Leadership in Action > Thriving in the digital era

Transforming a complex, 100-year-old conglomerate into a nimble, digital-first firm.

When Darius Adamczyk became Honeywell’s CEO in 2017, he brought a powerful, digital-first vision to the 100-year-old industrial conglomerate. His predecessor had already set the intention to make Honeywell the digital leader among industrials. But when Adamczyk took the helm, he knew the company would need a clear plan to achieve that lofty goal—and he knew it would take redefining the firm’s structure, culture and brand.

Paradoxically, Honeywell’s success made the job harder. “Inertia said to keep doing everything we had been doing, because it produced results,” Adamczyk says. “But I knew if you don’t transform, you’re going to become obsolete. We had to have the courage to disrupt what we were doing and become much more of a software company. Push innovation harder. Push organic growth harder. Double down on breakthrough initiatives that can dramatically impact Honeywell.”

Kristin Valente, US-West Accounts Managing Partner, EY, also singles out courage as key. “Transformation is messy,” Valente says. “You’ve got to have the guts to take it on. If you aren’t absolutely courageous in your conviction, it will be incredibly hard to follow through.”

If you don’t transform, you’re going to become obsolete.

When Adamczyk became CEO, Honeywell’s many businesses operated in four Strategic Business Groups (SBGs), the legacy of a century of acquisitions and operations. Managing this wide-ranging enterprise could be labor-intensive and inefficient, especially given a digital infrastructure that Adamczyk describes as “a bit of an IT mess.” He invested heavily to improve that infrastructure, leading a charge to strengthen, streamline and standardize the company’s systems and processes.


The goal: to empower Honeywell’s leaders to harness massive amounts of data, so they could make better-informed decisions and execute them more quickly and decisively. “Industrials have to go digital to survive,” says Mark Costello, senior partner and advanced manufacturing and mobility leader at EY. He has worked closely with Honeywell to effect its transformation—the latest chapter in a 75-year partnership between the two firms. “If you don’t automate and digitize, both within your organization and in how you interact with your client base, you will not thrive,” he says.


Crucially, Adamczyk formed Honeywell Connected Enterprise as a means to align and grow the company’s software businesses, and then he roped Connected Enterprise tightly to the four business groups. “We had to do something incredibly difficult,” he says. “We had to rip out four organizational structures and realign them. That was the real pivot, where we showed that we’re going to be serious about digitization, both inside and out.”


This pivot laid the groundwork for the next stage of essential changes. “Some of the key investments we had to make were in people,” Adamczyk says. “We augmented our skill set with digitally savvy professionals who had been in more software-oriented companies.”


Another key was a judicious approach to M&A. “Software acquisitions are extraordinarily expensive, so we couldn’t acquire our way into being a software-industrial business,” Adamczyk says. “Instead we emphasized internal strategy and execution, augmented with smart, complementary acquisitions.”


Costello cites Adamczyk’s savvy approach to both acquisitions and spinoffs. “Every company Honeywell purchased brought a digital component,” he notes. “Likewise, the assets they’ve shed have been older types of industrial business that don’t comport with Honeywell’s vision.”


Bringing the digital transformation to every aspect of the organization has made Honeywell a far quicker business. “I want to be faster than our competition, which in many cases are smaller companies,” Adamczyk says. “People are shocked to see how quickly we move and how execution-focused we are.”


Costello recognizes the same synergy. “We are proud to have worked with Honeywell to help them realize the benefits across all parts of the organization, from the business units to finance to HR to general counsel,” he says. “Others in this sector have attempted similar changes, but Honeywell will ultimately be seen as the standard bearer.”

This is part of Leadership in Action — a master class series featuring prominent CEOs highlighting the decisive moment where bold decision-making has made a material impact on their company and career.

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