Also: Blinken in Israel, Caroline Ellison testifies, X disinformation.
Good morning,
De-conglomeration is a trend of our times. The breakup of GE and spinoffs at IBM and J&J illustrate this new approach. But the new CEO of Honeywell, a veteran of 35 years at the company, is planning to buck the trend. “There’s a strong belief or perception that large companies can’t grow. They can’t innovate,” Vimal Kapur told me yesterday. “I want to prove that perception wrong.” That’s why this week, just four months after taking the top job, he announced a reorganization of the company around what he called three “megatrends.”
1) Automation: Accelerating technological change, labor shortages, and IOT, are all fueling more automation in buildings and factories, and Honeywell provides important equipment for automation processes.
2) Aviation: With travel on the rise post-pandemic, and wars in Europe and the Middle East raising the demand for military aircraft, this looks to be a growth area.
3) The Energy Transition: The move to a low-carbon economy is underway, and Honeywell equipment is an important part of the transition.
The change, he said, is driven less by what is happening at Honeywell, and more by what’s happening in the world. “I want Honeywell to align with these three trends,” Kapur said. Each megatrend is a high-growth vector, and a clearer focus on all three can make Honeywell “a consistent growth company.”
I asked him whether he needed a culture reboot to create a growth company. In response, he praised the culture left by his predecessor. “Under Darius (Adamczyk) the focus on operational execution, say/do accountability, has been developed very highly. I want to maintain that.” (It’s worth noting that Adamczyk remains Executive Chairman at Honeywell, and had to sign off on the changes.)
Kapur also said that a greater focus on faster-growing regions overseas–he cited India, China, and the Middle East–could help fuel Honeywell’s growth. When I asked how that might be affected by geopolitics–major wars in Europe and the Middle East, and rising tensions around China–he answered:
“The geopolitical circumstances are not getting better. We lost a half billion of revenue in the Ukraine war. The biggest impact for us would be a geopolitical situation in China. We have a big business there–around $2 billion. We are growing at a mid-to-high single-digit rate. We are acting as business as normal. Our customers still want us there. But geopolitical factors don’t help…Our goal is to become catalysts for demonstrating why globalization and trade have to continue.”
Separately, Best Buy CEO Corie Barry took the stage on the final day of the Most Powerful Women Summit. She was asked about a notion I’ve written about here–that being CEO is harder today than it’s ever been.
“My guess is every generation of CEOs has said it’s harder than ever to do. But I do think there is a unique set of challenges that today’s CEO is navigating….The CEO before me left this beautiful array of leadership books in the office that I walked into, and not one of them told me what I’m supposed to do at the start of a pandemic.”
More news below.
Alan Murray
@alansmurray
alan.murray@fortune.com
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Blinken in Israel
U.S. Secretary of State Antony Blinken arrived in Israel on Thursday amid fears that the Israel-Hamas war could spiral into a regional conflict. "The main point is this: we stand with Israel," Blinken said, as he underlined that 22 Americans had died in Hamas’s weekend attack on Israel and that "a number" of others were likely to be held hostage in Gaza. In the wake of the surprise multifront attack on Israel over the weekend, the Israeli government has launched retaliatory air raids at the Gaza Strip, which Palestinian officials said on Thursday have killed 1,203 people. The death toll from the Hamas attacks on communities in southern Israel has reached at least 1,200. FT
Caroline Ellison testifies
Caroline Ellison, the ex-girlfriend of disgraced FTX founder Sam Bankman-Fried, took to the witness stand on Wednesday to testify against the downfallen crypto king. In her second day of giving testimony, Ellison–who pleaded guilty to fraud charges late last year–broke down in court as she recounted tales of Bankman-Fried’s aversion to rules that would ban stealing. Fortune
X CEO on Israel-Gaza disinformation
Linda Yaccarino, the CEO of X–the social media platform formerly known as Twitter–outlined how the site has responded to disinformation and violent content following the escalation of fighting in Israel and Gaza. In a publicly shared letter to EU official Thierry Breton, Yaccarino said Elon Musk-owned X had removed hundreds of Hamas-affiliated accounts and removed or labeled tens of thousands of pieces of content after Hamas’s attack on Israel at the weekend. Reuters
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Seeking a happy, healthy, connected digital life How can tech companies help improve consumers’ digital lives? Explore key insights on the right balance for tech adoption, privacy, wearables, 5G and more, from Deloitte’s 2023 Connected Consumer survey. Learn more.
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Employee attrition and the state of the economy This week, Alan Murray and Michal Lev-Ram chat with Johnson & Johnson CEO Joaquin Duato on why the company is in its "golden era" and U.S. Secretary of the Treasury Janet Yellen on the narrowly avoided government shutdown. Listen now |
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