Bossidy

No Room for 'Doubt' in the Vocabulary of a Good Leader

IW Manufacturing Hall of Famer Larry Bossidy: When you launch a major initiative such as lean or Six Sigma, 'there's no turning back.'

Larry Bossidy "grew up in business," learning the basics of sales and other fundamentals as a young boy while working at his parents' shoe store in Pittsfield, Mass.

But it wasn't until Bossidy became a top executive at General Electric in the 1980s that "the seed of manufacturing took root in a significant way," he recalls.

"As you remember, the U.S. was being challenged by the Japanese in terms of manufacturing efficiency, and we were looking for ways to improve our manufacturing operations," Bossidy says, noting that during his time at GE, "We spent a lot of time trying to make sure that our factories were competitive."

Larry Bossidy: "If I had a doubt about Six Sigma, and that doubt became apparent, it wasn't going to work."

After a 34-year career with GE -- where he'd been Jack Welch's second in command since 1984 -- Bossidy became chairman and CEO of AlliedSignal in 1991. Applying what he learned at GE, Bossidy championed lean and Six Sigma at AlliedSignal, restructured the company and eventually shepherded AlliedSignal through a merger with Honeywell.

And the rest, as they say, is history.

As we gear up for the announcement of the IndustryWeek Manufacturing Hall of Fame's 2011 class in December, we're sharing previously unpublished excerpts from interviews with past Hall of Fame inductees.

In this Q&A, Bossidy shared some of his thoughts on his career, leadership and the future of U.S. manufacturing.

IW: Of your achievements at AlliedSignal, which ones make you the proudest?

LB: The stock [price] increased sevenfold in my tenure; I was proud of that.

I was named CEO of the year twice. As you know, that's not as much about me as it is about the company and the people I was working with. We were able to attract a lot of talent, because people believed in the story that we were telling and the progress that we were making.

We became a more global enterprise. And so we had a lot of distinction in the AlliedSignal days, and those are some of the highlights that I most remember.

IW: During your career, what did you learn about the cost-saving opportunities that exist on the factory floor?

LB: Well they're just enormous.

If you really look at manufacturing in the right way, and you take a look at it cell by cell if you will, and you redeploy the cell in the most efficient way, the savings are just remarkable. And the savings come from higher quality.

And so I thought [lean and Six Sigma] made a big difference in terms of my perception of things. But more importantly, the reputation and experience of the company improved enormously.

IW: In your time at GE and Honeywell, what did you learn about leadership?

LB: In the manufacturing segment, for example, you can't do these things [introduce lean and Six Sigma] if you have doubt. If I had a doubt about Six Sigma, and that doubt became apparent, it wasn't going to work.

When you take on an initiative of this dimension, good leadership means you have to understand it yourself first, and you have to convince yourself that it's the right thing to do -- because frankly when you announce it, there's no turning back.

... So you have to train the people, and you have to live with some of the disagreement that exists when it starts, and continue to persevere. And that takes the leader to do that -- not just manufacturing people, but the CEO as well.

And ultimately at Allied Signal, I said, 'Look, we're going to do this with you or without you, so you better get on the ship.' And I think that convinced some doubters.

Once you begin to see the benefits, then everybody joins.

But it's not easy to launch initiatives of this magnitude, and you have to persevere, as opposed to giving up the game at the half.

IW: How big of an influence was Jack Welch for you?

LB: I worked for 12 years with Jack Welch at GE. I thought he was a terrific guy, and he certainly helped me form some of my thoughts in terms of business. He was a great friend then and he continues to be a great friend.

Specifically, he spent a lot of time on people, making sure he had the right people. [From Welch] I learned regardless of what we were doing to stop and ask, 'Do I have the right people to get this done?'

IW: Are you bullish or bearish on the future of U.S. manufacturing?

LB: We're not going to be able to compete with higher-labor-content products. But I am hopeful that with industries that build equipment with high-technology needs, and a relatively low labor content, that we can continue to excel in the United States in manufacturing.

And then I also hope that we can redefine the role between business and labor.

In other words, I don't blame labor for taking us out of some of these markets because of cost -- those agreements were signed by both labor and management. But with the unemployment that we have now, there needs to be a redefinition of the playing field.

And we've got to have labor costs that are more competitive than what we have now. I'm convinced that with the number of unemployed laborers, even if you brought them back at reduced prices -- in other words at lower rates -- they'd line up around the corner in order to get a job.

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