Advice from the Top: At Johnson Controls, growth is good

The goal is to grow. That can prove difficult to companies already in the mega club of the Fortune 100. For Johnson Controls jci to grow 10% means adding $3.5 billion in revenue this year, which is like adding a company the size of Wendy's, MasterCard or Del Monte Foods.

But Johnson Controls, maker of automotive interiors and auto batteries and an expert on making buildings energy efficient, intends to do that and more. It plans 50,000 more employees the next three to four years, says new CEO Stephen Roell, 57, who offered advice to USA TODAY corporate management reporter Del Jones on how mature members of the mega club can stay aggressive and avoid growth pitfalls. Following are excerpts edited for clarity and space.

Q: If growth were easy, every company would be Google. What makes it so difficult?

A: The biggest obstacle is the depth of management, to have managers who can operate globally in foreign and emerging markets.

Q: The U.S. economy has turned dicey. We may be in a recession. Time to play it safe?

A: We're a little contrarian. I still believe that this is purely a correction in what was an overheated residential housing market. There is no reason to believe that the non-residential market will fall in a typical recession. We're seeing growth in health care, education, even office buildings and airports. A slowdown seems to be the concern of people in our stock. But we see double-digit growth opportunities across a wide spectrum. A lot of companies are enjoying international growth, and that is going to allow them to get through this cycle. There is always opportunity.

Q: We're deep into the political season. Are you seeing anything from presidential candidates that might threaten long-term growth and job creation?

A: I'm watching for any unique positions on energy, but I'm not seeing anything that alarms me. It's probably not a topic they think they can differentiate their platform on. They've decided to focus on the economy or the war. I'm looking to see the candidates' view of isolation and their willingness to work across the world. I'm looking for free trade, open markets. (He declined to say whether he endorses a particular candidate.)

Q: How can you grow from $35 billion in 2007 revenue to more than $50 billion in five years?

A: Our earnings growth has been double digit for the last five years, and we're forecasting that for 2008. Last year was our 61st-consecutive year of sales growth, which is a record few companies can match. In our automotive interior business, we're fortunate to have a backlog of almost $4 billion over the next three years. In the building efficiency group, international expansion will be key. Finally, we're in the battery business, which we call power solutions, and there our growth will come from the Asian markets.

Q: How can any company hire 34 people every day, seven days a week, to add 50,000 in four years and maintain quality employees?

A: Some will come from acquisitions. In the last five years, we've gone from 110,000 to 140,000 employees, 23,000 of those came from the York International transaction (in 2005). These numbers don't include close to 7,500 employees we've added in China in joint ventures.

We still have very aggressive plans to hire. Certainly, China is a challenge, and we've put a lot of extremely talented human resources professionals to help us grow there.

Q: Will your new employees be mostly foreign?

  • 1
  • |
  • 2
  • |
  • 3
Join the Discussion
blog comments powered by Disqus
You Might Also Like...