XVS-440-57MP1-1-1U Lian Xiaodong: In the course of nearly 140 years of development, Honeywell has made numerous acquisitions and acquisitions. At present, its business covers aviation, construction, medical, materials, chemical and other fields. What do you think is the core philosophy of Honeywell’s business?
Yu Feng: After serving as the CEO of Honeywell for 16 years, David Cote wrote a book to interpret Honeywell after his retirement, “Long-termism – Focus on short-term performance, but also invest in long-term growth”, from which you can see a lot of Honeywell’s philosophy, one of the key points is how to transform the business or organization into a performance machine to achieve both win now and win the future.
Honeywell is not good at one technology, not two or three products and businesses, we are good at integration. How can according to the needs of different customers, such as the medical industry, transportation industry, energy storage industry, the company’s four business groups, more than 30 different businesses, thousands of product portfolios to meet the needs of vertical industry customers, this is our great efforts to do.
To be specific, we must first choose the industry, do a good job of business portfolio and product portfolio. Honeywell has generally chosen large industries and is good at exploring cross-industry partnerships. We rarely enter niche markets, and from the very beginning, Honeywell’s ambition has been “to do something for the whole of humanity.”
For example, we have partnered with resource recycling companies to promote thXVS-440-57MP1-1-1U e recycling of cooking oil and plastics; For example, we are exploring cooperation with wind energy equipment manufacturers to carry out projects such as hydrogen production by water electrolysis using wind power. These partners have gone from “not being traditional chemical industry players” to now being “key partners.” These cross-industry collaborations aim to bring benefits to society and the environment through innovative solutions. While this transformation process is challenging, we are confident in the potential social and business value.
The second is to choose the right technology, which is our key skill, to match Honeywell’s large number of industries with high technology barriers. For example, Honeywell’s UOP EcofiningTM process can turn 6,000 yuan/ton of gutter oil into a sustainable aviation fuel (SAF) worth about 18,000 yuan/ton, which not only reduces the risk of gutter oil returning to the table, but also realizes the resource utilization of waste, helping to achieve energy transformation, and the conversion ratio is very high. The SAF produced with this technology can reduce greenhouse gas (GHG) emissions by up to 80% compared to fossil fuels.
If there are technologies and products that we can’t provide anytime soon, but our customers need them, and they fit perfectly with our strategy, we look for acquisition targets around the world. Earlier this year, Honeywell announced the acquisition of Civitanavi Systems S.p.A. As a leader in positioning navigation and timing technologies foXVS-440-57MP1-1-1U r the aerospace and industrial markets, Civitanavi has a similar successful history to Honeywell in developing innovative inertial navigation solutions. In addition, Civitanavi focuses on technologies such as high-performance fiber optic gyroscopes, which Honeywell did not have in its previous navigation portfolio.
In addition, people must be selected and managed well. Culture is also an important factor, and in some cases, the acquisition failed, mainly because of cultural compatibility problems. Large companies and small companies have their own characteristics, both good and bad, the merger of two companies may have problems, we must do a good integration strategy and specific action plans in advance.
Another important point is that we need to be big, but not blindly big. Honeywell’s annual sales revenue is more than $30 billion, but its market value has reached more than $130 billion, four times sales revenue, which is rare in such a large company. Now we see many companies are upside down, sales revenue is several times the market value, which means that the company is big but not worth much, naturally affecting the confidence of shareholders and investors in the company.
