A frequent speaker at our annual Leadership Summits, Bob Nardelli was asked to give practical guidance to CEOs for managing in tough economic times. Whatever their differences, Jack Welch once acknowledged that Nardelli was the best operations executive he had ever encountered in his lifetime--a remarkable statement considering the source. A 30-year veteran of GE, Nardelli served as president and CEO of both GE Power Systems and GE Transportation Systems. In 2000, he left GE to become chairman and CEO of Home Depot, and in 2007, he became chairman, CEO and member of the board of Chrysler. Credited by many with saving the company from extinction, he resigned in May 2009 to serve as the CEO of private equity firm Cerberus Capital Management's operating and advisory company. He now oversees the operations of some 52 portfolio companies with over $48 billion in combined annual revenue.
During his career, Nardelli encountered virtually every significant issue facing CEOs in recent times: turnarounds, rebuilding iconic brands, CEO compensation controversies and dealing with Washington. Highlights of his remarks follow.
One of the basics in any recovery is finding the best talent. You can never "over-talent" a job in today's environment Sometimes I would put individuals on the job to grow them, other times it was to grow the job. Guys would come to me and say, "Bob, I'm bigger than that job." I would say, "That's exactly right, because I want you to grow the business." That's the environment we're in.
Confronting issues head-on is something that has been critical. The Chrysler experience probably was one of my most painful personal experiences, particularly the furlough of people in order to survive. To get backing from the federal government, it was necessary to provide liquidity. Any time CEOs approach this solely on the basis of numbers versus families, they are in danger of losing the sensitivity you need in making these decisions.
Managing Turnarounds in Turbulent Times
We [CEOs] have to look inside ourselves and ask, "Do I really believe in what I'm doing?" Do you pass that mirror test every morning? At Home Depot, we took sales from $45 billion to $90 billion. We had four consecutive years of earnings per share [growth] of over 20 percent. We added 1,000 stores. We went into Mexico, Canada and China. We created an $8 billion supply company. We went online and in 18 months added $1.3 billion in sales. We took the dividends from...