Winning Now, Winning Later How Companies Can Succeed in the Short Term While Investing for the Long Term David M. Cote Review by Andre Marafon

Winning Now, Winning Later

How Companies Can Succeed in the Short Term

While Investing for the Long Term

David M. Cote

Review by Andre Marafon

I found this book to be extremely practical. Winning Now, Winning Later is a must read for anyone with, or who is involved in business. A personal take on how to deal with the false dichotomy that every leader faces. Delivering results in the short term, or delivering results in the long term.

David M. Cote is the former CEO of Honeywell International – an industrial conglomerate – and has been responsible for taking the company from near bankruptcy to a market cap of US$120B. Whilst facing many challenges, setbacks, including the 2008 crisis. Through the sheer force of his resiliency, consistency, and leadership the Company has developed a strong culture that is poised to secure a leading position in the global market.

The recommendation came by a dear friend. Being an exceptionally successful entrepreneur, he decided the book contained too much valuable knowledge to keep to himself. So, for that reason, he distributed over 50 copies to every partner and leader of his company. I was lucky to be one of them.

Now, it is my turn to share this absolute gem.

It is not so much the ideas behind David Cote’s business philosophy that makes it unique. Intellectual curiosity. Honesty. Self-awareness. Focus. Go deep. Be loud. Plan worst-case scenarios. Take action. Post-mortem. High performance. Dream big, plan small. Consistency. Relentless effort. You might have heard these concepts in other business books; I know I have. What makes this book such a beautiful story is how the author manages to blend his own personal experiences and perceptions into a useful mental model.

The genesis of David Cote’s business philosophy is to banish intellectual laziness. Similarly, start posing questions nobody has asked before, and conveying conflicting ideas. A leader must always challenge, concisely. Challenge every single aspect of the business, from its people to its processes. From its direction to its destination. Remembering that if two people always agree, only one is thinking.

Once a leader has successfully implemented intellectual honesty and intellectual curiosity, it is easier to take the organization to the next level. Adding into the mix a sustained improvement process, which is vital for any company seeking to win today and tomorrow. Consistency. Predictability. Repetition. Pragmatism.

Yet, a leader must always make changes slowly enough to ensure that they stick, but fast enough to build momentum and get as much benefit as possible.

A leader shouldn’t just talk about culture. They must get busy, and never stop.

A leader should know that revolutions can move in unintended directions. Henceforth, a leader must create an organization that is flexible enough to pivot on a button and adaptable enough to sustain movement. They won’t need to take unnecessary risks that may bring revolutionary change, because they will have been carrying the organization forward all along.

A leader must take extra time to ensure the strategy makes sense, and validate it daily. So, their organization can spend the vast majority of its time executing.

But, a leader cannot forget. They need to pick their priorities, and understand that there are no shortcuts.

A leader must know that the world rewards results, not effort or process.

In order to do that, a leader must focus on customer experience. It is the foundation of growth. If you are not pleasing your client today, you are not growing. Listen to your client. Listen with intent. It is far harder to re-engage a customer, then to retain it. Just like so many things in life.

Experience is typically overrated. I couldn’t agree more with David Cote. Just a little experience combined with a lot of raw talent is worth far more.

“It’s easier to take a bit of wind out of someone’s sails than to put wind into their sails to begin with.”

A leader should know that HR is too important to be left to HR. Find someone that has business acumen like your CFO, and that has a passion for people like your psychologist to occupy this vital position. Understand that people and business are the same.

A leader cannot be afraid to act swiftly. Better yet, a leader must never delay a decision that has to be made today.

A leader cannot make this mistake. Money speaks, loudly. When you receive positive feedback with low monetary compensation, believe the monetary action.

Underperforming leaders need to take responsibility for addressing their own performance or lack thereof. Full responsibility.

A leader needs to be self-aware, and keep their ego in check. Remember that the quality of a decision and its results count for more than the ideal itself. If you find yourself full of great ideas, but very little action. Think again. You might need to change your approach.

“The king is dead. Long live the king.” Not only must every leader be replaceable, but they should also prioritize mentoring their successor. It is a vital part of the strategy of an organization. Otherwise, you are a blocker. You might turn out to be the reason your organization fails. I believe this to be one of the worst things that can happen in your career, either intentionally or unintentionally.

Here it gets interesting. David Cote discusses in detail his leadership transition, the lengths at which he prepared for his departure, and describes the kind of leader he was trying to find for the organization. Perhaps, a glimpse of how he saw himself. In his case, it was an ongoing operation, which he planned meticulously. David Cote has done something I had never seen before. He had a keen ability to run the business with a thriving culture. While at the same time maintaining his ego in check, and preparing for his departure 5 years in advance. Painstakingly working to find his successor, whilst preparing the organization and its stakeholders for this new leadership. Leaving just in time to allow his successor to enjoy a strong tail wind. It was just closure for his 10-year tenor.

A pertinent lesson for our new reality. A warning message I wish I had known one year ago. In my new found knowledge I would have been more emphatic, and the results might have better. A symmetric analogy from the 2008 crisis:

“When an airline cuts its flight hours by 7 percent, leaders there reduce their orders for Honeywell spare parts by 25 percent and burn off their existing inventory to conserve cash. On the same logic, we’ll reduce our own supply orders by 40 percent, and our suppliers will cut their own orders from vendors by 60 percent, compounding greatly effect of a 7 percent decline in the end market. During recoveries, the opposite occurs: spikes in demand grow larger as you go down the supply chain. Yet suppliers can’t meet the demand when their orders double overnight – it takes time for them to rehire laid-off workers and access the materials they need. As a result, our business can’t grow as rapidly during a recovery as they otherwise might”.

With a consequence, inflation. Quite similar to what we are currently experiencing. Nevertheless, it is not quite game over. In a crisis, David Cote believes that a leader must step-up to the plate and always be slightly ahead of the competition. A leader needs to prepare for recovery earlier, because recovery is inevitable.

I feel compelled to say that I have in fact stumbled upon most, if not all of these ideas elsewhere. However, I have never seen them applied with so much vigour and tenacity. Your life story is inspiring. Thanks, David. You are clearly a rock star amongst executives.