Question: What was the best business advice you ever received?
Steve Loranger: I think the best business advice I ever received came to me from Dan Burnham, who was my boss, was the group president at AlliedSignal, and, later, rose to be the chairman of Raytheon. And, of course, Dan is now retired. Dan told me, many, many years ago, that one way to stay ahead was to anticipate as a leader. And he always said, no matter what action you want to take, take 30% more action, 30% sooner than you think you need to take it. So Dan called it the 30-30 rule. But it was, essentially, making your actions more ambitious in accelerating the expected timeframe. And I follow that advice. It means, I drive for more sales and I drive harder than I think I need to make my plan. It means, I think about getting more productivity quicker than I think I actually need it in terms of operating efficiently. And following, for me, following the 30-30 rule, as I’ve come to claim it as well in the company, has not only kept me out of trouble but I think it’s enabled us to stay right-side-up in many cases.
So let’s just take that rule and transition over to this economy and say, so how is this playing out in this economy? Even though we have an attractive portfolio, one that does address enduring needs that are not quite as subject to certain economic cycles as others, which is part of our strategy. But not withstanding this enduring component, in this essential component of our portfolio, we’re not immune to the economics. So the minute we saw the potential downturn or even, you know, anticipating, I should say, actually, months and months before we actually saw it. But when we first recognize that it would impact us, we made very, very quick decisions in terms of resizing our cost base, rescheduling our factories, and putting in initiatives around receivables, cash flow, and liquidity that would enable us to succeed. We did a lot of that work in this economic crisis, in September, October, and November of last year while we were still creating record business performance. But I’m pleased to say that even though those actions were ambitious, you could argue they were earlier than a lot of our other companies, than other peer companies took. They were, in effect, helping us really set up for the first quarter, second quarter, third quarter of 2009. And so, in a way, we turned in an outstanding quarter in the first quarter. We beat our expectation. We beat the Street’s expectation. And in part, when we dissected the reasons for that, we say, well, because we took early productivity action. And that productivity action came to play before we thought. So we’re never done with that kind of a subject. We still got a lot of activity in front of us in this economy. But that’s an example of, as a leader, always trying to stay ahead, pushing the edge, driving for breakthrough, and trying to create an advantage by overachieving in the process.
Question: Who else has influenced your development as a leader and manager?
Steve Loranger: Well, there were a couple that I like to highlight. When I left the US Navy, I joined the Garrett Corporation about 25, 26 years ago as a sales engineer. Then, I worked for one of the most experienced sales managers that the Garrett Corporation ever had, Tom Weck. And one of the things, and Tom gave me, over a period of several years, just a wonderful set of perspectives and advice with respect to working for the customer, what did the customer really want, what did the customer tell you, what didn’t the customer tell you, and then, analyzing the customer mindset to help be constructive about providing the right capability from my company to the customer. And likewise, Tom was enormously helpful in terms of making sure that I was holding our corporation to the highest standards. So I really have to credit Tom with giving me a very, very strong footing. As a young man, I was 31, 32 years old when I was working for Tom, but he had a perspective and a seasoning around the ebb and flow of business and he was able to dissect and try to create a teachable moment for me and, he spent a lot of time helping me.
The other very significant figure in my career was Larry Bossidy. I worked directly for and indirectly for Larry for 9 years, when he was the CEO of AlliedSignal and, later, Honeywell. And I think Larry’s reputation stands on its own. But, nonetheless, he is a great leader, he’s inspirational, he was somebody, despite being tough, despite Larry’s toughness, he was always compassionate and supporting of my strategies. But he was always holding me to a very, very high standard. So while it wasn’t easy working for Larry, it was fulfilling because this was a guy that would ask a lot of you to do, he would help you get it done, he expected the best, but when you gave it to him, he rewarded you. And I found Larry to be a really wonderful, balanced leader. So those are couple of my best examples.
Question: What was the best personal advice you ever received?
Steve Loranger: Well, that would have to come either from my father or my mother. And I’m not sure whether it was both of them or who it was. But when I was growing up, my parents never asked me to do a lot but they always let me know that I could do whatever I want to do. And that I was accountable for that choice. That I was probably going to work hard no matter what. But as long as I was working, I should probably work to aspire and achieve in areas that would ultimately be fulfilling. And so, I think my parents sort of opened my eyes to the fact that I was accountable, no one was going to give me anything, I was going to have to work for it, but yet, I had the ability to do whatever I chose to do. And whether that’s the American dream or whether it’s just a philosophy of achievement, it, in fact, was impactful to me. And I took their advice.
Recorded on: May 13, 2009