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Abstract:
In 1991, AlliedSignal was in poor shape: morale was low, operating margins were lower than 5%, return on equity was only 10.5%, and--most troubling--the operating management team was weak. But by 1999, when AlliedSignal merged with Honeywell, it was a strong and thriving business. Operating margins had tripled, return on equity stood near 28%, and it had a top-notch management group. How did the company right its course? Larry Bossidy, CEO of AlliedSignal from 1991 through 1999, believes the turnaround was made possible by a dramatic improvement in people processes. And the extraordinary amount of time and emotional energy he put into evaluating, recruiting, and developing great managers-tasks that most CEOs delegate--was the key to this process improvement. In this First Person article, Bossidy explains why he believes the interview "is the most flawed process in American business." He talks candidly about how he assesses candidates and what types of questions he asks references. He also describes the four leadership traits he looks for when evaluating job candidates: first, the ability to execute--that is, being able to turn ideas into reality. The second trait is what Bossidy calls "a career runway." When Bossidy hires someone, he wants to hire him or her for this job and the next job, never for the person's final position. A third quality is a team orientation--good leaders are able to work well with others. And the fourth quality is having a wide range of experience. To build their skill sets, Bossidy tries to ensure that up-and-coming executives sit in many seats en route to leadership roles.