Winning Now, Winning Later Quotes

“Three Principles of Short- and Long-Term Performance 1.​Scrub accounting and business practices down to what is real. 2.​Invest in the future, but not excessively. 3.​Grow while keeping fixed costs constant.”
― David Cote, Winning Now, Winning Later: How Companies Can Succeed in the Short Term While Investing for the Long Term

“My Dad used to say that if every man just took care of his own family, the world would be a much better place.”
― David Cote, Winning Now, Winning Later: How Companies Can Succeed in the Short Term While Investing for the Long Term

“Understand the significance of mind-set and culture. If the mind-set doesn’t change, operations won’t change either.”
― David Cote, Winning Now, Winning Later: How Companies Can Succeed in the Short Term While Investing for the Long Term

“they don’t need to love you. Do your best to address their concerns, be consistent in your messaging, and have faith they’ll come around eventually. If you move seriously to resolve these issues, and if you do it in a smart, disciplined fashion, they’ll eventually notice.”
― David Cote, Winning Now, Winning Later: How Companies Can Succeed in the Short Term While Investing for the Long Term

“Work, too, on the quality of your own thinking. Carve out the time you need for blue book sessions, and make use of the other techniques I’ve described. Challenge yourself to reflect on your business or organization. And challenge yourself to think independently. Remember, smart leaders abound, but leaders who can think independently are rare.”
― David Cote, Winning Now, Winning Later: How Companies Can Succeed in the Short Term While Investing for the Long Term

“You don’t need to be a twit in articulating these expectations, and you shouldn’t ask people to do the truly impossible. But you do need to request the seemingly impossible, putting it to them in a kindly way and even with a sense of humor. It is possible to overdo it, as I have on occasion. On balance, though, organizations, people, and leaders would do well to be much more demanding of themselves than they are. Whatever you do, stay hungry. Investors often asked us what would cause us to miss our numbers, thinking I would name some industry or economic issue, but I always gave the same answer: “If we ever lose our hunger.” That hunger starts with the leader.”
― David Cote, Winning Now, Winning Later: How Companies Can Succeed in the Short Term While Investing for the Long Term

“We decided to boil our list down to just a few key criteria around which we could easily evaluate candidates. We settled on six: •​An intense desire to win: We didn’t want a new CEO who was adept at explaining why something didn’t happen, but rather someone who could figure out how to win even if unanticipated problems cropped up. •​Intelligence: We wanted someone smart and analytical who could avoid problems before they arose. •​The ability to think independently: Fad surfers need not apply. •​Courage: My successor had to be capable of making bold decisions, while also checking afterward to verify that these decisions were correct. •​Curiosity: We needed a CEO who could stay fresh over time by exposing him or herself to novel ideas—someone who was self-aware and dedicated to learning. •​An ability to motivate and build a strong culture: Our next CEO had to be able to mobilize the company behind the strategy, hiring great people and motivating them.”
― David Cote, Winning Now, Winning Later: How Companies Can Succeed in the Short Term While Investing for the Long Term

“Joseph L. Bower’s The CEO Within, which argued for choosing leaders inside the company to serve as CEO. According to Bower, you wanted a special kind of insider: someone who intimately understood the company and its operations, but who could also maintain a sense of distance and understand what about the company needed to change—an outsider’s perspective from someone on the inside.”
― David Cote, Winning Now, Winning Later: How Companies Can Succeed in the Short Term While Investing for the Long Term

“A fourth way to take control of the downturn is to maximize the cash available to you. Cash is always a good friend to have, especially during the tough times.”
― David Cote, Winning Now, Winning Later: How Companies Can Succeed in the Short Term While Investing for the Long Term

“Understanding the important role played by leaders, we made sure, as I’ve noted, to keep our annual senior leadership meeting intact, even as we were cutting labor costs. The event wasn’t as nice as in previous years, but we needed it so that we could convey to leaders our general thinking about continuing to serve customers, protecting our talent base, and so on. We also needed to acknowledge how bad the recession was and reinforce that this wasn’t permanent—good times would return.”
― David Cote, Winning Now, Winning Later: How Companies Can Succeed in the Short Term While Investing for the Long Term

“I asked our business leaders in the depths of the recession to begin working with their suppliers to prepare for the recovery. This seemed impossible to leaders at the time, since many economists and some of my staff were predicting that we’d see an L-shaped recovery—one that was essentially nonexistent. Our sales, according to this view, would never rebound to their prerecession levels. I insisted that recovery would come, just as it always had in the past. And when it did, our short-cycle businesses had to make sure they were first in line for supplies. Our leaders began these conversations, working with suppliers up front to lock in first priority over our competitors when the recovery came. This represented independent thinking on our part—our competitors weren’t doing this. We also took the opportunity to negotiate better payment terms, price reductions, and long-term deals, which were all easier to obtain during a recession. As a result of this effort, we got a big lift as the economy improved, outpacing our competitors in our sales growth, to the delight of our investors.”
― David Cote, Winning Now, Winning Later: How Companies Can Succeed in the Short Term While Investing for the Long Term

“Nobody likes recessions, but as our experience proves, they don’t have to destroy the foundations for long-term growth you’ve laid. The key is to stay calm while everyone else is panicking. Remember, as I’ve said, recessions are temporary. Good times will return eventually. As a leader, you have to think about the recovery and what your organization will need to perform. Don’t cut all of your growth investments just to get the best possible shareholder returns. Do everything you can not to cut them, delivering returns that are good enough to keep investors reasonably happy. By taking control of the downturn in this way, you can maintain all of the investments you’ve made in your business up to that point, and keep your ability to perform over the long-term intact.”
― David Cote, Winning Now, Winning Later: How Companies Can Succeed in the Short Term While Investing for the Long Term

“one of the leader’s most valuable but least valued contributions is avoiding trouble, not addressing it once it’s occurred).”
― David Cote, Winning Now, Winning Later: How Companies Can Succeed in the Short Term While Investing for the Long Term

“Bob Rubin’s book In an Uncertain World. Rubin had argued that many outcomes are possible in a given situation, and you have to anticipate and prepare for eventualities that seem unlikely but that could prove extremely damaging should they materialize”
― David Cote, Winning Now, Winning Later: How Companies Can Succeed in the Short Term While Investing for the Long Term

“Leaders often panic when recessions strike. They go into survival mode, managing quarter-to-quarter and shoring up their numbers by cutting back on the long-term growth projects we’ve described in previous pages. Such actions might please investors in the moment, but they undo hard-won progress the organization has made. This is a big mistake, and one thankfully we avoided. By looking for creative solutions to the financial challenges we faced during the Great Recession, we maintained our investments while still delivering results that outdid our competitors’ performance.”
― David Cote, Winning Now, Winning Later: How Companies Can Succeed in the Short Term While Investing for the Long Term

“I had felt compelled to write this letter because we had emerged from the Great Recession of 2008 in great shape, outpacing our peers and also Honeywell’s historical performance during recessions. While the experience was still fresh, I wanted to capture my reflections on how we had done it, in the hopes that my successors would have an easier time dealing with similar situations in the future and wouldn’t have to waste time learning what we’d learned. If you haven’t written such postmortem analyses (or white papers, as we called them) for your organization, I strongly suggest it. As we saw in chapter 1, intellectual rigor is vital for organizations seeking to perform well today and tomorrow, and leaders are uniquely positioned to establish and maintain that rigor.”
― David Cote, Winning Now, Winning Later: How Companies Can Succeed in the Short Term While Investing for the Long Term

“Regarding a prospective company’s position in its industry, think hard about whether you might roll up multiple players in a fragmented industry to create a juggernaut. When we entered the gas detection business, there were no big players, but over an eight-year period we were able to acquire several companies, roll them up into a single Honeywell business, and become number one in the industry.”
― David Cote, Winning Now, Winning Later: How Companies Can Succeed in the Short Term While Investing for the Long Term

“Three Questions to Ask of Each Business in Your Portfolio 1.​Is it in a good industry? 2.​Does it occupy a great position in that industry? 3.​Does it deliver a strong ROI?”
― David Cote, Winning Now, Winning Later: How Companies Can Succeed in the Short Term While Investing for the Long Term

“To Bring Acquisitions into the Fold . . . •​Put integration plans in place before the deal closes, covering management, metrics, and other relevant topics. •​Personally review and approve the plan. •​Tighten up the executional details. •​Put dedicated, full-time integration teams in place, and assemble these teams early. •​Make changes and communicate them immediately to shape the mind-set. •​Stay alert for processes in acquired companies that you like, and introduce them as innovations into your own company. •​Personally perform regular follow-up to ensure that the acquisition really is performing even better than predicted by the valuation model.”
― David Cote, Winning Now, Winning Later: How Companies Can Succeed in the Short Term While Investing for the Long Term

“To Never Overpay . . . •​Develop a standardized valuation model of your own. •​Use your own estimates of sales and margins. •​Factor in anticipated cost savings, but not sales synergies. •​Value acquisitions conservatively and walk away if the deal becomes too rich. •​Don’t let the dealmakers negotiate the terms. •​Exercise final oversight, exploring the downsides and scuttling the deal if you risk overpaying. •​Maintain a great pipeline of potential deals so that no single deal seems like a must-have.”
― David Cote, Winning Now, Winning Later: How Companies Can Succeed in the Short Term While Investing for the Long Term

“In framing our new M&A process, we resolved to maintain a clear separation between our dealmakers and our deal-negotiators. After a business leader had cultivated a company for acquisition, he or she would turn the deal over to our corporate M&A department, which would negotiate the contract based on the results for the acquired company that our business unit would commit to delivering. Sometimes our business units disagreed with how our corporate people were handling a deal—our business leaders just wanted it done, and they had developed personal relationships with the sellers. Our corporate M&A team negotiated more dispassionately, assuring that we really didn’t overpay, even if it meant getting tough and walking away. In deal after deal, that made all the difference.”
― David Cote, Winning Now, Winning Later: How Companies Can Succeed in the Short Term While Investing for the Long Term

“If you have a great strategy but overpay for a company, someone else’s shareholders will see the benefits of your strategy, not yours.”
― David Cote, Winning Now, Winning Later: How Companies Can Succeed in the Short Term While Investing for the Long Term

“Overall, the handbook focused us on trying to disprove our assumptions about a business and thus avoid falling into the trap of confirmation bias.”
― David Cote, Winning Now, Winning Later: How Companies Can Succeed in the Short Term While Investing for the Long Term

“We created a corporate handbook that each business unit had to follow when performing due diligence on a potential acquisition.”
― David Cote, Winning Now, Winning Later: How Companies Can Succeed in the Short Term While Investing for the Long Term

“To Build a Robust Pipeline . . . •​Don’t wait for bankers to knock on your door with potential deals. Instead, scour the market proactively. •​Seek out businesses that have great positions in good, high-growth industries. •​Look for bolt-on acquisitions as well as companies in good industries adjacent to yours. •​Not all perceived adjacencies are the same. If the adjacency is too far removed from your existing business, you will lose your shirt. •​Make identifying targets a day-to-day priority. •​Be patient. Nurture long-term relationships with potential acquisitions.”
― David Cote, Winning Now, Winning Later: How Companies Can Succeed in the Short Term While Investing for the Long Term

“While at General Electric, I’d noticed firsthand what a big difference it made to be in a good industry. When I ran General Electric’s major appliance business, we had a great position but were in a crummy, highly competitive, low-growth industry. No matter how hard we worked, we stood little chance of excelling—the pressure on prices was just too intense. It was far easier, I found, to make progress with a business that occupied a bad position in a good industry.”
― David Cote, Winning Now, Winning Later: How Companies Can Succeed in the Short Term While Investing for the Long Term

“We never minded paying a fair price, but overpaying was anathema to us—and it should be to you.”
― David Cote, Winning Now, Winning Later: How Companies Can Succeed in the Short Term While Investing for the Long Term

“Over the next six months, we discovered the company had been pursuing deals in an ad hoc, opportunistic way, struggling in four key areas: identifying which companies to acquire, performing due diligence on these companies, calculating their value, and integrating acquisitions into our business. Taking stock of our deficits led us to a powerful, four-step model for pursuing M&A,”
― David Cote, Winning Now, Winning Later: How Companies Can Succeed in the Short Term While Investing for the Long Term

“Today, almost half of our engineers company-wide are developing software—a massive change from years past.”
― David Cote, Winning Now, Winning Later: How Companies Can Succeed in the Short Term While Investing for the Long Term

“We also changed our recruiting practices to improve our digital talent pool. Formerly, we had sought out digital talent from the best, name-brand colleges and universities. Now we focused on attracting members of a small subset of elite programmers who were capable of producing ten times the output of the typical programmer. To attract these premier programmers, or “multipliers” as we called them, we began evaluating potential hires on specific skills related to programming, collaboration, and teamwork, observing their actual behavior rather than just relying on their academic record. We took a similar approach to hiring data scientists as well. Our efforts in this area helped us significantly up our game as we developed software as a business and incorporated it into more of our existing products.”
― David Cote, Winning Now, Winning Later: How Companies Can Succeed in the Short Term While Investing for the Long Term