An Interview with John Faraci
Good. Afternoon, everyone. Thank you for joining, us today for a conversation, with, John ferati, the executive, chairman of carrier, corporation and. Former. CEO of International. Paper from 2003. To 2014. John. Has been a leader. Through crisis, as before so he was a CFO. Of International. Paper during, the 9/11, crisis, and its CEO during, the financial, crisis, into eight so. Currently, he. Is also the director of ConocoPhillips. Ppg. United, States Steel Corporation and. He. Was a director. Of United, Technology Corporation, prior. To its separation, so. Carrier, global, corporation, is, one of, the three entities that made up, united, technology, and John. Is its first executive. Chairman, they. Were just listed, I think last month um. On. The sakai change so, in addition to his extensive. Experience in the private. Sector John also serves on the board of the National. Fish and Wildlife Foundation, and, he. Was the past chairman of the board of Denison, University. So. Last but not least, John. Is a real. Friend of Columbia, Business School so he serves, as an executive, in residence. Advising. MBA. Students, on their career and he's, been. A frequent guest lectures. In the economics, of strategic, behavior course, which is the popular elective school. Moderator. Today is. Stephanie. Maroney who is a second. Year MBA student at, Columbia Business School so graduating, very soon. All. That said let me give the floor to Stephanie. And I'm, looking very much forward to hear, from John and thank you so much John for for, joining us today, Thank. You professor and, again thank you so much to John for being here today. We're, really lucky to have this opportunity. So. We're, gonna spend the first 45, minutes or so going, through the questions that we've prepared. And. Then, we'll open it up to the audience. So please post, your questions in the Q&A box and feel free to start doing so as we're talking and. With. That I think it would be great if John we could start off with you just briefly walking, us through your, background and experiences.
Okay. I'm gonna do that very, briefly Stephanie and water thanks for the introduction and Stephanie thanks for, you for doing being, willing to be the interviewer I think this is going to be a hopefully. Interesting and fun. Well, that's very quickly I've. Been. Married 40 years this. Year two. Daughters both, married two, grandchildren, my, business life was with one organization for. 40 years I had. 21 different assignments. My last position was a CEO of International. Paper which is a 25 billion dollar global, packaging. And forest products company I, was in that position for 11 years so. Basically. If you take out that position I had 20 assignments, over 29 years and you could say I couldn't hold a job, until. I got my I got my last one my. Career was more or less in my my, view kind, of like a jungle gym of experiences, I had. Finance. Jobs sales jobs marketing, jobs forestry. Jobs and I was a history major. Project. Management experience general. Management strategic planning, manufacturing. Joint ventures and a lot of that M&A, experience, as well one. Of the big reasons I stated International, Paper so long inside getting opportunity, to learn develop and grow it really turned into a opportunity, to do different things but the, opportunities, I he kept on kept, on coming I made. A lot of mistakes along, the way for sure and, what. I learned from those is you. Learn your most valuable lessons from the things you tried it don't work out. And. Those. Failures make, you a better, person and a better leader, you. Know after I pee I decided, to really. My priority was not being busy but being interested, so. I, said, about doing things that I wanted to be interested, in one of which was teaching, and I, got. Into, that by. Being becoming an executive residence, at Columbia Business School and. I, do some some, lecturing and teaching with writer in his class on some of his colleagues. The. I, also teach at leadership course of Williams College in January and earlier this month I was planning, on going out to Kansas State University, to, do some lecturing on, business. And leadership but. That's gotten postponed like a lot of other things have because the. Most, campuses, like Columbia our students. Aren't on campus one. Of my passions is. Mountaineering, and mountain climbing I've done that for decades the, last four years from May to September I work. For the National Park Service, as, a backcountry, mountaineering, Ranger in Grand Teton National Park and, I have four, responsibilities. Keep, people from getting in trouble or getting hurt help, people are in trouble and keep myself out of trouble so. While, we talk about some of the other activities, I have really. Uh I think I'm 70% interested, in 150. Percent interested 70%, busy and a hundred and fifty percent interested, so well, to stop right there at Stephanie if anybody has any more questions about what. I did or why I did it. Take. That up in the Q&A. Great. Thank you John and, so. As executive, chairman of carrier, can you talk a bit about how kerbin, 19 is impacting, you and your business now. Sure. No. I think we, really need to kind of start with that kind. Of talking, about it with 50,000, foot level which is Society because it's. All about people and in, our business is all about people our customers and our employees, you. Know the first thing that's saying I guess a lot of us know there's just got to remind ourselves this is the first pandemic, we've had in a, hundred years and in. Early March I think in the five. Major US cities, there are only 23 confirmed, cases so all this happened very very quickly. We've. Now got you. Know 2.6, million, people in 177. Countries so this is truly, global and carriers, a global company almost. Half of our business is outside the. United States and, it's. A real kind of human tragedy but this happened all in such a compressed, period of time usually things like this kind. Of unfold over time and. You. Know as a result of. Trying. To contain the virus. Mitigate, it called. Flatten the curve we. Put ourselves, this I. Call. Self induced economic. Coma which, basically, translated, into you know shelter in place and all non-essential. Businesses, are closed. Carrier. Was, was. Deemed an essential businesses. We're in the fire. Security, and. Air-conditioning, and eating business, people. Need those products, so our, factories, are still running but, they've been running up and down because of the. Had. To clean them when we've had an incident and, with. The man across, the United States falling. In almost every sector outside, maybe. Grocery. Stores and Netflix. We've. Had to adjust our factory schedules, to. To, adjust to the demand. Equation which is a lot lower we'll probably be off 30%, in the month of April, from. Where we would expect to be the, same things true at companies like, like.
PPG, Was his industrial hoodies company my on the board there we expect our April sales to be down 30% us, steel the same way, ConocoPhillips. Which. Is a biggest. Oil and gas oil and. Gas exploration, company. In the world, we've. Shut in, almost. 30. Percent of the global oil capacity all, of it in the United States because. Demand. And oil has dropped by, 30. Million barrels a day or about 30. Percent, so. Big, significant, impact but our, focus is on keeping. Our employees safe, protecting. Our assets and most importantly. Communicative. On their employees or how we're going to get through this and come out the other end a stronger better company. Thank. You so. We, know you have significant, experience as, a leader in times of crisis, you were CFO. Of International, Paper during, 9/11, CEO. During, a 809 and are now executive chairman of carrier, so. 9/11, a financial crisis and Cove in nineteen all present very different, types of crisis, from. Your perspective, how is the current situation different. From these others. Well. Leadership, is, from. My perspective it, is very situational. And. You, know 9/11 was I remember, I our offices, at that point in time were in Connecticut and, I could see the World Trade Centers from. Arras was comes arrayed on Long Island Sound. And. That. Was not an economic crisis, it was you, know kind of an attack by on. Our country by a group you. Know the business impact was very localized, in New York City and basically the city shut. Down as to Washington DC, but. Our country. Suffered, and was horrified by. What. They saw airplanes, flying into buildings and, buildings. Collapsing, with with. People inside so. I think the business response, was true. Compassion, for, those who suffered, you. Know recognition, for those, who responded, on. A lot of ways companies did that and. Visibility. For those that you leave so, it was a very different type of leadership response, in, in that situation, then. What. Unfolded, in the, Oh eight oh nine crisis, which took a while to totally, unfold and then, what's happened in Kovac 19 where it, didn't take very long for things did not just unfold but to explode, so. You. Know 809. It. Wasn't a self-induced economic, crisis it started off with with, a bank in, the banks and quickly, moved, into the housing market that, bubble pop and the, our, sales that International Paper fell about 15. To 20 percent very, very quickly but, then stayed there and. Only gradually, recovered, so. Yeah. The, leadership challenge there, was to be a realistic, optimist, with your employees, tell them what reality is but, be optimistic about how we're going to navigate from, where we are to where we want to be which was economic, recovery. Empower. People to, do. What they can to help listen. A lot listen, to what employees listen to their ideas be, decisive, deal. With ambiguity there, was a lot of uncertainty, as to what's next, we. Have some of our larger competitors going bankrupt so, everybody assumed since we're the largest competitor. In the space we. Were next and we weren't. You. Know we wanted to play a win so we were fortunate we had a strong balance sheet at a time we actually went out and made seven billion dollar acquisition today.
Bear Stearns fell apart are, closed on it are announced. It actually and we did that because we saw this merger as an opportunity, to actually, strengthen the company to. Get through the economic downturn that we didn't have that it was going to be for how long but, come out the other end you. Know a more, competitive, and better company, which we did so, we. Are the. Koba, 19 crisis. Is what's also was very different wasn't an economic, an economic, crisis started something it was a health crisis so it was a virus. That none of us had seen before as I said first endemic in a hundred years but. Some of the same. Leadership. Traits. I thinking competencies. Required. To, help organizations. And people get through this you're dealing with ambiguity, you've. Got to be concerned about employee safety because that, comes first. You've. Got to adjust your business to the demand levels in some cases you know if you're the airline industry you're down 95 percent. If. You're arresting a small business owner or a restaurant you're having no revenues so you've, got to deal with supply chain issues, and importantly, you. Know all of us are just looking at our liquidity. So. I think the the, common themes are be transparent. Be. A realistic, optimist, and you know bring out the best in your people, over-communicate. And. Be compassionate a lot of tough decisions have to give me but you need to do that leaders if you do those make, those decisions, with empathy and compassion listening. To the team's this is time when teams really come together. Thank. You I think that makes a lot of sense. And what. Advice would you give on managing, a through. Crisis, were there specific lessons, that you learned, in. These past experiences. That, you. Could share with us. You. Never have all the information you'd like and. When you're seeing things you haven't seen before like none, of us at least it might you know my, lifetime had lived through a financial crisis, like we had in 2008/9. Was probably the, 1930s, since we had a situation. Like that it's. Been a hundred years soon as if it had a pandemic so, we've never seen one before either so, I think the thing that realize. Very quickly is you're gonna be dealing with ambiguity and, you're, not gonna have the answer to all questions you. Have you'd like to have you don't need those. What. You need to do is you. Know get your leadership teams aligned. Empower. Your employees so. That they they know what they can do to help I think, one of the real lessons, I learned I do eight oh nine crisis, is. That as. I traveled now we can't travel but at that point time you could travel I did a lot of traveling going on talking to employees, telling. Them what they could do to help the company not. Just survive, but win, so we painted a picture what. Success, look like coming. Out the other end of this whenever. We get there and I. Think that energized, and motivated employees. To, do things they otherwise wouldn't have done because if. You're a leader. In a large company you, can't be the only person rubbing the boat you want to have everybody rowing, in one direction as hard as they can and I. Saw, the power of that you. Know as we started to come out of this in 2010. And. During, these times especially I think that, you're faced with many difficult, decisions that need to be made quickly and timely, could. You walk us through your decision-making.
Process I. You're. You, give you more credit describing, as a process. Because. You're putting this you. Know this stuff together kind of as situation. Unfolds, you. Know international paper you. Know had we had a strong balance sheet but. The financing, market for a while was closed to, us when. We had some debt coming uh some. Debt coming up and you are uncertain whether be to refinance, it so we kind, of organized about what's, important, now for the first couple, months. Liquidity. Was. Our concern and access, to capital markets so we were meeting and, I'm on a every. Other day basis, you know talking about liquidity. Plans and contingency plans. The. Decision-making process, for how to get. Through this was you know what's. Our rank order of things to go, attack yeah, whether it's adjusting. Our facility, so we didn't produce more products. Then our customers, wanted to buy because we're in a more or less a commodity, business so in supply and demand get balanced prices. Fall there, are some very tough decisions there. We. Actually had to close one large facility, in Virginia, remember the governor calling me and saying what, can I do to help you and I said unless, you can buy all of our product there's, no amount of tax. Tax. Holidays you can give us because we've, got a demand problem we don't have a cost problem so, the, decision-making process, for me was really to make sure my leadership team was aligned and engaged about what, we as a leadership, team needed, to be doing, to. Enable. Others to do the, kind of work because we were all around the world you know we had over 300 factories, and. Obviously, we couldn't be making all the decisions in Memphis. Tennessee for what was going on in Russia, and Brazil and, you. Know in Oregon, so. In empowering, people and getting them line I think was probably. The key framework, for figuring. Out. What. To do and and the situation, changed, what's, what was important in month one wasn't what was important in month six. You. Talk a lot about. Motivating. People all the employees and management, team, how. Do you do that during a time, where. You like you said you can't travel. And. Be, with people physically, how, are you adapting to that well. We're doing a lot of this what. We're doing today, it's. Really amazing to see how. How. Innovative, people get and. Creative, when, they, can't get out and do what they're used to which is face-to-face communication, I think. The first thing I did when.
The Financial crisis is unfolding was get on an airplane and not come back for a week just flew around to different parts of International, Paper talking to people you. Know we're now doing that with, with. Webinars with some meetings, the. You, name it and. People. Are. Using. It they need to be over communicated, with and so being transparent, being visible in a different way being transparent. Explaining. What you're doing and importantly. In this situation. Explaining. People why they why they have to be at work, because, all their colleagues may not be you know some are in offices and they're working from home some. Are in factories, that are producing products explaining, to people why that is and also, going. Overboard to make sure that, employees. Are safe coming to work you. Know there, there, is high is higher anxiety, when. We're trying to do everything we can to make sure they well everything, we can make sure they've got the proper personal protective equipment, if. There's an incident in a facility we. Close. It down immediately make. Sure it's clean sometimes it's, a couple days, people. That have symptoms, we. Ask them to stay at home they still get paid so. I think we're trying to make tough decisions and, balance out here with an idea that employees. Feel. That we're trying to make the right decisions, for them. As individuals and, for the business in the future. And. You talked a lot about the need to be flexible, especially in, times like this how, do you believe, that organizations. Need to adapt, to survive periods. Of disruption. Well. It's. A good question usually the. You don't see the disruption, coming so, it just all of a sudden it appears which is what happened with. Kovac, 19 which. You. Know obviously we had we, had some of what we needed for the healthcare system a lot, of the things we. Didn't. Have enough of or they weren't in the right spot around PPE, and hospital. Beds so. The, we. Build a capability. To. Do, all that the healthcare system didn't break it.
Got Stressed and strained but, it didn't, break we, were able to get. People in the hospital beds not, run out of PPE not. Around ventilators. Build. Hospitals, where we need them move, boats around. The. I, think. The. Culture you need to have an organization is, first, of all you know they, play to win mindset. You. Know people should. Have a vision of you know how do we be the best company whatever space capito, and. The. Investment. Change management capabilities. So. That, the organization. Is. Understands. How. To succeed, when, things, change any company has been around over a hundred years and national, papers one of them has, been adoptable. They, wouldn't be here he's still here today but, the challenge, is tomorrow. Aren't. The same ones we faced a decade, ago or 20, years ago or even five years ago so I, think. Recognizing, and. People. People, will make mistakes when, you're going through disruption, you're trying to change your business model, but. Those really are opportunities, and we. Already see a carrier, I talked, to the CEO a couple of times a week. New. Opportunities, that will arise when, we come out of this that we. Thought might be two. Years three, years down the road and they're nine months down the road so. I, think, you need to be talking to the ordinance you always need to be talking to the organization, about why. Yesterday's, approach. May not be appropriate, for tomorrow, and you. Get the organization, to be adoptable. And give them permission to try some new things because. When. You're in a situation like this and you're making choices not. Everything's gonna be perfect and it doesn't need to be. Hain. And, building. Off that just a little bit what are some the positives, that you've seen come out of times of distress. Well. For one I think this, comes top of mind to me so I covered, 19, all, these unsung, heroes we have out there you. Know we know about first responders but. You. Know people they're Manning. The pharmacies, stocking. Shelves working. At checkout, counters, you know driving trucks, you. Know getting, reinventing. The supply chain so we can get things from restaurants, or grocery stores, I mean they're, truly the unsung heroes. That we they. Rise to the occasion and. Manifest. Themselves in all different ways especially, in this situation, it's. Been the medical. Community. Doctors. Nurses first responders, and then all the other people that have been rearranging. Their. Lives in our lives so that we can. Do what we need to do it you. Know mitigate, what's going on, flatten. The curve which I think we've done and then, slowly but safely we. The economy. And. Given. What we've talked about I think it's it's pretty, clear that things are going to change a, lot going forward what, do you think are some of the longer-term impacts, that we'll see from Kovan 19, well. That's. A great question. The. There. Will be a normal it probably won't be, normal. We had before. Coab in nineteen when we had a vaccine I think that's a big milestone that vaccine, is probably, the. Medical, experts, say 18. To 24 months away we'll, have one, you. Know the, weather. We developed at first or gets developed somewhere else we'll see, and. Until. That vaccine, is available and. We've got a virus. Is you, can be asymptomatic and, still be contagious in fact the medical experts would say you're most contagious, when you're asymptomatic which. Is kind, of a scary thought. So. Social, distancing, and. Different. Arrangements. At restaurants. At. Universities. Are going to be important, we'll. Have therapeutics, this fall. The. I understand. That. Will reduce the severity of. This. It's. Much more severe. Than regular flu, that'll. Help. So. I think we're gonna you know gradually, open up the economy see what works and, what. Doesn't work and make adjustments. The. The. Opening up is some kind of guarantee. That people go back to their old. Behaviors, so I think it's going to be important for leaders kind, of in government in the medical profession and. In business to explain. To people why. It's safe to go to a restaurant why it's safe to travel while it's it's safe to go to a park. What. Things, that people are doing before we put these these. Restrictions, and in, a formal in some cases restrictions, some places for my guidelines that, have changed people's behavior. You. Will. Still be flying airplanes, they. All will be parked, we'll. Be able to go to our favorite parks, whether they're in your whether. It's a national park or your, Park, in your town with your your kids. Those things will return but, they'll be done with, kind, of an extra, modicum of safety.
The. Whole. Area, of contact tracing if, someone gets infected knowing, who, that person might kind of contact with new. Technologists, will get developed. Very. Quickly the, naval that actually. Happened not just being talked about. Thank. You and and. As a CEO, or and, as a leader of a business, curious. How you, balance the different, interest and time horizons of all all of your stakeholders and. Does, that change at all during a time of crisis. Well. Sure. It does I mean the, in. The instance of you. Know a virus like this if. You believe, I truly believe our first responsibilities. Leaders to. Our employees and their families is to keep our people safe, and. We've. Got a personal responsibility, to be. Safe but we have a responsibility, to provide people with training the environment, that that. Supports. That. So. I, think, the. What. We need to be doing is is kind. Of involving, people in those decisions and. Being. Available being transparent, and being visible and being candid, about what we see go. Back to being a realistic, optimist, not. Having your head in the sand about this is okay it's. Not okay but, we. Can deal with it here's how we're dealing with it and here's what you can do to, help us deal with it it's very important, having that open communication, that. Dialogue, at, all levels not just this senior, leader in an organization, it's. Everybody. Who's responsible, for people and when. People know that the, organization, they they work for cares. About then they'll. Go. Above. And beyond my experience to do what they can to help the organization, be successful, because they know it's the organization, cares about cares that's people when, they don't believe that then they get hesitant. And, wonder. What the motivation, is, don't, act wait, to be told. What to do and that's, not a fast-moving organization, to respond to crises like this. That's the speed you need sir. Great. I think, that that, makes a lot of sense and and. Going, back to kind of your time at International Paper you. Lead a pretty significant, transformation. There. Early. On in the company and what. Steps did you take to assess, what was needed what, questions did you ask yourself, and and how did you manage, that transformation. Well. The first question we asked herself Stephanie, took a while to kind. Of face, up that this was. We. Knew what we wanted to be as, a company, but. We didn't on it we hadn't honestly, asked ourselves really. That company, we're, the largest packaging. Forest Products Company in the world. That. Has its pluses and minuses, but. We're, average, at best and we really hadn't admitted that as to, how far away we were from truly. Being the best in our industry the value. Chain of the profit pool wasn't. That deep the reason it's hard to earn cost of capital returns, in our industry so if you weren't the very best, you. Weren't going to be earning the right to grow because. The. You. Weren't earning cost of capital returns, in the capital you were investing so, the first step for us was looking, in the mirror and, seeing. Not what we wanted to see but what we actually were and that. Told us that incremental, change wasn't, going to be enough to, go from a lure which was average to, where we needed to be which was. Best. Consistently. By far so we were earning cost of capital returns, over time and we. Decided a transformational, strategy, was what was needed, we. Didn't have an activist coming in telling us we had to do this the Board of Directors was telling us we had to do this they were saying you're, not going to be the CEO unless you do this tomorrow and. We. Had a management team that I thought was was, a strong, one of people with different points of view people. Weren't afraid to speak up so we did a lot of debating about okay. We, want to change the company transformational.
E We've. Got lots of choices you. Know let's, go pick some and then you, know play that new hand that new play. It to win and. What we ended up doing was, divesting, 1/3 the company raising. 11 billion dollars and. Reinvesting. That 11 billion dollars into building. A. More. Global company in the, businesses we kept when, we got out a lot of the businesses that we're in that were related to our company, but we, said those aren't the ones that were gonna over invest in and and, win with for. A variety of reasons so. It was really about trace making and. The. It, wasn't my choice it was the management teams choice so everybody was lined and owned the decisions, and, then. We spent a lot of time going. Down in the organization saying, here's what we're doing here's why and the. Prize at the end of this is we, can be by. Far the winner in our space you know we're not competing with Apple we're competing with other. Packaging, companies and here's what we're gonna do and here's, how we're gonna do it but we won't get there with just baby steps we need to take some big bold steps I called. Them you bet your job but don't pet the company. And. As it turned out it worked not everything worked some, of the investments he made were. Not successful, and we, subsequently, sold. Them or got out of them but. Some of the big moves he made work, very very well and we not. Only transformed, the company but the industry, because. Did, a consolidation, in our North America competitive environment. And, what. Were some of the biggest debates that were happening. Amongst. The management team the board, during. That time. What. To sell and what to keep you, know we ended up international. Paper was the largest commercial landowner in the United States for four, decades. We, owned over ten ten million acres of land it was the DNA the company we started off as a forestry. Company back in the late. 1800s. It was the most profitable business, we had. But. As it turned out it was worth far more to other investors. And was to us and we. Only were in the forestry business because we needed. The. Fiber. To make our products and we also were the biggest recycler, in the world as. Well so. It was most profitable business we've had it was part of our DNA was kind of culture of the company you. Know we were attached to the environment, proud of our legacy is being a good steward of the. Environment. And that. Was a pretty tortured decision, for, me my I, didn't, want to do it actually because I joined a company because it, was a, my. Interest in the outdoors in the environment. But. My. Heart. Said don't do it my head said do it and the. Management, team kind, of got around that and that that, unlocked, a, whole lot. Of value because we sold them for far more than it was worth to us but. Also took one of the crutches away from, not. Really managing some of our underperforming, businesses, that we kept really well because. The forestry business is very very profitable. But. It wasn't gonna you know Colding wasn't gonna differentiate us so. That was that was the toughest decision I think to, make, right. And. Are. There certain lessons, that you can take from this experience at International, Paper that can be applied to your leadership at, carrier, and how. Does the role of executive chairman, differ from CEO, in these situations, we got to start with that it's very different they're.
Not In any executive chair roles in the United States may, be more common in Europe I'm, not the CEO so, I'm not, running. The company I'm really there as a, senior. Member of the board and. As an, adviser to, mentor. To the CEO who is new but. Very capable, I'm gonna be a great CEO and an, advisory, to his management team so. You. Know my role is helping. The. CEO and the management team be. Successful, in building, a board because we had, no, boardroom no no directors, nine, months ago and now we have eight we, had our first board meeting this week and his. Weatr said we went public on April 3rd which wasn't the best day in the best, day to, go public, but. We, did we've needed to because UTC. Was spinning off to another company at the same time and also merging, simultaneously. With another, aerospace, company so all those things had to happen and, what, was not a great time to go to the market as a public company. So. Lessons, I've learned the. People. Respond. To. Leadership. If they believe in it they, believed it was a future for them and they, their leaders care about them I can't. Stress that more, that doesn't mean you don't make tough decisions and, sometimes those tough decisions impact, people, sometimes. It's fewer jobs, you see what's happening a lot of companies now they're furloughs. And layoffs, at, 26 million people that or, most, of them are all employed eight, weeks ago and now all the sudden we have 26 million that were unemployed. Those. Are hard decisions to make but, you know they, need to be made, we're, talking about people's lives in this crisis, and a lot of the hoods and balancing. That out and, explain to people why we're doing things is critically, important, and, what happens when, you do that well, and. You do have a competitive, company. You. People. Respond, and they, see the results and it's like a flywheel people say okay you. Know we can do this we can accomplish things we'd never done before because. We're all ready willing and able to do it and you. Know that this creates some momentum. The, builds, success builds, success no, always mistakes and failures along the way those, build capacity, and capability, but, winning builds confidence. Doesn't. Everyone never want to be complacent yes. Absolutely. And. So, the. Next disrupt, disruption, is right around the corner yeah. Yes. You never know what what's coming. And. So I'm curious what were some of the biggest challenges that carrier, what's facing before the crisis happened, and how. Is the focus, shifted. Well. This, is I'll give you an extreme here we have we. Kind of is that we had a hundred and sixty. Three ERP. Systems, in carrier because carriers really an amalgamation, of a number, of acquisitions made, over time that were never integrated, from ERP, standpoint, so, one of our priority, and sim fund the ERP system that's. Gone to the bottom of list, that's the last thing we need to do and at a time like this, we. Did spin out with words. Or an investment grade company, but we had zero debt when we were part of UTC. And. Now we have 11 billion dollars a day. So. Liquidity. Is important. And, you. Know we have to see how demand demand settles down settles, out at 30 percent is the worse it is we'll be okay if it's 60%. Off you know we're probably not so you need to see a couple, couple, quarters, of, how. Things are going to play out before we decide. The, liquidity. Pieces, it's, okay but you, know carrier he's got a great brand good. Market share but. We taken our eye off organic, growth and. We focused on margins, for too long of having. The best margins, which we do, but. Some of our competitors were their, organic growth is better than ours so the. Coming. Into 2020. You know we announced the spinoff last June so I've been working on it for 10 months we. Were all prepared to have a growth plan for, 2020. Obviously. There's. No growth plan for 2020, because the markets aren't growing. So. We're, not gonna put. That in the drawer and forget about it we're gonna put it kind of, still. On the table and, we'll be opportunistic, but you, kind of shifted our emphasis now, to let's. Make sure we, keep our employees safe, protect, our assets, stay close to our customers.
Get. Ready to. To. Be, in the marketplace with the best products, the best service the best distribution. And. Grow. As it matters. Okay. Thank. You and, I just, have one last question before we, open, it up to the audience and we have some questions coming in which is great. Speaking. Both as a CEO and, as an executive in residence for, Columbia Business School what, advice would you would you share what seem to be graduates, or young, professionals, during this time. Well. Yeah. I fully recognize for all of us this is kind of a disturbing. And anxious, time you. Know. We're dealing with a virus you can't see what you don't have a vaccine for. The. It's having a big impact on small. Businesses, for sure large. Businesses, but small businesses you, the. Some, may not open. So. I'd say stay flexible and, it's the most the thing, this, is a no. One wants to turn a crisis, into a an exciting, opportunity that's. But. There's a ton that we can all learn, from. This. Crisis, and how companies and, how people respond, to it that. Is. A learning experience we have to just sort of capture so. I'd. Say the, be willing in whatever company or organization, big or small you're going to if. Someone says you know we'd like you to do this not what you signed, up to do take, advantage of that you'll. Learn you'll expose, the things that you never would have been exposed to before as we all navigate, through this together with. Regardless. Whether you're in the real estate business finance, business and a start-up a big. Company. Consulting. Company you'd be doing things that you wouldn't have been doing if the, world hadn't changed not. Almost, turned us upside down so stay flexible, be. Willing to do things that you, didn't expect to do. I spent. My career getting. Jobs that I never anticipated getting, I never. Got the job that wanted next always got something different and. That turned out to be incredible, learning experience and, so I I, think it'll be that way for. All. Of you or graduating. This. This, summer as well but. Be comfortable with being maybe, different. Thank. You I think that's absolutely right and very, similar to what, what, we've been hearing the, importance, of flexibility, and. Being. Open minded a lot that a lot of different opportunities, um. So. We. Have a question, here from the from, the audience. Curious. To hear what mistakes. You have made that, you, learned the most what from, when they're leading during the times of crisis. I. Think. Most of my mistakes were made in, the time of no crisis, which is a point, why did why, did you do that, you. Know we got into and. I just kind, of go backwards. And. While I was CEO I kind. Of led us to an investment India I thought an India was important to get into India we got in 10 years too early and, bought. The wrong company so. That in turn out to be a very, successful, investment. And you, know my successor. Did the right thing. Kind of solid was too long to wait and so we got. Out of India we make coming, out of the transformation, plan when, we sold all those assets we did four, things we invested, we made a big investment Russia a big. Investment, in Brazil and a. Medium-sized, investment, China enemy in a small, one in India China and India didn't work and they were on me those. Are things I drove. The. And. The. Russia and Brazil worked, extremely. Well that, Russia was you. Know kind of grand. Slam home run. Early. In my career I I, was, running a business it was the first big general management summit I had and we. Were building, a plant to make a new products plant cost us a hundred million dollars to build and.
It Turned out the plant. Couldn't make the product. We. Had not done the. Work going, from the. Pilot trials, to. Scale-up. Trials, and when we spent the hundred million dollars we basically had to conclude this, Factory wasn't gonna work it couldn't produce the product we built, it for him I had, to go tell the CEO at the time. That. We'd spent off we were gonna spend a hundred million dollars and I'd have a factory, that would would, hire all the employees, and we're, gonna shut it down because, the product didn't perform in the marketplace and I learned. Some huge lessons about, questions. I didn't ask. Processes. I didn't put in place where we shouldn't seen that happening, very early before we spent a hundred million dollars. When. I also, early in my career I. Had. A sales job didn't, didn't last very long I wasn't a very good sales person so the. Organization, quickly concluded is get, this guy into another another spot. So. And. It. Wasn't a day I came home from work where. I didn't think hey I could have handled that situation. That. Meeting that. Employee that decision, a little differently and one. Of the things I learned to do learn. To do better maybe, I was good, at it but better was I learned, to speak less and listen more especially, as I became CEO. Because. Listening. To the team I had really. Bought out the best in our decision-making I wasn't, the smartest person. And, maybe none of the time. Thank. You I think those are very helpful to, hear. What. Another. Question here is what is your process in messaging, to employees, who are worried about an uncertain, future with potential. Loss of life and income source. Well. The message is there is you. Know there. Is hope I think. Being a realistic optimist, again you can't you. Know sugarcoat. It if someone's lost their job or their, spouses lost, their job or their children. Or Glantz their job. But. This this. Country and you. Know people, doesn't, matter whether it's United States or. Brazil. Or. France. People. Are Brazilian and I. Think. If you're if. You're a learning person, and. You're, willing to learn. New skills take. Some chances. You. Work hard and. You. Can create a future for yourself that's one that's, a positive one and to me the. We used to ask people at International, Paper why do you stay not, why do you join the company they stay because they've got opportunities learn develop and grow they. Like the work environment and. The, proud of the company they work for and, if. You're willing if you find that, kind of career which.
I Would, encourage all of you to not just go to a job go to a place you have some passionate about do something you're passionate about there's a not-for-profit or. For-profit, company. You. Can reinvent yourself you, know several times during your career, so. If there's some setbacks. Don't. Take those setbacks is being permanent, there are opportunities. To learn. A lot and then, get, back in the game. Okay. Thank. You. Another, question we had that's come in is, a few years ago Kerry was in the news with, the announced plan to close in Indiana plants, and move to Mexico. There, there. Was an employee iPhone, video the plant manager in Indianapolis, announcing, the closing. The, angry reaction of. The plant employees to all all, of, this include, and. So. Curious. How do you think managing, and, announcing. Closings, and layoffs should, have been handled better, great. Question we got a new best friend out of that experience. In. Washington DC I was actually at the Carrier Indianapolis. Facility of. Early. In March was. The last plant visit I made. It. Was March 9th and March, 10th things started to unfold. And. I would tell you it's. Very interesting the morale at the carrier facility. Was. High. And good I walked around the plant talking. A lot of people. Shaking. Hands which I then, I probably shouldn't have done but at that point in time it wasn't that wasn't taboo. But. People were interested. In how the facility was doing. The. Wanted. To ask what they could do to help could, be invest in it. What. We should have what, we should have done. With. Communicating, that to me I wasn't deeply, involved in it you know was on the board of United Technologies was. We. Knew the decision, was being made. But. You didn't, get involved in how it was done I think, it would, probably didn't, let employees know that. How. That plant was doing. Competitively. Compared to the other facilities, that we had in, Mexico and. One. In Tennessee, this, is a big one, a large facility that made residential. Air conditioned and you. When, you make decisions like that employees. Need to understand the context, at a time you, just can't drop something on somebody and they have no context, of how this is made and, the carrier facility, was not a competitive, facility, in, the, scheme of United, tech. So. The. And it, wasn't clear how we could invest to, make it fully competitive so we ended up not, closing at all but. More, or less right sizing, it to, what. It needed to be given its, competitive, leaders from shank changing, some of the product portfolio moving. Some products and some products out. And, in, telling the place the, employees, you you, can create your own future here. If. You. Put your efforts, into making this plant more competitive, and the management team is there to help you do that I mean we're, going to support you on this and so. In a period of four years we've, gone from having you know.
Core, Morale. Not, a good working relationship with effective. For leadership, to having I met. That the new, plant manager we bought in. To. Get to. Indianapolis and they're probably, close. To a thousand, people who work there and she's, she's. The kind of person we need she connects with people she's honest, she's transparent. She. Gets results she, celebrates. Recognizes. Success. Recognizes. People for contributing that success and. The. So, we had a situation was difficult and I think we've repaired it I'm, just got to keep going and the facility, needs, to stay competitive this is the, end of the day this is all about being. Competitive with costs. And products to. To. Be, able to invest in these facilities because companies. Have choices and they should make those choices. But. I don't think we educated, the employees, and. Prepared, them for, that this was a possibility and sometimes. You you. Think you've done that but you actually have. Another. Great learning, experience, and, we. Have one last question that's come in through the Q&A chat if anyone else has any other questions please feel free, to post them there. This. Question, comes, from a student, do you do, you recommend to handle, crises. And future matters, with parallel teams or with the same leadership team. We. Say. The question again stuck here I caught, it there sure, I do you recommend recommend, handling. Crises, and. In future, situations with, parallel. Teams or with, the same leadership, team oh I. Think it's, a function of you. Know have let that crisis affects. The. Some. Things should be handled locally because, they are local, and the. Leadership, team at the local level it's AIT's a factory, in. Czechoslovakia. That's. You. Know the manage team on ground there, knows. The issues. It's. Got the responsibility. And the capability, to kind. Of manage the. The. Issue whatever it is a, fire. Fatality. A, product. Issue, if. It's something, that affects the. Company around the world it's, obviously the senior, leadership teams gonna set the stage and the context, for that so. They can give guidance to the people around, the world is how to handle it so I think it depends, upon the. Location the, level and the severity. It. Was something like this the, Quebec crisis, where again. We're at full employment the. Beginning. Of February in the country and all. Of a sudden we go from full employment to probably. 15. To 20 percent unemployment, we haven't seen the numbers yet but they're gonna be big. You. Know that's something that we need to respond to company-wide. And. The communicated, company-wide and. Globally, not just not, just regionally, so, I think it's really a function of. What. The crisis is and, then you know how how, you've seen yourself respond, to it in the past, we. Were maybe. I think, we as a country are probably a little slow on testing. You. Know the medical community for sure it's. Going to go back and do a revaluation of, why is it taking so long to get the proper, testing regimes in place and. Try. To be, better prepared for the next crisis, we have is this. Probably won't be the last pandemic, hopefully, it's the last one we have in all of our lifetimes, but, there's another one out there is this gonna come. Great. Thank, you and I, think that's all the questions that, we, have coming in from the audience so, I think, we'll, end there I want to say thank you again John, this has been a fantastic learning. Opportunity. For all of us and we, really appreciate your, time. Ah thank. You to, our audience as well and for all of your great questions. Though. I think we'll, end there and be, well everyone and and take care well. Thank you Stephanie thank you for being the moderator and thank all of you for listening in and I'll. Just say one thing to end it I'm, confident, that all of you will end up with maybe. A different, career path and you might have thought different, timing, different. Place but. The. The. Economy and country in the world is going to emerge this and, think. Of what we were doing before, the crisis hit when the crisis is over. There'll, be opportunities. The. For, all of you and good. Luck good luck in the future thank, you.