Kent Kresa, the former chairman and chief executive of Northrop Grumman Corp., considers himself the antithesis of the imperial chief executive, valuing cooperation and teamwork over all else during his 12-year tenure. He says he can’t imagine any other way to run a Fortune 500 company, and he ought to know. Through a series of key acquisitions, he built the once-faltering Los Angeles enterprise into the nation’s No. 2 defense contractor by the time he left in 2002.
Question: How would you describe your management style?
Answer:
I would say I am a participative CEO. I believe in getting the best from people and listening to them, letting them make decisions. Very rarely would I go against a person who had a good rationale and logic for why they did it. If you put them in that position and they have the responsibility to make a decision, then they have to make it. But if they make the wrong one, then you have to get someone else.
Q: That worked as you built Northrop from a $5.4 billion company in 1990 to a $17.2 billion company in 2002?
A:
As long as you could have people who were capable and who were prepared to take responsibility, you could grow the pyramid substantially without any problem and that’s what I did. I worried about it a lot as we grew, but I kept on being surprised how resilient people were and how new people could be brought in who would very rapidly be able to assume more responsibilities.
Q: So what’s your take on an imperial chief executive who likes to control everything?
A:
I can’t imagine it because it seems like too much work. It’s an awesome responsibility if you have to make all the decisions yourself.
Q: More fundamentally, what’s wrong with it?
A:
The critical thing is the organization and not you. You want to get a team working together, and if you do that it’s the team dynamic that drives a corporation as opposed to a person.
Q: Is that part of the reason you instituted a mandatory retirement at 65 when you took over?
A:
I just felt that it’s important to have a transition at the top of a company. If the same person stays too long it will get stale. There will be no motivation for the people at the next level below to hopefully strive for your job, because you are going to be there forever.
Q: So how do these imperial CEOs get all this power?
A:
They acquire it because the board lets them acquire it. If someone has a style and they are making money hand over fist and they are doing everything ethically and everything right, I guess a board can overlook something like that but the only check you have on that is the board.
Q: What was your board like?
A:
Having independence and all of that was done early on. I instituted it when I became the CEO. We had put in a mandatory retirement age for board members and as people rotated off we looked for independence and capability and went after the very best people we could.
Q: So you found the job satisfying.
A:
Very satisfying. I had a very good run. We did the right things. We got on the right strategic course with a lot of hard work and with a little luck we were able to move dramatically as our marketplace shifted.
Q: Did you put in the long hours that some other chief executives like to brag about?
A:
I would roll out of bed at 6 a.m. and hit the treadmill at 6:05 a.m. I would generally get in the office at 8 a.m. but I would have spent a couple of hours ahead of that working out and reading all the newspapers. I would generally have a full day of meetings, or I would have meetings and then there would be something I would have to do outside and the day would go until it got finished. If there was something going on at night, it would be a change in the office into a black tie and go somewhere.
Q: So it was a long day but not ridiculous. Was that intentional?
A:
Yes. You could get exhausted and you would not be mentally fit the same reason that I worked out. It made a difference. If I ever got real stressed with something I would go run.
Q: Did you mind the media attention?
A:
You had to be careful in what you said, because whatever you said, as they ruefully say, you could see on the front page of The New York Times. But it never got me all uptight or anything. It never got me concerned if somebody wrote a bad story.
Q: How difficult was it to lay people off?
A:
All of it is difficult. One of the most important things is dealing with people. A company is a group of people who either do well or do poorly together. Making a decision on a critical person if you do it wrong it’s very bad; if you do it right it can reap great rewards.
