It’s a little different when you take on the role of CEO for the first time.
Editor’s note: This essay was compiled from John Gremp’s presentation for the Executive Address Series, in which he discussed his perspective as a new and first-time CEO.
FMC Technologies, Inc. is a lot like other PESA companies—we’re leaders in
technology and in the markets we serve. In the 10 years that we’ve been FMC
Technologies, our revenues have grown four times, our profits have grown seven times, our stock price has grown 10 times, and we earn one of the highest multiples in the industry. In short, I became the CEO of a very successful company.
For my first Board meeting, I was sitting outside the Board room and they voted for my approval as CEO. I walked in to applause. There was a pause, and I realized I was supposed to say something, but I hadn’t prepared any remarks. I said, “It’s a privilege for me to be CEO of this great company, and it’s my intention to make this great company even better.” We finished the board meeting and I realized that I had no idea how to lead a great company, let alone make it better. My leadership team and I have spent the past year figuring out what it means to lead a great company and make it better.
Change or Fade Away
As it turns out, most great companies don’t stay great. Of the 500 Fortune 500 companies in 1955, only 71 exist today. Jim Collins, a professor at Stanford, studied these companies and what happened to their greatness. It wasn’t so much what the industry or the outside world did to them, it was what they did to themselves. They were reluctant to change because the business model that made them successful blinded them from making the changes they needed to make.
So my management team and I realized that in order to continue to be a good
company, we needed to challenge ourselves when things were going well. We’re still in the early days of this, but I want to share with you, as a new CEO, how we think and how the leadership team thinks about the future of our company.
We found that a clear strategy is helpful in not only telling you what you want to do, but what you don’t want to do—it tells the direction of the company, gives a vision of what the company will look like in 10 years, and what we need to do to make that vision happen.
Finally, once the strategy is established, it’s critical that the entire organization is aligned around that strategy. One of the characteristics of our company, as well as other PESA member companies, is growth. But our management team decided that it wasn’t good enough just to be bigger, we wanted to be a better company, and there’s a difference.
To be a better company, the management team decided that we needed a cultural change, not that there was a problem with our culture—it has, in fact, contributed to our success. But we define better as delivering a higher level of quality in everything we do in a way, frankly, that the industry has yet to demonstrate. It’s ambitious, the idea of changing the behaviors of 14,000 people around the world, not all of whom speak the same language as the corporate office in Houston. It won’t be easy—it will take a long time—it will require strong leadership from the top, but once achieved, we’ll be a different company—our leadership team can envision 10 years from now having a culture of being better, not just bigger.
Every employee deserves to know the direction of the company, and they deserve to hear it from the top. But that’s not the only constituent of a company, and this might sound obvious now, but in our case the Board needed a clear direction from us. They needed to understand our strategy and buy into the vision about what our company could look like 10 years from now. I’m not sure I completely grasped the impact of that until after one of our Board meetings. One of our members came up to me and said, “You know, John, that’s the first time that we’ve really understood the strategy of the company.” In subsequent meetings the Board seems to be more aligned and in sync with all the decisions we make as a management team.
FMC is the only company I’ve ever worked for. I’ve been there 37 years, so I thought I knew the company and its culture pretty well. I had the opportunity to run all of our businesses for four years as COO, and I served as President for one year before becoming CEO. I wasn’t complacent, but I thought, “I’ve run all the businesses, so how different could this be as CEO?”
It’s very different and I didn’t understand that until I was in the role. There’s an aloneness that comes with the role. Several years ago, Andrew Gould, the former CEO of Schlumberger, did an interview in which he was asked what it’s like. He said, “Frankly, it’s quite lonely, you’re on your own.” It doesn’t mean that you’re lonely, as in you’re not engaged with a lot of people, but for me, for the first time in my 37-year career, I didn’t have a boss. Yes, I have a Board, but the Board reminds me, “We’re not running the company, John, you are. We’re advising you and support you, but you’re it.”
As Andrew said, the buck really does stop with you. The decisions you make are bigger, and that’s natural, but I didn’t grasp it until the Chairman of Spencer Stewart told me, “The reason the decisions are so big is because the easy ones are all made below you—it’s only the big ones that get to your desk.”
Finally, one thing I did expect but didn’t realize how pronounced it would be, is communication. A CEO is always sending a message. The microphone is always on, and it’s magnified and amplified for good or bad. As I said, it’s the CEO’s job to communicate the direction of the company to all constituents—in that sense, the communication and the amplification of articulating the strategy is critical and works well. But the microphone is never off.
Before I was CEO, it seemed nobody cared about my lessons learned. But once you’re CEO, everyone wants to know if there’s some sort of secret to getting there. There aren’t any secrets, and a lot of my lessons learned are common sense, but they will help you in your career.
The first is to be open-minded about your career path. When I was in graduate school, I studied finance, and I envisioned a career in finance. I hoped one day to be a controller within one of the divisions of FMC. That happened a little earlier in my career than I had thought, and I didn’t have a plan beyond that.
One day the operations manager at the division at which I worked asked if I had ever considered a job in operations and working in the shop. I told him I’d only been in the shop twice, and once was by mistake. I told him I’d never thought about it, and he told me that they had a position open as materials manager. I told him that I didn’t even know what that was, and more than that, why did he think I’d be any good at it? He convinced me it was something I should try. I did it, it was new to me, and I enjoyed it and found a new career path.
A couple of years later, our company was growing our defense business. Joe
Netherland called me up and said, “We have a position open in San Jose, we’re growing fast, and we’d love for you to interview for two positions—one is an
assistant materials manager, and another as assistant purchasing manager.” I did, and Joe asked me what I thought. I said I loved materials management, so sign me up. I go back to my division, and Joe calls me and says, “John, we really loved your ideas, and we’d love to offer you the position of assistant purchasing manager.” I thought, okay, I’m not really interested in that, but he convinced me to come out to San Jose again.
Joe told me, “We really have two purchasing managing jobs open—one is building our purchasing systems and planning, the other one is heavy procurement.” So I finally agreed to do the systems and planning job because it was similar to materials management. He came back and offered me the other job. I was frustrated, but I agreed.
The lesson for me throughout all of those careers moves, was that I didn’t really understand what I needed at the time. I was going where I was comfortable. But learning how to negotiate large forgings and $100 million aluminum plate contracts with Alcoa was exactly what I needed. Being on the shop floor was the experience I needed. Fortunately for me, there were people above me helping me with my career and guiding me into roles that I wouldn’t have naturally moved to—in fact, I resisted them. Be open minded, and the learning experience you have could contribute to your career in significant ways.
The second tip is that when you think about your performance, I like people to think about not only what they accomplished over the past year, but what they learned. Accomplishments are great, but what you learn can actually be more important in terms of your career. Think back to what you can do today that you couldn’t do a year ago. Focus on your skills and what you learned, and your career will be fine.
When I think about all the roles I’ve learned—all the technical and functional aspects of the jobs—the one thing that you never completely learn is the ability to be a leader. Every job is different or larger, but even as the CEO and Chairman of our company, I’m still learning about leadership. You’ll always learn about how to be a better leader—that will never stop, even when you become a CEO.
Finally, I strongly urge you to take advantage of PESA. I remember over 30 years ago going to my first PESA meeting—the networking, the opportunity to understand this industry, and the ability to build relationships was probably one of the best things that ever happened to me. The Emerging Leaders Committee is making that happen for all the young leaders in our industry and I appreciate it very much.