porter’s Five Forces analysis, 199
Post-it note, 287–288
Pratt & Whitney, 8, 9, 154, 156, 162, 164, 166, 167, 169
Pricing, 216, 224–225, 230–232, 267–268
Process-driven employees, 110–112
Product differentiation, 274, 283
Product Distribution Centers, 190–191
Product portfolio, TransDigm, 217–219
Product quality issues, 181–185
Product-focused businesses, 53–56
Production system, CAT, 181–185, 189
Productivity, 225–226
Profit margins, xvi–xvii
in aerospace aftermarket, 222–223
at Caterpillar, 183
at Honeywell, 142
at TransDigm, 229
at United Rentals, 275
at UTC, 155–157, 161–164, 168–170
Profitability, 226–227, 303–304
Profits:
at Boeing, 52–55, 68–70, 72–73, 77
at General Electric, 20, 21, 33
Proto, 237
Purpose, as driver of change, 254
R
Rales, Mitch and Steve, 86, 88–91, 93, 96, 101, 103, 115, 116
Recruitment, 99–100, 157, 291–292
Reinvention, 86–87, 107, 246–247, 253–254, 268, 299
Rental equipment industry, 260–263, 268
Research and development (R&D), 22, 24, 55, 64–65, 140–142, 161–162, 247–249
Return on invested capital (ROIC), 6, 91, 143, 300
Risk management:
at Honeywell, 133
at industrials, 303–305
Roberts, Brian, 28
Rolls-Royce, 167
Roman, Mike, 289
Roper Industries, xviii, xxvi, 196–213
disruption at, 289
early years at, 198–200
factors in success of, 297, 299, 306
governance model of, 208–212
Brian Jellison at, 198–208
lessons from, 213
M&A strategy at, 201–206
vision at, 206–208
RSC, 269
S
Safran, 9
SBD Operating Model, 256
Sears, 254–255
Securities and Exchange Commission (SEC), 2, 25, 32, 41, 265n*
7E7 program, 61
737 Next Generation (737NG) program, 54, 55, 60
737MAX crisis, xxv, 51, 70, 75, 78–82, 301
767 program, 60
777 program, 60, 67, 68, 70–71
777X program, 70–71
787 Dreamliner, 61–66, 68, 69, 71, 77, 81, 162, 166
Shareholder returns, xxi–xxii, 6, 8, 93, 96–97, 131, 196–197, 288–289, 305
Sherman, George, 93–94, 96, 116
Siemens, 37
Sikorsky, Igor, 154
Software companies, acquiring, 203–206
Southwest Airlines, 8
S&P 500 index, xii, xvii, xxvii, 6, 8, 93, 96, 131, 196, 197, 219, 289
SPEEA (union), 55
Spin-offs, 86–87, 112–115, 117
Stakeholder relationships, 66, 70–72, 74–76, 79–82, 136, 196–197
Stanley Black & Decker (SBD), xvii–xviii, xxvii, 93, 236–256
business system at, 240–242
and Chinese manufacturing, 238–240
and Craftsman, 254–255
creating change at, 253–254
disruption phase for, xiv, xxiv
formative years for, 237–238
Industry 4.0 movement at, 251–252
innovation at, 246–249
lessons from, 256–257
outside ideas at, 249–251
technology at, 246–249
Stanley Fulfillment System (SFS), 243–245, 248–249, 256
Stanley Ventures, 249–250
Stonecipher, Harry, 54–56
Sunbelt Rentals, 260, 261, 268
Sundstrand, 159–160
Suppliers, 68–70, 74–75, 221–222
SwissRe, 30
Swope, Gerard, 3
T
Talent management:
at Danaher, 97, 99–100, 110–112
at industrials, 290–293
at United Rentals, 274
Tech bubble (1999-2001), xix, 2, 29, 40, 137, 239
Technology, 246–249, 267–268, 276
Technology companies, xiv–xviii, 17, 308–310
benchmarks for, 301
Boeing’s lessons for, xxvii, 84
Caterpillar’s lessons for, 194
Danaher’s lessons for, xxvii, 118
GE’s lessons for, xxvii, 17, 46–48
Honeywell’s lessons for, 150
Roper’s lessons for, 213
SBD’s lessons for, 256–257
TransDigm’s lessons for, 233
United Rentals’s lessons for, 261, 278–279
UTC’s lessons for, 171
TechStars, 250
Tektronix, 101
Telemundo, 12
Thomas-Houston Electric, 3
Thomson, 11
Total Control system, 276
Toyota, 283
Toyota Production System (TPS), 89, 158, 284
TransDigm, xviii, xxvi, 216–233
business approach at, 230–232
culture at, 229–230
disruption at, 289
factors in success of, 297, 306
initial public offering of, 219–221
lessons from, 233
market for products of, 221–224
and McKechnie Aerospace, 227–228
product portfolio of, 217–219
value drivers for, 224–227
value maximization at, 228–229
U
Uber, xi, 261, 276–278, 308, 309
United Aircraft, 154
United Rentals, xxvii, 260–279, 309
acquisitions by, 269–271
business system of, 265–266
continuous improvement at, 271–273
formation and early years at, 263–264
lessons from, 276–279
operational expertise of, 267–268
and rental equipment industry, 260–263
United Technologies (UTC), xxvi, 8, 125, 131, 154–171, 222, 223
acquisitions by, 159–161
Louis Chênevert at, 164–165
earnings shortfall at, 166–168
and General Electric, 29
David George at, 307
Gregory Hayes at, 168–170
incentives at, 156–158
Lean manufacturing at, 158–159
lessons from, 171
margin expansion at, 161–164
United Technologies Aerospace Systems (UTAS), 169–170
UOP, 143
UTC 2020 review, 166
V
Value stream mapping, 251
Value-based pricing, 224–225
Velocity product development (VPD), 141
Venture capital funding, 247, 249–250
Videojet, 98
Vision, 24, 88, 128, 136, 137, 149, 206–208, 246
Vision Systems, 98
W
Waste Management, 263
Welch, Jack, xxv, 2, 4–16, 20, 22–24, 26–31, 36, 38–40, 43, 47, 124, 127, 140, 141, 154–155, 239, 307
Wendt, Gary, 13
WeWork, xi, 25, 276, 295, 308, 309
Woodard, Ron, 54
WorldCom, 45
X
XPO, 263