Des Moines Register: Former Rockwell Collins Division Head Is Taking the Helm
Web Note: Kelly Ortberg is an alumnus of the College of Engineering (BS 1982 mechanical engineering) and a member of the college's Advisory Board.
By Marco Santana
Des Moines Register
Kelly Ortberg sees no reason to change course when he takes over as CEO for Cedar Rapids-based avionics giant Rockwell Collins.
Even though the company has experienced an 11 percent drop in government-related revenue, it’s partially offset by a 7 percent increase in commercial sales. And it’s typical, said the 53-year-old Dubuque native.
“They tend to be countercyclical,” said Ortberg, who will take the multibillion-dollar Fortune 500 company’s helm Thursday. He replaces Clay Jones, a former U.S. Air Force fighter pilot, who retires after nearly 34 years with Rockwell. “We just saw that as we went through the credit crisis and challenges in the commercial markets a few years back. We’re recovering from that, but now we’re challenged with some of the defense cutbacks.”
As a former head of both the commercial and government divisions, Ortberg has had a front-row seat to those fluctuations. He said the company will likely see another down year in government sales in 2014, with the expectation that the market will flatten out in 2015.
Rockwell reported a 1.2 percent drop in total quarterly revenues earlier this month, with that number falling to $164 million.
“My No. 1 priority will be to continue to accelerate the company’s return to growth,” Ortberg told The Des Moines Register. “We have gone through a period of about five years of flat revenue. We are on the cusp of coming out of that flat-revenue period. Life is just more fun when you’re growing than when you are not growing.”
Last week, Ortberg sat down with The Des Moines Register in his Cedar Rapids office to talk about the company’s future, his past and his thoughts on technology.
Q: Explain the timing of the shift in leadership.
A: (Clay Jones) has been a fantastic leader for the company. But we think the time is good for a transition. The company is well-positioned in the market and we have a very solid leadership team in place.
Q. How do you make sure the leadership transition is smooth?
A. It’s a full-speed ahead transition. ... We have a good market share position that will last. We won’t see a course correction. I fundamentally believe in the core values of the company.
Q. Startups get a lot of attention when it comes to innovation. How do you innovate as a large company?
A. Technology is the lifeblood of our company. A lot of people think innovation only happens in small companies, and that’s not true. Innovation is critical to our company. We are continually focused on either new capabilities we can bring in to make airplanes more safe or efficient in its operations, or to allow products to be smaller, lighter and more effective in the marketplace.
Q. How do you think Rockwell performs in the race for innovation?
A. For me, it’s very gratifying to be part of these new program pursuits where we compete against other companies and where technology plays a role in successfully placing us in those competitions. We are inventing some new technology, but we are also out there looking at the latest commercial technology and figuring out how we can quickly bring that into our markets. And we do measure speed. We can do just what small companies do, but we do it in a microcosm within the company. Sometimes it’s less visible, though, because it’s overshadowed by the 19,000 employees and the revenue.
Q. Where does your passion to be a leader come from? When did you think you wanted to be a CEO?
A. I have always been a problem solver. I’ve always liked to understand how things work and figure out problems the easy way, which is using your head and not your brawn. I’ve always been inquisitive in that regard. When I was young in my career, I aspired to be a general manager. I wanted to run a business. I viewed the GM role as where I’d want to be. Once I got there, I realized I could do that in a broader sense (as CEO).
Q. Talk about your international business. How do you establish yourselves in new areas?
A. While not a course correction, there is still a lot of work to do for us to grow our international business. We will focus on getting the right people in the regions where we see growth. Success is fundamentally driven by having the right people in place. We can’t sit back here in Cedar Rapids and think we’re going to be a global company.
Q. How does a publicly traded company appease shareholders while making sure customers and employees are satisfied?
A. If you get out of whack on any of those, you create problems. The challenge is to keep them in balance. You do that by making sure investors understand the long-term prospects of the company. We have spent a lot of time with them making sure they can see the long-term returns they are going to get for investing.
For employees, it’s making sure they have innovative work and are challenged every day. They feel good about working for the company. For customers, it’s about delivering on time and having a high-quality product that makes their end product operate effectively. Trust really matters, but especially in our marketplace. We develop products that people’s lives depend on. The quality and integrity of those is absolutely critical.