[Namsan Ddalggakbari] "Leader, Are You Ignoring a Potential Time Bomb?"

[Asia Economy Reporter Kim Hyewon] One question a leader must ask themselves: "When making major decisions, are you minimizing risks during your tenure? Are you ignoring potential time bombs?"

Most companies that have operated for decades inevitably have some kind of long-standing issues. What was right at one time may be wrong now. The malady of short-term performance obsession often leads to avoiding responsibility rather than solving these old problems, resulting in extreme consequences. By then, it is already too late.

David Cote was different from previous leaders. Even if short-term performance slumps were unavoidable, he never ignored the company’s long-standing problems. He judged these issues as matters critical to the company’s future and did not want to leave a time bomb for his successor. He wrote this in his book Winning Now, Winning Later. Cote led Honeywell as CEO for 16 years and wrote the book to inspire leaders from small organizations to large corporations who want to achieve change and growth. The original manuscript was titled “Leadership Matters.” Cote emphasizes that a strong, innovative, and courageous leader must solve prominent problems threatening future growth in their area of responsibility, even if it causes short-term setbacks. If you are a leader, his advice is to seek out uncomfortable truths and find solutions.

Another question a leader must ask themselves: "Are you aware of the short-term activities your organization undertakes to meet quarterly targets? Are these harming long-term effects? Do you have long-term plans that produce no short-term results at all?"

When Cote stepped into Honeywell in February 2002, the company was in a disappointing state plagued by intellectual laziness within the organization. There was a repeated pattern of obsession with short-term results while long-term performance lagged. The accounting books were full of deceptive transactions, and talented employees left after receiving stock options. Cote was like a captain boarding a sinking ship. However, by pushing both short-term performance and long-term growth simultaneously, Honeywell’s market capitalization soared from $20 billion to $120 billion by the time he left in 2018, achieving nearly 800% returns?about 2.5 times the average return of the S&P 500.

Cote despises the deeply rooted short-term performance obsession in many companies. He is also uncomfortable with leaders who firmly believe that short-term results must be discarded to invest in the future. His view is that short-term performance and long-term growth only appear mutually exclusive. To overcome short-termism, a mindset committed to both short-term and long-term goals must be embedded deeply within strategic planning. If you are a leader, you can and must pursue both simultaneously. Otherwise, you will never fully realize your potential.

Of course, even if a leader is fully prepared, there is a high chance that the organization’s members will not follow due to inertia and fear of change. When a leader tries to bring innovation to the organization, existing members may rise up like a swarm or oppose reforms behind the scenes. Cote advises remembering the story of the “annoying big bear” at such times. He compares himself to the annoying big bear who enters the forest demanding cultural change. Initially, the bear is an annoying outsider, but by appearing repeatedly over time, it becomes accepted as part of the community. To change an organization, Cote advises consistently demanding change with clear principles and never wavering once those principles are established.

The core of Winning Now, Winning Later is the “any fool can” theory. It means that any fool can do at least one thing, but Cote sounds a warning that leaders should never remain at the level where any fool can succeed. Founded in 1885 with a 136-year history, Honeywell’s secret to overcoming numerous ups and downs and thriving appears to lie in leadership like Cote’s. The book also includes a special preface dedicated to Korean readers, reflecting the connection with Korea as a thoughtful bonus.

Winning Now, Winning Later: The Legend of American Manufacturing Honeywell That Succeeded in Both Short-Term Performance and Long-Term Growth / Written by David Cote / Translated by Lee Youngrae / Wisdom House / 19,000 KRW

This content was produced with the assistance of AI translation services.