1: Having foresight is the “lead” in “leader,” Robert Greenleaf once wrote in The Servant as Leader.
It was the late 1990s. It was an analog world. But Ed Breen, then CEO of General Instruments, could see the future. And the future was digital.
“I’d just been made CEO the year before,” Ed remembers in Carolyn Dewar, Scott Keller, and Vikram Malhotra‘s terrific book CEO Excellence, “and I’m sitting there amazed, thinking, ‘No one else has figured out to build a digital set-top box yet.”
The technology to connect televisions to cable did not exist and would be costly to develop.
But Ed was confident. He put 80 percent of the company’s R&D toward finding a solution.
“The investment paid off: GI was the first out of the gates with a digital box,” Carolyn, Scott, and Vik write.
New issue. The digital set-top box technology would be expensive to produce.
“Like with any electronics product, we needed volume to get the cost of the components down,” Ed remembers.
So he reached out to John Malone, then head of TCI, the cable TV behemoth at the time. “Look, this technology works,” Ed said. “TCI can lead the industry with it. Let’s do a deal that makes this financially viable for both companies to install it in all your systems around the country.
“But you have to commit to getting 100 percent of your set-tops from GI,” Ed told him. John agreed.
His next stop? Cable giant Comcast. “The next day,” Ed offered them, “the same deal. And then over a week, I personally ran around to everybody and signed the top ten cable operators.”
Ed and his team then focused on removing costs from the engineering and manufacturing processes. “My focus the next year was, ‘cost reduce, cost reduce, cost reduce these boxes.’ And we got them down to literally half the cost we started at,” he notes.
Ed’s had both the vision and the urgency needed to “win big in the multi-billion dollar cable set-top market,” the authors write. “Over the next couple of years Breen watched the value of his company skyrocket.”
2: Vision is a must-have quality to be a great CEO. To be successful, they must be able “to see around corners,” Carolyn, Scott, and Vik write. “Virtually every CEO we spoke to emphasized the importance of having a clear point of view on where the world is going.”
How do these CEOs keep their vision current?
“They keep careful track of shifts in technology, changes in customer preferences, new competitors, and threats on the horizon,” the authors write.
“Doing so enables them to place bets before these trends become conventional wisdom and to maintain conviction when others inevitably criticize their choices to invest in markets that may not exist or technologies that are considered long shots.”
3: Later in his career, Ed was CEO of DuPont. Once again, he had foresight into the future.
“It was 2017, and he concluded that the agriculture industry was going to consolidate down to just a few players,” Carolyn, Scott, and Vik write.
Looking at the trends and economics convinced Ed that being one of the industry leaders would be critical.
“There were seven divisions in DuPont at the time,” the authors write, “and agriculture was just two of the seven, but it accounted for more than 50 percent of the company’s actual equity value.”
Ed was convinced the answer was to merge with rival Dow Chemical and spin off part of the business.
“Many people were skeptical,” Carolyn, Scott, and Vik note, “telling him: ‘You’ll never get the Dow merger. You’ll never get it the way you want.'”
Investors were doubtful as well. “There’s no way you’re going to get Dow and DuPont to do something together,” so went the thinking at the time. “They’re mortal enemies and it’s not going to work.”
Looking back, Ed says: “Probably ninety-nine percent of people wouldn’t have pursued the deal.”
Despite the naysayers, he believed the merger made sense for both companies, given the overall trends. “They’re better on the crop protection side; we’re better on the seed side. That makes a heck of a company,” he recalls. “We’d be a strong number two player in the industry.”
And that’s what happened.
“In what some analysts have called the most complex corporate deal ever,” they write, “Dow and DuPont merged into a single entity, were reconfigured, and then split into three separate companies: Dow (commodity chemicals), Dupont (specialty chemicals), and Corteva (agriculture seeds, traits, and chemicals), all of which were better equipped to compete in their respective fields.”
Reflecting on his career, Ed says, “CEOs make important decisions every day, but some decisions are just so huge that nothing else even comes close. I’ve made approximately fifteen really major decisions in my career, and I’m in my twenty-third year as CEO.”
His final thought: “Those big ones better work.”
More tomorrow.
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Reflection: Why is foresight the “lead” in “leader”? What is my view of the future of my industry?
Action: Journal about my answers to the questions above.
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