Brad Lawrence had been chief operating officer at Esterline
Technologies for just nine months when he was appointed CEO of the leading
aerospace and defense supplier in June 2009, replacing longtime CEO Robert
Cremin. Before joining the company in 2002, Lawrence held various executive
positions at Rockwell International, Paccar and Flow International.
Youth: I was raised in western Pennsylvania near Pittsburgh,
where most of my schoolmates were factory workers’ kids. My dad worked long
days as a service manager at Buick. When I became a caddy at the country club
at age 12, I had to enter through the back door. I wanted to walk in the front
door. That was a great motivation for me. I wanted to be like the guys on the
golf course, not like my neighbors going to the factory with their lunchboxes,
although there is nothing wrong with that.
Values: I worked as a car jockey at the car lot, pumped
gasoline, mowed lawns and shoveled snow. Once, my mother sent my father to the
store to buy a suit he could wear to the Lions Club. When I saw something I
liked, my father [instead] bought it for me. He came home without a suit. There
wasn’t enough money for both of us. I never asked for anything again, because I
knew if I got something, someone else was doing without. It’s hard to teach the
value of work and the value of a buck to kids. My kids walked in the front door
of the country club all their lives. They would say, “We’re not allowed to wear
jeans. I don’t want to go there.” It broke my heart. A significant motivation
for me was to be part of that class and they were rejecting it.
Education: In college, I had a lot of friends who didn’t do
well because they lacked discipline. I had this drive to succeed. I was the
first in my family to go to college. With the sacrifices my parents made
throughout my childhood to send me to college, frankly, I didn’t want to
disappoint them. Not succeeding wasn’t an option.
Career: It never occurred to me to be a CEO. But I observed
the business leaders around me, and began to see a common set of
characteristics for success. Subconsciously, I emulated those key
characteristics of success. After a while, I always felt I could do my boss’s
job.
Secrets to Success: I worked at two divisions at Rockwell.
My boss at one was a studied engineering type. He was thorough and ethical but
low key. The other was the prototype of a marketing and sales type. He got all
the promotional opportunities. I learned that the truly successful people were
those who could organize groups of people to achieve something greater than
what the people in the group believed they could accomplish.
Manufacturing: It’s becoming easier all the time to remotely
run a manufacturing facility and take advantage of lower costs overseas because
of how cheap communications has become. It’s ever more a challenge to compete
in America with North American costs, but we do that successfully every day.
What we do is focus on products that are what’s called “low-volume, high-mix”
manufacturing [producing a large variety of products in low volumes]. It’s not
worthwhile for another factory to invest in the tooling to produce such small
quantities, so these businesses are usually sole-sourced. We also look for
areas like airplanes where products are highly engineered and highly regulated.
[Government agencies and customers often audit the production process.] When
you put those factors together, it’s best to manufacture in the U.S. close to
the customer.
M&A: We also want to be number one or two in the niche
area we are in. In five years, we will still be primarily an aerospace and
defense company. We see enough opportunity to keep growing at a compound annual
growth rate of 20 percent. Since customers [like Boeing] want more content from
fewer suppliers, you have to be a consolidator or you are marginalized. We will
continue to make acquisitions.
Boeing 787 Delay: It did degrade the expected return on the
investment we made in the 787. But on an intellectual level, I’m not surprised.
It’s a brand new process at Boeing with complicated materials, science and
outsourcing issues. But this is a breakthrough aircraft for Boeing and for the
U.S. as an economy. I’m a big fan of the 787. Still, only 10 percent of our
revenues come from Boeing. About the same [percentage] come[s] from Airbus.
Local Employment: I would expect it to grow. We just built a
brand new facility in Everett. The whole concept was built around lean and
mean. We’re building the overhead panel for the 787 there.
Boeing’s Competition: There’s competition [in aircraft]
coming up from Russia, Brazil, China and Japan. We plan to sell to them. In
this economy, you must sell outside of the U.S. Today, half of our sales and
half of our employees are outside of the U.S. For our size, that’s unusual.
This is a global market we are in and we are positioning ourselves to be a
player in all of those regions.
Esterline’s Culture: We de-emphasize hierarchy. We minimize
the individual and emphasize the team. Executives have no reserved parking and
get the same benefit plans as people on the shop floor because we are all in
this together. We fight bureaucracy. We have only 40 people in corporate staff
in spite of the rapid growth in our company. We encourage entrepreneurship.
During reviews, the field leadership is required to address opportunities in
adjacent markets for new products.