George David: A Sailor’s Approach to Business Leadership
I admit it… I’m biased. I like the way sailors think.
Every organization is a manifestation of its leadership. Strong leaders tend to
create strong organizations. And bad leaders, of course, tend to create the opposite.
The characteristics of every organization reflects the characteristics of the people
at the top.
George David, the Chairman and CEO of United Technologies Corporation, is one such
strong leader who sets the bar high for his organization and has produced great results
year after year. I have heard Mr. David speak several times on television (most recently
on CNBC’s Squawk Box on December 14, 2006). He is a strong public
speaker and is universally viewed by Wall Street as a driving force behind UTC’s
run of success.
Over the last three years we have formed some opinions about Mr. David’s
leadership, based in part on our work within UTC, and all of which is supported by
his public appearances and the long-term performance of the company stock. Here are
a few observations worth sharing with you:
1. He drives the strategic plan down into the organization. Despite
UTC’s size (approximately 220,000 people), junior employees know about and
understand the details of specific initiatives driven down from the top. The initiatives
are clear and they are understood, which means they have a high probability of being
executed.
2. He is a savvy tactician. In 2000-01, UTC
was scheduled to purchase Honeywell. Eventually Jack Welch and GE jumped in and outbid
UTC. But rather than get into an ego-driven bidding war, Mr. David walked away from
the deal, which proved to be a disaster for GE as the European Commission eventually
scuttled it for antitrust reasons.
3. He speaks clearly. Mr. David can capably
weave a discussion of his company’s issues and performance into a discussion
on any aspect of global economics. He understands the macro and the micro, and can
discuss either thoughtfully and articulately.
4. He supports his people. UTC annually spends
enormous resources on its “Employee Scholar Program,” an initiative that
comes straight off the desk of Mr. David. Under this program, any UTC employee may
pursue continuing education. UTC picks up the tab, and offers incentives such as
stock awards to those who successfully complete their degree.
5. The stock price tells the story. Let’s
compare UTC’s performance under Mr. David to another well-known and successful
Connecticut-based company, GE. On December 30, 1994, UTC’s stock price closed
at $7.86/share. GE closed slightly higher at $8.50/share. As of this writing, UTC’s
share price is $62.76 vs. $37.77 for GE (both prices as of December 21, 2006) – double
the financial return. Tough to argue with those numbers.
Perhaps my admiration of Mr. David’s leadership stems from the fact that
he is also a successful sailor. Readers of The Beacon know the role that
sailboat racing plays in my life. As a sport, sailing teaches a strategic and tactical
decision-making framework that serves well in the business world, and Mr. David clearly
applies such a framework to his business life.
We’ll close with a quote from Mr. David himself: "Sailors often
call for a delay in responding to changed conditions on the race course. A shift
may not last, or a building breeze may drop in velocity. The same is true in business.
It's often better to take the time to be sure or to let your judgment season..."
Great
leadership, indeed… He is a first-class leader in and out of corporate
boardrooms, on and off the water.
• Dean M. Brenner
 Beacon Issue -
January 2007
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