At Honeywell Innovation is Always the Key, Says CEO

“Innovation is the key,” says Honeywell CEO Darius Adamczyk. “Anything we do in Honeywell, innovation is always the key. Whether it’s expanding into Europe, driving more robotics, a connected  warehouse offering which we are bringing to customers and having a broader play, are the key technology levers for that business.”

Darius Adamczyk, CEO and Chairman at Honeywell, discusses how the company is using innovation and technology to drive growth in an interview on Bloomberg:

Honeywell Digital Makes Us a More Contemporary Digital Company

As we always said my number one priority as CEO was to drive organic growth, but we never say we’re going to give up on our margin expansion. We do it through a combination, both commercial levers, which is managing our mix, and always introducing new products, which bring more value to customers. But also not forgetting our roots, which is driving productivity. With the number of ERPs we have and the kind of complexity we have in our supply chain, Honeywell Digital, which is going to make us a much more contemporary digital company, we have plenty of levers for productivity as well.

Honeywell Digital really has three primary elements. First is data governance, which is standard across all our various businesses. We’ve done over 80 acquisitions in the last 15 years so we have a lot of disparity. Then there are common processes, which is we want to run our businesses the same way in a very consistent manner. We have some pockets of excellence, but those have some inconsistency. Finally, all integrated into a common IT platform. Just to give an example, we had well over 1,500 different software applications before we started. We had over 150 ERP systems. It’s just very difficult to run a company efficiently and enable us to really make good data-based decisions. Honeywell digital is really all about enabling that.

Anything We Do In Honeywell, Innovation is Always the Key

Warehouse automation, which we started in 2016 with our Intelligrated acquisition. It’s been just a terrific business growing strong double-digit. We also made another acquisition called Transnorm which added to that technology in Europe in Q4 last year. We were planning on growing it organically, but also we’re looking to enhance our offerings, so we’re looking for inorganic opportunities as well. Innovation is the key. Anything we do in Honeywell, innovation is always the key. Whether it’s expanding into Europe, driving more robotics, a connected warehouse offering which we are bringing to customers and having a broader play, are the key technology levers for that business.

Amazon is a big customer but we have a lot of big customers. I wouldn’t say it’s a predominant customer in that business. Just about everybody is looking into ecommerce because with a lot today’s retail you really have basically two options. One option is to enhance the in-store experience which a lot of retailers are doing. The other one is to drive ecommerce. We think that this trend is going to continue. Although I would say it’s in the middle innings in the US, it’s just beginning in Europe. We think we have a huge opportunity in Europe, India, and some of the other overseas markets.

We have a very active venture capital fund and we’ve made about six investments in the last six months which is augmenting our technology plays. So although we haven’t made any big acquisitions, other than Transnorm in Q4, we are continuing to invest through our venture fund and we’re deploying capital that way. It’s been a terrific story for us in 3D printing for instance, particularly for our aerospace business. For a lot of the slow-moving parts we’re trying to basically get a new part certified and three printing per day. That’s our objective. Our aerospace businesses have made tremendous progress in achieving that and it’s really helping both for our inventory and on-time delivery for a lot of our aftermarket customers.

It’s Important For Teachers To Be More Effective in STEM Education

Regarding the workforce, education is the key and particularly STEM education. Honeywell is a big believer in that. Not only do we develop a lot of our young people that we bring into the company but we also spend a lot of money and time on developing teachers. It’s important for teachers to be more effective in STEM education. It’s something that we’re going to be supporting going forward even on a broader scale because that’s the way to differentiate our company.

We’re always going to be differentiated by technology and we want to bring the brightest and the best. We want to make sure that it’s a competitive issue, not just here in the US, but everywhere we hire people, and we hire people just about everywhere. We have engineers in the US, China, India, everywhere around the globe. I would say lately we’ve actually been very much on the hiring string. When you grow 8% that creates a lot of opportunities to hire a lot of people particularly in the area of technology and engineering and software.