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Lessons from the Titans is about what new companies can learn from industrial giants. Book summary with some very practical and industry-specific ideas: General Electric (Jack Welch): - "Fix it, close it, or sell it" - Cut layers of management and push decision-making down through the organization. - Those who missed numbers were fired; those who exceeded them were rewarded. - 2 bets based on selling at low margin, but embedding a service business throughout product lifecycle. - Got into financial services, led to trouble. - Pressure managers too much and they won't have time to think about the future. Boeing: - Nobody in the company cared about financials and people thought the goal was engineering, not making a profit as well. - Pushed technology development much further than customers were willing to pay for. - Crisis management is best done in advance. Danaher (Larry Culp): - 60k employees -- 100 at headquarters. - If an asset no longer fits in LT plans, they find a better owner, even if asset is still growing. - DBS is a set of constantly updated best practices that functions as a playbook for all employees. It provides day-to-day structure, with clear definitions of what matters and how it will be measured. - Lean manufacturing works best in companies with steady growth, neither high nor low. - Getting avg employee to perform a bit better is more impactful than focusing on "stars." - 30-min presentations while standing. - Talent development is mandatory. Honeywell (Dave Cote): - Incentivize for continuous improvement. - Value can come from cash tied in working cap - Make money for all stakeholders. - Don't fire-sale assets, wait for right price. - Study of all past deals to find out what worked, what didn't, and why. - "What you think, what you say, and what you do shouldn't be different" United Technologies: - "People do what you pay them to do" - Best incentive systems are not static. - Careful with targets (i.e 10% EPS growth) Caterpillar: - Market share losses hurt equipment sales one year, and then hurt aftermarket sales for 15 yrs. - Cat didn't invest enough in a robust production system. - Clients might take advantage of you if you overbuild inventory. Roper (Brian Jellison): - Simple acquisition model, singular management philosophy, and one-variable compensation scheme. - No ads budget or PR campaign. - Identify market mispricing around narratives. - 50 people at headquarters. - Never incentivized for market share so that people didn't push for bad contracts. Transdigm: - "It's a collection of acquired aerospace monopolies with outsized pricing power. - Often relocates acquiree's manufacturing to saved fab space from productivity efforts. - Abandoning high-margin, high-return product when it stops growing might be a bad idea. Stanley Black & Decker: - Managers 'guessed' overall demand, instead of planning carefully for each product. Led to too much waste and error. - Incentive changes, bonus if fill rate was met. United Rentals: - Optimize all assets in the network. - You can still make a profit in competitive mkts - Two changes in compensation: a) From compensating growing EBITDA to "return on controllable assets." b) Focus on district rather than branch results. - You've no idea how much more efficient you can be: Company that can run a truck on 15 routes a day > 5 routes a day. - To clients: "Hey, you don't seem to need this. Let us come pick it up and save you the cost."