Robert Gillette: Making 'em fly at Honeywell Aerospace

Imagine taking a dozen related but independently-run businesses, each with its own unique product, merging them into a cohesive business segment within an enormous corporation and driving up sales roughly 30 percent — all during an intense, three-and-a-half year period. This is the high-performance world of Robert J. Gillette, Arizona-based president and chief executive officer of Honeywell Aerospace. "We turned our business upside down, changing everything, including how we go to market. It was a relatively painful process," Gillette told a ballroom of business leaders attending a recent Economic Club of Phoenix luncheon.

Imagine taking a dozen related but independently-run businesses, each with its own unique product, merging them into a cohesive business segment within an enormous corporation and driving up sales roughly 30 percent — all during an intense, three-and-a-half year period.

This is the high-performance world of Robert J. Gillette, Arizona-based president and chief executive officer of Honeywell Aerospace, the $13 billion behemoth that advertises with the catchy "we make 'em fly" slogan. His segment, Aerospace, produces integrated avionics, engines, equipment, systems and services, for everything from small jets to government missiles.

It has more than 20 production or service sites in the U.S., United Kingdom and Europe. "We turned our business upside down, changing everything, including how we go to market. It was a relatively painful process," Gillette told a ballroom of business leaders attending an Economic Club of Phoenix luncheon.

Held at the JW Marriott Camelback Inn on April 17, the gathering drew more than 200 participants. "But we had to put our customer first if we were going to win new business in the future to do a good job for them every day, and deliver on commitments made. That had not always been the case," he continued.

Sales in the wind

Aerospace is a heavy hitter for Honeywell, responsible for roughly a third — $12.2 billion — of its overall $34.6 billion in sales last year. The only segment that out-produced Aerospace was Automation and Control Solutions, source of $12.5 billion in 2007 sales. Transportation Systems produced $5 billion, while Specialty Materials pulled in $4.9 billion.

Locally, Honeywell is a major presence, with 12,500 Arizona employees and 9,600 retirees. Approximately half of that workforce holds a bachelor's or an advanced degree, and the average salary is a comfortable $68,000.

The corporation's impact also is felt in the supply stream, contracting with 1,300 suppliers in Arizona. Statewide, Honeywell's payroll is more than $1 billion, and the company's spending puts another $471 million annually into Arizona's economy. Add to that educational contributions topping $500,000, and it's clear that Honeywell's Arizona footprint is huge.

Flying the not-so-friendly skies

But back when Gillette took over Aerospace in 2005, many of the airlines that make up Honeywell Aerospace's commercial customer base were still suffering the after-shock of the 9/11 terrorist attacks. Even worse, customers across the board, including military and private customers, were dissatisfied with service.

Complaints included slow response times, a baffling bureaucracy and clueless sales/service employees who didn't have the necessary technical expertise. Gillette initially came on board in 1996. In mid-2001, he was named president and CEO of Honeywell Transportation Systems. With him at the helm, Transportation sales grew 8 percent, while income leapt 22 percent.

At Aerospace, he had a simple mandate: dominate the defense market and reinvigorate the commercial sector. He identified five trends that Aerospace hopes to cash in on — flight efficiency, after-market outsourcing, changes among competitors as well as business models, growing global demand and an increasing defense budget.

Blind sight

For each trend, Aerospace came up with a strategy to exploit it, and leveraged products by adding services. An example is a just-approved system for "flying blind" in zero visibility. Gillette called the new technology "synthetic vision that gives pilots a computer-generated three-dimensional look at what is in front of the plane."

The military likely will use it on helicopters that otherwise are grounded due to sandstorms, he noted. Aerospace is pouring considerable resources into its flying-blind solution, which promises to save "incredible amounts of fuel while saving on CO2 emissions" because it allows airplanes to fly point-to-point. "We no longer will have to fly highways in the sky," Gillette added.

Customers have responded to the new energy and better service by signing on the dotted line. Recent deals include an $18 billion, 30-year contract with Airbus, a $3 billion deal with Gulfstream and another $23 million gig with a Brazilian manufacturer of business jets, he said.

The fast-changing global market

Gillette says global expansion indicates that Honeywell Aerospace's market may change faster than domestic demands. For instance, 10 years ago, 70 percent of all business jets sold worldwide were sold in North America; today, only 40-50 percent of that business stems from North American customers, he explained.

"This changes our business dynamic, as we must supply customers where they fly," he added. Another strategy is figuring out which tasks Aerospace can perform for the customer that the company currently struggles with internally. Then there's the diverse technology underlying Aerospace's performance.

Air transport claims 60+ platforms; regional transport, 35+ platforms, business jets, approximately 120 platforms; general aviation, 100+ platforms and helicopters, 20+ platforms. And those are just the commercial platforms.

Teamwork

Despite the incredibly successful reorganization, Gillette says his "biggest challenge and most rewarding experience" remains delivering on the company's customer commitments. Key to that is a cohesive team of "really, really good people," he noted.

"I don't do a hell of a lot. Mainly, I select people, put them in the right positions and roles, listen to them, and alleviate what gets in their way. When I go home at night or get on a plane to fly somewhere else, I hope they come up with something good," he told the lunch crowd.

While developing leaders internally is a favorite focus, Gillette admits that business executives' lectures on personal leadership can be "a bit of a clich ." His approach is to spend time and energy talking to employees about the company's goals and direction.

The opposite of a leader is a victim, and victimhood isn't welcome at Honeywell Aerospace. "Some don't want to take responsibility. Honeywell people do, and it's the reason for our success." He said. "It's not a bleeding-heart, Kumbaya kind of thing; it's just the truth. Focus on customers, deliver on commitments and when something happens, fix it."

Bottom Line:

• More than 2,000 graduates of Arizona State University work at Honeywell Aerospace, according to Gillette.
• While Aerospace is based in Phoenix, Ariz., parent company Honeywell is headquartered in Morris Township, N.J. Honeywell is one of the 30 stocks that make up the Dow Jones Industrial Average and is also a component of the Standard & Poor's 500 Index.
• Aerospace accounts for roughly a third — $12.2 billion — of its overall $34.6 billion in sales last year.