President, chief executive officer, and chairman, Honeywell International
Education: University of New Hampshire, BS, 1976.
Family: Married twice; children: two from first marriage, one from second marriage.
Career: General Electric, 1974–1976, factory laborer; 1976–1996, manager; 1996–1999, senior vice president, president and CEO of Appliances; TRW, 1999–2001, president and COO; 2001, president and CEO; 2001–2002, president, CEO, and chairman; Honeywell International, 2002, president and CEO; 2002–, president, CEO, and chairman.
Awards: Honorary Juris Doctor, Graziadio School of Business at Pepperdine University, 2001.
Address: Honeywell International, 101 Columbia Road, Morristown, New Jersey 07962; http://www.honeywell.com.
■ In a speech at Pepperdine University in April 2001, David M. Cote outlined four areas in which businesspeople should focus: recognizing the importance of people and one's own behaviors; getting out of one's comfort zone; having goals and being results oriented; and enjoying life. Cote's success in managing people may have stemmed from his understanding the needs of others. His shifting from tough job to tough job certainly reflected his continuous desire to extend beyond his comfort zone. Throughout his career, he developed a reputation for being very goal oriented. As for happiness: as a driven man, devoted to performance, he derived profound enjoyment in meeting and overcoming challenges.
When he graduated from high school, Cote seemed to have no goals, belying the driven temperament that would eventually propel him to the apex of his profession. He decided to skip university, instead using his college money to buy a car, and worked as a manual laborer; after a couple of years he realized that he would not excel in that field. Thus, he entered the Wittemore School of Business at the University of New Hampshire. His studies were protracted by his full-time night job in a General Electric jet-engine manufacturing plant, as well as by a period during which he also purchased a boat with a friend and worked as a lobster fishermen. He graduated from college after approximately six years.
After receiving his bachelor's degree in business administration, Cote worked as a manager in the consumer-electronics, jet-engines, and plastics divisions at General Electric. The company was noted for its goal-oriented style of operations, and Cote readily absorbed its management doctrine. In 1996 the business world learned what upper management at General Electric seemed to already know—that Cote was an innovator who could aptly refine the company's business practices, cutting costs and improving sales. That year, he was named corporate senior vice president and also became the president and CEO of the $6 billion Appliances division.
Cote soon became the leader of General Electric's "smart bomb" technique for generating sales in Asia. Instead of creating a marketing plan for the entire continent, he formed bubble teams of sales representatives, engineers, and cultural experts to study each Asian nation individually, with the teams eventually creating bundles of appliances suited to the cultural groups of each individual nation. General Electric Appliances registered profits of about $100 million in each of the years Cote ran the division, and other General Electric divisions copied the "smart bomb" techniques. Cote also led one of General Electric's first joint-venture efforts, forming a partnership with Culligan to manufacture refrigerators with built-in water filtration. In what would be a hallmark of his management, Cote streamlined the appliances division by emphasizing the specific goals that needed to be achieved.
When it became evident that Cote would not be the one to replace the retiring CEO Jack Welch, Cote looked elsewhere for new challenges, eventually finding them at TRW. In November 1999 he became TRW's president and COO, with the understanding that he would replace the CEO Joseph Gormanin 2001. At TRW, Cote introduced the Six Sigma management system, a doctrine that focused the production process on reducing defects in products to less than 3.4 per million opportunities; "opportunities" were defined as occasions when a defect could occur, and "defects" were defined as any results outside of customer specifications. As a whole, the Six Sigma system made the manufacturing process especially responsive to customer needs.
In February 2001 Cote became CEO as well as president of TRW; in August 2001 he added chairman of the board to his title. Cote led the creation of the TRW subsidiary Velocium, which manufactured ultra-high-speed semiconductors and was just beginning to make itself felt in the marketplace when Cote departed from TRW.
Honeywell International had earlier tried to merge with General Electric, only to have the merger rejected by antitrust authorities in the European Union; having reorganized to become part of General Electric, the company had trouble reorienting itself to remaining an independent entity. The former chairman Lawrence A. Bossidy was brought in to save Honeywell from collapse, and when he retired for a second time he selected Cote to be his replacement.
On February 19, 2002, Cote was named president, CEO, and a member of the board of directors for Honeywell. On July 1, 2002, Cote was elected chairman of the board after Bossidy retired. Cote had his hands full: although Honeywell grossed $24 million in 2001, the company faced mounting debts, settlements for lawsuits stemming from employees' exposure to asbestos, a stock that would fall 31 percent in 2002, and demoralized management. Cote knew that running the huge company, with 115,000 employees in 95 countries, would prove challenging. He quickly applied his goal-oriented management philosophy to Honeywell, making cash, growth, people, productivity, digitization, and Six Sigma the focuses of his administration.
Honeywell lost $220 million in 2002, partly because of asbestos-suit payouts, the purchase of the sensors business Invensys for $416 million, and slow sales. However, by selling other Honeywell units and cutting costs—partly by sending some American jobs abroad to Romania and Singapore, where labor costs were lower, and partly by reducing defects in production—by the end of 2003 Honeywell had amassed about $2 billion in cash reserves. Cote was heavily criticized in the press for the $32 million in compensation he received in 2002, although he explained that the amount was intended to cover options that he had lost at TRW as a result of moving to Honeywell.
See also entries on TRW Inc. and Honeywell Inc. in International Directory of Company Histories .
Barrett, Amy, "In the Credibility Penalty Box: Can Honeywell CEO Cote Restore Investors' Confidence?" BusinessWeek , April 28, 2003, p. 80.
Cote, David M., "Keynote Commencement Address: The Graziadio School of Business and Management," Pepperdine University, April 14, 2001, http://www.pepperdine.edu/PR/NotableSpeeches/cote.htm .
Grant, Linda, "GE's Smart Bomb Strategy," Fortune.com , July 21, 1997, http://www.fortune.com/fortune/subs/article/0,15114,380002,00.html .
Murphy, Tara, "Honeywell's New CEO Is the Right Man," Forbes.com , March 5, 2002, http://www.forbes.com/2002/03/05/0305bigcap.html .
—Kirk H. Beetz