"It's March of 2015, I've just been named CEO of a $4 billion company, and I'm out there talking to Wall Street. The company was viewed as underperforming relative to pure growth, and we were below industry levels of profitability and customer satisfaction. The investors all asked me, 'What's your number one priority?' My answer was that I wanted to fix aspects of the company's culture.
As he shared with me, however, when he took over as CEO, Wall Street was skeptical of this culture stuff."I took it on faith that this will work," he told me."I spent three decades at Hewlett-Packard, and I know Bill and Dave built the company with an iconic culture. I know that if we go back to some of the roots of what made Hewlett-Packard such a great company at the time and really emphasized the importance of strategy, team, and culture, we would win.
These days, Agilent has the financials to back up the CEO's approach. When McMullen took over as CEO in 2015, Agilent's market cap was around $13 billion. In May of 2023, that number is over $38 billion. In 2015, their net income per share was $1.20, and now, it's over $4. But as McMullen told me,"In 2015, all I had was a story."
There's a lesson for Wall Street in those numbers that culture building ultimately shows up in the financials. However, there's also a lesson for chief executives; building a culture takes time and effort.