George Buckley recently stepped down as CEO of leisure and fitness conglomerate Brunswick (NYSE:BC) to take the helm of consumer giant and Motley Fool Inside Value pick 3M (NYSE:MMM). In Part 2 of our interview from The Motley Fool Radio Show, Fool co-founder David Gardner talks with Buckley about the value of courage, his rise to the CEO spot, and how his grandmother defined his destiny.
David Gardner : As investors at The Motley Fool, we spend a lot of time trying to assess, as best we can, the character of the people managing the companies whose stocks we might buy. Now, that is not always an easy thing to do, and many of us, as small investors, feel very removed from the boardroom. George, you have spoken about the need for CEOs to have integrity. On this show, we have interviewed many CEOs over the years. Some have later even been accused of some pretty serious ethical and perhaps legal failings. Enron's CEO, Ken Lay, comes to mind. How can investors measure whether a CEO has integrity or not?
George Buckley: Well, I think one of the things investors do, and even one of the things that CEOs do, is you learn to become a good judge of character all the time. In the end, the best assessment that people can make is . the "heart condition" of people, shall we say -- the inner goodness of managers.
I think that these sorts of value systems that people have, we developed early in life, and I think the good investors can see through the marketing clutter, the quick phrases. I think they can see where the people are what they say they are. In the end, we should judge people by whether they do what they say. We should judge them by their actions, not by their words.
David Gardner : Hmmm. I have heard it recently said . that we tend to judge others by their actions, and we judge ourselves by our intentions.
George Buckley: Well, that may well be, but I think in the end, the only long-term judgment that anybody could make against us, by the way that we could make against ourselves, is whether we deliver on what we say we are going to do.
David Gardner : You said that courage is an important characteristic to have, and that "Courage doesn't mean you don't have fear. Courage means doing what is right even though you are scared."
George Buckley: Yes, that is absolutely correct. I think actually of all of the qualities of leadership -- we could list seven or eight qualities of leadership -- I actually think courage is the highest among them, because we are always faced by risk and by uncertainty and you can't always forecast everything. I sometimes joke about that line that forecasting is very difficult, especially when it concerns the future. So you can't always forecast everything in business.
So courage is necessary for a person to get off the dime and make the right kind of decision, a courageous decision, in order to make a company grow and improve on where it is today.
David Gardner : You have been CEO of Brunswick, a Fortune 500 company now, for five years. When have you had to use courage?
George Buckley: Well, I think one of the early times that I had to use courage was making decisions about what we would keep in our portfolio and what we would take out. Sometimes you are not always benefited by the ability to spend a long time analyzing those things, and so you have to make, in some cases, relatively quick decisions, and that calls for a bit of a strong stomach from time to time. I think that was one example.
Another one was in deciding to invest in our new Verado platform, where we invested over $100 million in a technology that was completely new to our company, which has in turn proven to be just a model of success, frankly speaking.
David Gardner : And could you give us a little bit more about that?
George Buckley: Well, that was a decision that we made . almost eight years ago, where we were trying to decide: Would we go down the four-stroke technology pathway or would we stick with the old and traditional two-stroke technology? We didn't really have the capabilities to develop that technology as well as we do today, and so the question was [to] make a technology decision and then make a people decision -- that you believed you could hire and develop and lead people down a new technology pathway that would change the face of the company. That is, in fact, what has happened.
That engine out there -- and I am just an engineer, I am not a marketer -- that engine out there is perhaps one of the few products that I have come across in my life where the reality actually beats the hype. I quote one of the writers in the marine press with that statement.
David Gardner : Discerning Motley Fool listeners will by now have detected that you don't sound like you are from Lake Forest, Ill. We know you are from Sheffield, England. George, what did you do, what did you want to do when you were a kid?
George Buckley: I always wanted to be an engineer, and like all of us, those ideas get planted in our minds by other people. My grandmother, I can remember being 3 years old, introducing me to one of her neighbors and this neighbor asking me, "So what are you going to be, George, when you're grown up?" My grandmother said, "He is going to be an electrical engineer." And I am.
David Gardner : And a little bit more besides. George, how did you end up at Brunswick?
George Buckley: Well, I made a few hops and skips during my career, but I came here via Detroit Edison in Detroit, where I worked on the design and operation of power plants, and subsequently through MSN Electric down in St. Louis. Then I came to Brunswick as president of Mercury Marine, and then I was fortunate enough to be picked as the next CEO about five and a half years ago.
David Gardner : And what was that process like? How long had you been with the marine portion of the company, and how long was the process for Brunswick [in] selecting its next CEO?
George Buckley: Well, I was with the engine business for about three years, and I think the process for selection was a relatively long one. Obviously, one of the important challenges of the board and even of the CEO was to try to make sure they have good people developed and picked for the next round. So these are the kinds of things that the board thinks about over a long period of time, and I was blessed enough to be in the right spot at the right time and get the nod.
Tomorrow: The costs of compliance and the market prospects of Mick Jagger.
We've struck upon further Foolishness:
- See why Brunswick makes a perfectly lazy stock.
- What makes Buckley the right man for 3M?
3M is a Motley Fool Inside Value pick. Want to find more top-shelf companies trading at bargain-basement prices? Sign up today for a free 30-day trial.
Fool co-founder David Gardner holds no financial position in any of the companies mentioned above. He is the lead analyst for Motley Fool Rule Breakers , heading up the hunt for the next ultimate growth stock.
