Straight Talk from ABB Chief

“I was a staff executive for Jack Welch, which meant I carried his bags.” ABB’s Joe Hogan shared the experiences at GE and elsewhere that have shaped his leadership outlook and agenda for ABB.

“Companies are not faceless enterprises without a conscience,” Hogan continued. “Business has a huge social responsibility; it can be a real force for good and cannot stand outside society. And I think maybe Europe has found a better way to strike the balance.”

“I learned playing basketball in high school and college that it isn’t about stars, it is about the team,” Hogan said. “You can’t have individual stars; you have to have a team. And I learned about how you manage people under pressure.”

“I was going to work for GE Plastics for a couple of years, and wound up staying 23 years,” Hogan said. “I was a staff executive for Jack Welch, which meant I carried his bags, and after my tenure at GE Fanuc, I replaced Jeff Immelt at GE Healthcare. Both GE and ABB have 100-year histories, with successes and challenges. GE moves people to different businesses, while ABB tends to keep people in the same business unit. You want people deep, but you have to have that horizontal understanding of how the business works too. ABB is an engineering-oriented company, while at GE it is business first, engineering second.”

“ABB is far more global than GE,” Hogan went on. “But we can take some organizational design lessons from GE that I hope we can use to take ABB’s human resources to a higher level. You don’t get there overnight, though.”

“We have had every leadership model under the sun,” interjected Gary Steele, “…what I do know is that we’re trying to build leadership to impact the organization, not leadership for leadership sake! The endgame is dollars and cents.”

Hogan defined how he sees the relationship between ABB and its customers. “I want ABB to sell the way customers want to buy. We’ve revamped our group account team around that. You have to be flexible. At GE Healthcare, we went to a customer survey system called Net Provider Score. That was the best way to understand how customers feel about you. There are three things customers want. Deliver on time and make it work the first time. They want service when they need it. They want us to have a sense of urgency on their behalf. That’s what they want. How you get those things is difficult. We need to mature at ABB in that way. Big companies can only do some things at a time. We need to be very careful to not raise customer expectations and then fail.”

ABB is a very large organization, Hogan noted, but it has strength in its people. “ABB people just love this business,” he said, “and they’ve been through bad times before. The people of ABB are really genuine.” Hogan says he wants to use that people strength to reinforce the global, yet local, mindset he believes will change the ABB culture. “We need an external mindset. You see that from my team and that will flow down to the organization.”

Hogan also spoke about the current global recession. “The economic situation keeps me up at night. Capitalism didn’t fail,” he said. “We had a bunch of bankers who thought they were smarter than they were. Bankers who spoke less English are doing better than those who were more fluent. What failed was the securitization of debt. We won’t get out of this economic situation until that’s fixed. I wake up in the middle of the night crying, ‘Just fix the banks!’”

Talking about how ABB and its customers can weather the storm, Hogan again focused on the customer.” There’s always growth when you are as global as ABB. We’re focusing our resources and time on those opportunities. We need to be cost-competitive. You can help customers best by discussing how to help them through this time on an individual basis. What it is about is a long-term relationship,” he said. “Business blowups, like Tyco and Westinghouse, happened when the financial side got out of control. We’re not going to become a bank.”

“There’s a long-term focus in Europe that is proving viable versus quarter-over-quarter short-term thinking. But there’s no long term without a short term. Discipline is critical. Investing only in the long term is just as irresponsible,” he said, “as short-term thinking only. I am focused on ABB.”