JCI’s key Man – Jim Keyes

Johnson Controls CEO Jim Keyes
As chief executive of Johnson Controls, Inc., a multi-national company with 76,000 employees and $12.6 billion in annual sales, Jim Keyes faces numerous challenges as he works to keep Wisconsin’s largest company out ahead.
So how does a CEO with 10 years at the helm keep abreast of goings-on in a global company so large and spread out?
He reads plant safety reports. More than just a record of safety practices, the reports tell him a lot about morale and management of a particular plant.
“It tells how well our people are looking out for out employees – how they are treating them,” says the 58-year-old Keyes, who is the 1998-99 Sales and Marketing Executives of Milwaukee “Marketing Executive of the Year.”
If Keyes sees a plant racking up a lot of safety incidents, it’s an indicator of a larger problem, he says. Seven years ago, Johnson Controls automotive battery plant here in Milwaukee was the corporation’s worst performing unit in terms of safety. One manager threw up his hands and said the injuries were due to the heavy lifting that goes along with making car batteries.
Keyes made sure the safety issue was addressed, and today the battery plant is Johnson Controls’ best performing unit when it comes to safety.
“Safety reports tell you a lot more than just how safe the working environment is,” Keyes says in an interview at the company’s headquarters in Glendale. “It’s usually a sign that morale’s getting bad or something’s going wrong.”
It is that kind of analytical ability to focus and fix problems that has seen Johnson Controls quadruple sales during his tenure – from $3.1 billion when he took over as CEO in 1988 to $12.6 billion for the fiscal year ending Sept. 30, 1998. Sales rose 13% in 1998 over the previous fiscal year, with each of the company’s business units achieving record sales and earnings.
[Johnson Controls is the largest car battery manufacturer in North America. The company also makes automotive interior systems, and controls which regulate indoor environments. It also manages more than 600 million square feet of building space as part of its Integrated Facilities Management division.]
Keyes sits on the board of a number of Milwaukee area organizations. Marquette University President Father Robert Wild says Keyes lends a keen analytical presence to Marquette’s Board of Trustees.
“He misses very little,” Wild says. “He is wise. And he is not afraid to speak up if things should be done in a better fashion, He is a person we listen to and take very seriously. We are very fortunate to have him on our board.”
Keyes is an early riser, getting out of bed at 4:30 a.m. for his swim at the Milwaukee Athletic Club. He’s in the office by 6, and typically works a 12-hour day. He attributes that tendency both to his father – who worked until he was 80 – and his small town roots in Belmont, a village of 800 residents in southwestern Wisconsin.
“I think, for the most part, that people from smaller communities have a very good work ethic,” Keyes says, pointing to the success of Gov. Tommy Thompson, who is from Elroy. “But there’s a lot of luck involved.”
Keyes frequently travels internationally to stay abreast of Johnson Controls’ far-flung enterprises. Last year, the company acquired Becker Group and its European subsidiary for a reported $550 to $600 million, a move which is expected to increase the company’s international sales of automotive interior systems.
Organizations that stand still risk losing whatever competitive edge they currently possess, Keyes says, adding that product innovation and new product development are critical to the long-term survival of a business. [JCI’s Inspira thin-metal battery is significantly smaller and lighter than traditional lead-acid batteries, and could reduce vehicle weight by 20 pounds when it is introduced two years from now.]
Keyes is a major proponent of process improvement.
“We live in an environment where we don’t get price increases,” Keyes says. “Every year, our customers want price decreases in some form. So a lot of that cost reduction has to come from changes to make our process more efficient. We spend a lot of time on that.”
In meetings with his top managers, Keyes asks what the various business units can do to ensure that they are following the best business practices within their industry, or anywhere on the planet, for that matter.
“You’ve got to continually raise the bar,” Keyes says.
Since he first took a seat on the Johnson Controls board in 1985, the company has shifted its primary focus from building controls to automotive systems. Just as the business has changed over the last 13 years, don’t expect Johnson Controls to be the same company it was another 10 years from now.
“Business is going to keep changing very rapidly,” Keyes says. “I believe we are entering a period where all businesses are going to be greatly impacted by the Internet. Electronic commerce will make a great change, so the way we do business will be different, and the product we sell will be different.”
But the basic values of the company, Keyes says, will remain the same.
Keyes is a big believer in human capital as a strategic asset. He says acquiring talented people and putting them in the right position is a key to any company’s success, and should be part of any growing company’s strategic plan.
“If you spend more time there, you’ll need to spend less time in other places,” Keyes says. “At our last management meeting, both myself and our president stressed to our managers that they need to have top talent underneath them, because if they had to do the same thing tomorrow that they are doing today, then they aren’t going to grow anymore.”