Hennessy’s ouster - first reported in The Wall Street Journal - was surprising, but not unforeseeable. About eight months ago, after it became clear that he had not groomed a successor, Allied called in the executive search firm of Heidrick & Struggles. While Bossidy had been told about Hennessy’s desire to stay on and nurture his heir, the GE executive would have none of it. “I didn’t think it was appropriate to go into a training mode,” he says. “[In my view] if they weren’t ready now, they probably ought to pick someone else.” Bossidy’s colleagues in corporate America say such behavior was not surprising. “A man capable of being a CEO normally doesn’t want to sit around like a lady-in-waiting to the court,” says Harry Gray, former chief executive of United Technologies Corp. and Hennessy’s former boss. “You want to take on your responsibility as soon as possible.”
Bossidy may be a much different leader than his predecessor. While both are Massachusetts natives with backgrounds in finance, their careers have taken sharply different turns. Hennessy, a former seminarian, started in business as an accountant and held executive positions at several major corporations, including ITT and United Technologies, where he was viewed as a possible successor to Gray, but later fell from favor. Bossidy has spent his entire career at GE, rising through the ranks. Described by some as “impatient,” Bossidy acknowledges there is some truth to that description. “I don’t expect to change my style,” he says. “It served me well at GE.”
If it serves him well in his new job, Allied’s stockholders will be quite happy. Bossidy’s strategy for turning the company around is a matter of much speculation on Wall Street. Some analysts believe he will push for a cut in Allied’s stock dividend, since the company is expected to spend $800 million more than it takes in over the next two years. Less clear-cut is how he will cut Allied’s high research-and-development budget and reduce the costs associated with cleaning up the company’s chemical facilities. Still, Paine Webber analyst Eli Lustgarten has upgraded his assessment of the company’s stock based on the leadership change. For his part, Bossidy isn’t saying much about his future plans. But he makes it clear that he will not take the chance his predecessor did. “I plan to groom a successor,” he says.
