To prepare for Yom Kippur the advice of all leading mashgichim is well known: Take on only a few undertakings for the new year and of realistic size. If chosen properly kabbalos of this kind can make a huge difference and have ramifications far beyond anything contemplated. The story of one company and its forward-thinking leader provides a case study in the power of choices and commitment.
In Charles Duhigg’s The Power of Habit: Why We Do What We Do in Life and Business we meet Paul O’Neill who became CEO of the aluminum giant Alcoa in 1987. For nearly a century ever since its founder invented the process for smelting aluminum the company held a dominant position in the industry. But by the time Alcoa turned to O’Neill it had become something of a dinosaur as newer leaner more innovative companies cut sharply into its market share and profits.
At the press conference introducing O’Neill to Wall Street investors and stock analysts O’Neill set forth his goal for the company: To make it the safest company in America. He said not a word about business strategy or profits. When one perplexed investor asked about capital ratios and inventories in the company’s aerospace division O’Neill replied that the questioner had not been listening. Alcoa he reiterated would be judged by whether it significantly lowered its number of workers injured on the job.
One portfolio manager rushed from the meeting to advise his twenty largest clients to sell Alcoa shares as it was clear the new CEO had no clue what he was doing. That proved to be bad advice. Over the course of O’Neill’s tenure from 1987 to 2000 the company’s share value multiplied five times and its market capitalization increased by $27 billion.
