Turning the page at Johnson Controls
George Oliver has some bridges to rebuild and some trust to regain as the new CEO.
As the chairman and chief executive officer of Johnson Controls International plc, George Oliver says he serves five core constituencies:
1. Customers
2. The board of directors
3. Employees
4. Shareholders
5. The community
“You’ve got to have strong relationships with your constituents,” Oliver said.
It appears Oliver has some bridges to rebuild and some trust to regain among each of those key stakeholders after the tumultuous term of his predecessor, Alex Molinaroli.
Consider the chain of events that unfolded in Molinaroli’s relatively brief tenure before Oliver succeeded him last September:
❚ The company formerly known as Johnson Controls Inc. agreed to merge with Tyco International plc and move the combined company’s global headquarters out of Glendale to Cork, Ireland.
❚ Shareholders filed lawsuits after the merger was announced, protesting their tax ramifications.
❚ Johnson Controls spun off its automotive seating business as a new firm, now known as Adient.
❚ Johnson Controls eliminated 11,299 jobs.
❚ Molinaroli had an extramarital affair with an employee of a consulting firm that was working with the company.
❚ Molinaroli became involved in a scandal in which he lost millions of dollars in a Ponzi scheme and helped bankroll the convicted conman’s legal defense.
❚ Shareholders voted overwhelmingly to oppose a “golden parachute” that gave Molinaroli nearly $100 million in compensation as he left the company.
In the end, Molinaroli had the shortest stint of any of the top executives in Johnson Controls’ 133-year history, spending three years running the company, followed by one year at the helm of its successor, Johnson Controls International plc.
So, it was with some trepidation that I met with Oliver for an interview this past week, especially considering that his predecessor had refused to even speak to this newspaper since 2015.
Much to my relief, Oliver came across as an approachable, engaging and authentic leader. Or as my late father would say, a “straight shooter.”
And that’s precisely what Johnson Controls needs at this juncture: More leadership. Less drama.
Oliver’s low-key and deliberate demeanor could be the perfect prescription for a company eager to generate headlines about its technical prowess, instead of its CEO’s scandals.
When asked in the interview if he realized the turmoil he was inheriting as he took the sunlit corner office at the company, Oliver shrugged and replied, “I’m humbled and honored. … I get energized and passionate about growth and technology and people. … I look at it as an incredible opportunity.”
On the road
Oliver said one of his immediate priorities is to “create clarity” for the diversified global company that has merged Johnson Controls, the top provider of building efficiency solutions in the world, with Tyco, the world’s leading provider of fire and security products.
The $30 billion firm has 120,000 employees in more than 2,000 locations across 150 countries and several industries.
It’s imperative that each of those divisions knows its mission and its role in delivering results within the parent corporation, Oliver said.
That’s why, by Oliver’s estimate, he spends about 50% of his time traveling the globe. Of course, it helps that he is able to fly on Johnson Controls’ corporate jet, enabling him to work and stay connected while in flight.
Johnson Controls still has 2,800 employees in the Milwaukee area, which Oliver describes as the company’s North American headquarters.
“As a CEO, a top priority is to attract, retain and develop the best talent,” Oliver said. “It makes a difference to get the best, the brightest.”
So far, Oliver is delivering on the company’s bottom line. Johnson Controls reported fiscal first quarter sales of $7.4 billion, up 5% from the same period a year ago.
Under Oliver’s guidance, the company also has added diversity to its board of directors with the appointments of Gretchen Haggerty, former executive vice president and chief financial officer of United States Steel Corp., and Simone Menne, former CFO at Boehringer Ingelheim GmbH.
Football partnership
Oliver will have a high-profile project to push over the goal line over the next two years: the development of the Johnson Controls Hall of Fame Village, a partnership with the Pro Football Hall of Fame and Industrial Realty Group.
The $800 million development on more than 200 acres in Canton, Ohio, will include a stadium, a medical complex, hotels, educational facilities, retail outlets, offices and more, as well as the new Pro Football Hall of Fame Museum.
The “smart city” project will serve as a global showcase for all of the products, services and technology that Johnson Controls provides, Oliver said.
Oliver’s strong resume has brought him to this moment. He previously held top corporate positions with Tyco and General Electric, where he served with former CEO Jack Welch. Oliver eventually became president and CEO of GE Water and Process Technologies and then president and CEO of GE Engine Services.
“Your success is determined by the team you put on the field,” Oliver said. “It’s about leadership, talent. Leading by example.”
And a refreshing change of pace.