When Lewis Campbell was named CEO of Textron Inc. (IW 500/100) in July 1998, the industrial conglomerate seemed to be on a roll.
Textron -- whose portfolio of companies includes Bell Helicopter, Cessna Aircraft and E-Z-Go -- was in the midst of a 40-quarter run of year-over-year net-income or earnings-per-share improvement. Beginning in May 1999, when its stock peaked at $98 per share, Textron recorded six consecutive quarters of year-over-year EPS growth of more than 15%.
"My birthday is in May, and I remember thinking to myself, having been CEO for about a year, 'Gosh, this job is great. It's not going to get any better than this,'" Lewis recalls.
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Lewis had no idea how right he would be. By late 2001, Textron's stock had dropped to around $30 per share, operating income was deteriorating and it had become clear that Textron's EPS-focused business model -- which was the catalyst for a slew of ill-advised acquisitions -- wasn't working.
That perfect storm, however, set the stage for one of the most impressive corporate transformations in modern manufacturing history.
Under Campbell's leadership, Textron shed non-core businesses -- most notably its automotive-trim unit in 2001 -- and restructured the company to take advantage of common processes and shared services. Campbell and top managers also decided that return on invested capital -- not earnings per share -- should be the company's key financial metric.
In 2002, Campbell launched a companywide continuous-improvement program -- Textron Six Sigma -- which, Textron says, "has become part of the very fabric of our company." Today, more than 95% of Textron's global leadership team has attained green-belt certification.
A mechanical engineer by trade, Campbell joined Textron in 1992 as COO after a 24-year career with General Motors Co. (IW 500/4). He retired from Textron in 2009, only to be lured out of retirement in August 2012 by commercial-truck maker Navistar International Corp. (IW 500/86).
"You're going to be amazed at the progress you see at Navistar," Campbell says. "It's a company that I think you'll see turn the corner much more rapidly than most people would guess."
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