Chairman, Vertiv Holdings Co.

By Thomas Gryta 

This article is being republished as part of our daily reproduction of WSJ.com articles that also appeared in the U.S. print edition of The Wall Street Journal (August 1, 2020).

In Personal Board of Directors, top business leaders talk about the people they turn to for advice, and how those people have shaped their perspective and helped them succeed. Previous installments from the series are here.

David Cote led a legendary turnaround of Honeywell International Inc. over 15 years, but it took him a long time to find his path to success.

Growing up in a small French-Canadian enclave in New Hampshire, Mr. Cote was the first in his family to finish high school.

After that, he found a lot of things he didn't like. He was a mechanic in his father's garage, a carpenter's apprentice, a college dropout and a commercial fisherman off of Maine. He even joined the Navy but backed out the day before swearing in. It took him six years to graduate from the University of New Hampshire.

"I had a lot of ambition, but I was totally directionless," he said recently in a morning interview, enjoying a cigar from his house in Atlanta. "I didn't like school. I really didn't like it."

In one stint at UNH he was told by the dean of students that he was no longer allowed to live on campus. "I asked what I'd done. And she said, no one big thing. It just seems like wherever you are, there's trouble. You're just a general troublemaker."

Mr. Cote got married and the young couple lived in an unheated, uninsulated apartment in his native state. He worked an hourly job at a General Electric Co. plant and his wife became pregnant. Mr. Cote realized that they didn't have enough money to have a child, something that finally focused his ambition.

"I was scared to death," he said. "I quit smoking cigarettes. I started working out, I went back to school full time days while I worked nights and had a family."

He eventually landed a job on GE's prestigious internal auditing team, where future top executives of the company were groomed in a rigorous multiyear program. He went from barely ever leaving New Hampshire to traveling the world, learning different businesses, and progressing higher through GE's ranks over more than two decades. Mr. Cote made it on a list of potential successors to then-CEO Jack Welch but was cut relatively early in the process. Mr. Welch fired him and helped him land a job at TRW Inc., where he became CEO in 2001. After just a year, he jumped to run Honeywell, a conglomerate that GE tried to acquire but was blocked by European regulators. The company was struggling.

"Once I got there, I realized as bad as it looked externally, it was even worse internally," he said. He endured heat from the media and analysts who saw him as the guy who was cut in the first round of the GE succession race and wasn't even the first choice to run Honeywell.

In the decade and a half he was at the helm, Honeywell's market value more than tripled. When Mr. Cote took the reins, the company was reeling from a bungled merger with Allied Signal and that failed deal to be bought by GE. He built a reputation for his discipline in making midsize deals that expanded product lines in areas like personal protective equipment, building controls and mobile scanners. He avoided chasing competitors into new markets and overpaying in the process.

Two years later, he teamed up with Goldman Sachs to acquire Vertiv Holdings Co., which provides equipment for data centers. Mr. Cote became executive chairman of the company when the deal closed earlier this year and the company went public.

He also decided to write a book after much encouragement from people including former Treasury Secretary Hank Paulson and former President Barack Obama.

"I thought, well, if I have voices like that actually telling me how to do this, maybe I ought to listen," he said. That book, "Winning Now, Winning Later: How Companies Can Win in the Short Term While Investing for the Long Term," was released on June 30.

Below are four of his trusted advisers. Despite political connections -- most of the people he named have worked inside the Beltway -- he says he has no interest in public office.

"I'm more predisposed to getting a bunch of people in a room to hash it out, make a decision, let's go make it happen. That predisposition doesn't always work in Washington," he said. "So no, I do not have any political ambitions."

Hank Paulson

Former Goldman Sachs CEO and Treasury secretary

Mr. Cote first met Mr. Paulson when the latter was still at Goldman. He was impressed with the way Mr. Paulson was able to get a conversation going at a dinner he hosted. "I've always been impressed with him because he just had a really good grasp of things," Mr. Cote said. "Watching how he handled the crisis, I always said, thank God he was in the Treasury job at the time, it made a hell of a difference." Mr. Paulson also has a deep understanding of China, which was a major market for Honeywell, so Mr. Cote was often asking for his perspective on the economy, China and the rest of the world. "I still reach out to him just to get those perspectives."

Erskine Bowles

Former White House chief of staff

Mr. Cote was a member of the Simpson-Bowles deficit-reduction commission appointed by President Barack Obama in 2010. Mr. Bowles co-chaired the group with former senator Alan Simpson. "I love his people skills, his understanding of organizations, and he is just a downright good guy. It's tough to run into anybody who doesn't like Erskine," Mr. Cote said. He was impressed with Mr. Bowles' ability to get input from everybody and to progress at the right speed for the process. It was an accomplishment that Mr. Cote said he could never have done himself. "Things didn't go so fast that we didn't bring people along, but not so slow that nothing happened," he said.

Ram Charan

Business consultant and author

About 35 years, ago, Mr. Cote took a course at GE's famed management center in Crotonville, N.Y., where Mr. Charan taught one of the daytime sessions. It made a strong impression. Mr. Cote praises the way Mr. Charan thinks about issues and how he gets others to think. Everytime they have a meeting or meal together, Mr. Charan comes with two or three items that he wants people to think about. "He's always nice enough to say I learn from people like you, Dave," Mr. Cote said. "And I always think to myself, well, nice of you to say, but I think I'm the beneficiary here, not the other way around."

Valerie Jarrett

Former senior White House advisor

In 2008, the incoming White House administration reached out to Mr. Cote to see if he would be supportive of the stimulus plan, marking the first connection with Ms. Jarrett. Mr. Cote supported the plan, which he saw as boosting confidence that the government was going to do something. He continues to reach out to her. "I just find Valerie extraordinarily thoughtful about everything that's going on and always able to see both sides of an issue and willing to work with people to figure out a solution that can work for everybody," he said. "I always liked getting Valerie's perspective on things."

Write to Thomas Gryta at thomas.gryta@wsj.com

 

(END) Dow Jones Newswires

August 01, 2020 02:47 ET (06:47 GMT)

Copyright (c) 2020 Dow Jones & Company, Inc.
General Electric (NYSE:GE)
Historical Stock Chart
From Sep 2020 to Oct 2020 Click Here for more General Electric Charts.
General Electric (NYSE:GE)
Historical Stock Chart
From Oct 2019 to Oct 2020 Click Here for more General Electric Charts.