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Daniel Burnham is Chairman and former CEO of Raytheon Company. He is Chairman of the President's National Security Telecommunications Advisory Committee (NSTAC), a member of the Defense Policy Advisory Board on Trade (DPACT), a Trustee for Xavier University, a member of the Business Council, and a Director of FleetBoston Financial Corporation.
Mr. Burnham was born in Pontiac, Michigan, in November, 1946, received a bachelor's degree in economics from Xavier University, and then received his MBA from the University of New Hampshire.
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PH: What was the first job you held after college? (If not applicable, perhaps because you didn't attend college, or because you went from college into graduate school, please feel free to describe a similar, relevant experience from that time in your life. Similarly, if you feel that the first few jobs, rather than the exact first job, per se, made a difference to your experience, please describe those instead)
DB: I received my undergraduate degree in 1968, right in the middle of Vietnam War, and I had an ROTC commission. [After graduation,] I went directly to grad school at the University of New Hampshire for 2 years, and got my MBA. When I got out, I went to the army. After 3 months, President Nixon reduced huge numbers of young lieutenants. So, really, without too much anticipation - I was out in the job market with about 2 weeks of anticipation, not really having expected to be in that position.
I was down in Newport News, VA. I didn't know anything about getting a job. I mean, I came from a very modest, very modest background. I didn't know the first place to start! I saw a couple of ads for people with financial backgrounds. I had great grades, and I had a good sense with numbers, so I applied for it.
I was working at RCA Computers Systems division as a budget analyst. I took the job because it was the one offered! (Laughs loudly) It seemed like a really neat job. After one year, though, RCA got out of the computer business. I was driving home one day, and I found out on the radio that all 10,000 of us were going to be laid off - just like that. After 12 months, my job was gone.
It was a major shock, no question. I had a child, and my wife and I had another on the way. I had NO money, you understand. It was a very, very tough time. I moved into my parents' basement, to save money. We were down there only 4-5 days, which was good, or we would've killed each other!
PH: How did you move on from there? That must've been a pretty big shock.
DB: Just looked at the newspaper ads, dusted off my resume, and started looking around. I remember standing in my mother's living room, and the phone rang, my mother answered, gave it to me. The job offer came through, and I said no thanks. I hung up, and my mom said, "Who was that?" I told her what it was, and she said, "I can't believe you didn't take it!" She was really unhappy about that.
I didn't want just any job, even then. I wanted something that would excite me and keep me engaged. I ended up with a great company, one that's not around anymore, but it was a Fortune 250 company.
PH: What was it called?
DB: Carborundum. [Spells it out]. It was a great company. The reason I liked it was that they offered me the chance to do a lot of different things. You see, I was a finance guy, but finance, for me, was just a way into big business. To me, big business was a good thing, by the way. My dad had worked at GM for a number of years, and I thought of big business was a good thing. So while I had a finance degree, I liked the fact that at this company people were moved laterally from function to function. For example, the controller of this division that I went to work for had a manufacturing background, and the guy who ran the factory had a finance degree. There were lots of stories like that. I wanted to rotate and get a variety of experiences, and have some good responsibility early.
PH: So it was really the versatility of the position, the fact that you'd get broad-based managerial experience, that appealed to you?
DB: Yes, that's right. It was really the chance to rotate and do a variety of things. For example, I wasn't there for 3 days before I was given an assignment to decide whether to close a factory. That's it - me, just a young guy, told to figure this huge, huge problem out. I went to my foreman, looking for some advice, and he was basically telling me to figure it out on my own. Can you imagine that? I was talking to a group VP within a month - and this guy was a big deal, one of the senior officers of the company and all that - just because that's the kind of project this was. It was just me, a 23-year-old kid in there, talking to a 50-year old.
PH: That's interesting - I don't think most people associate that kind of experience with big business. It sounds like you had an almost entrepreneurial experience at Carborundum.
DB: Yes, that's not what people expect from a Fortune 250 company, but that's the kind of place it was. The HR person was a career GE person, very focused on talent management, and - also, I don't know if you've heard of Bruce Henderson -
PH: You mean the founder of BCG?
DB: Right. And Carborundum was one of the first BCG clients, using what were then very modern methods. The company recruited at good schools, bringing in good people, and there was always a focus on developing talent. It was just a great place to work at the time.
PH: So what were your goals in taking the first job? I guess I'm talking about RCA, but also as you made the move to Carborundum, since that seemed to make a big impression on you. Did you have a specific financial or career milestone in mind?
DB: Well, the first one is to feed the family. (Laughs) No doubt about it, you've got to take care of the family. (Laughs again) Second was I had to be intellectually challenged. My first job at RCA - while I admired the company, it was a good place, and I don't want to convey the wrong impression - intellectually [for me], it was a wasteland. I had a very boring job, honestly. While I was getting a good salary, I was not heartbroken when it was shut down. I wanted an interesting job, and I was ready for a change. But I needed money to pay grocery bills!
PH: It's interesting that even in the midst of fairly rough times, you were still keeping your standards high - that you turned down the job offer you mentioned.
DB: Well, it's interesting. I was only there [at Carborundum] for 9 months, 12 months, and I was walking over to eat lunch with 3-4 analysts at my level. I remember this very clearly. They tended to hire from good schools, most of these guys were from Harvard, Dartmouth business schools. I remember this Harvard guy talking about how good it was to have excess, ah, funds, and I was thinking, "Hey, I don't have any extra money!" You've got to understand, we were really on a tight budget in those days. Well, I found out that this guy made $100/month more than I did. I remember this day like it was yesterday. I felt like I was every bit as good as this guy, and by god, it was like turning a switch in me. Goddammit, I'm every good as this fellow. I really remember thinking that! I became very competitive at that point. Up until then, I think I was a little more passive, and took what came to me, but I realized then that maybe I needed to be more aggressive. I remember this all, that day, like it was yesterday.
Now, understand, I don't think that was the biggest of moments! (Laughs) I think I could've gotten my motivation in a better way, and I think I was a little more provincial in my thinking then. But boy, I do remember it like it was yesterday! (Laughs)
Phyllis: I believe there was another CEO who went to UMass and Illinois, and who did pretty well for himself, too.
DB: Well, yes - ah, yes, but I don't mean to put myself in the same class as Jack Welch. I mean, he's a very talented guy. I don't mean to say anything bad about those schools, either - I've worked with a lot of very bright, very talented people from Harvard and Dartmouth - and well, it was just stands out in my memory. I mean, this guy [who was talking on the way to lunch] was very arrogant, very full of himself, and it just really hit me, that goddammit, I was no worse than he was.
PH: Great. So let's take a step back, then. In approaching RCA and Carborundum, did you strongly consider any alternatives to those jobs?
DB: By the way, have you ever heard of a phrase involving the word "carborundum"? It's possible you may have heard of it from a relative or someone who was around in World War II.
PH: No, actually, I haven't.
DB: Here's the saying: Illegitimai non carborundum est. (sic) It means, basically, "Don't let the bastards grind you down." Just something to remember.
PH: Thanks. I hadn't heard that before, actually. So returning to the question, did you think about alternatives to your first job or two? Was there anything in particular about those positions that made them more attractive than alternatives?
DB: Really the opportunity for multi-functional assignments. I didn't want to be pigeonholed as a finance guy. I knew that very clearly. I did [finance] because it was easy - I was quick with numbers, and I knew how to analyze businesses - but I didn't want to do it [alone]. I wanted to run something.
PH: Where did that fire, that ambition come from?
DB: I don't know. I've never really thought about this that much. Going to Carborundum was an opportunity for intellectual curiosity. As I started to do those different things, across business units, I started to see the richness of business. I started to see the ability to link between many different things - It was that networking and assimilation of differences that I found interesting. It was interesting, as opposed to a power trip. I wasn't in it just for the ability to control things - It started out more as curiosity.
As I began to get analytical assignments linking together manufacturing, finance, and marketing, I had the chance to do a lot of different things, and that really helped me grow.
PH: How did your career progress shortly after you took the Carborundum job? Do any resounding successes or failure stand out in your mind?
DB: Pretty rapidly. I guess I lucked out in that I had a couple of senior guys who tripped across me. You've got to be visible, and I had that. I got involved in putting together the business plan for this division. Again, it was one of those experiences where you just have to jump in and do the job. I don't know how I did it. The CFO liked [the work I did], and brought me into corporate staff, and I started getting into business planning. I met Bruce Henderson - I mean, he wouldn't know me now, but I was working with his team and all that - and I became the BCG guru within the company, pretty quickly.
To make a long story short, I was corporate controller at 26-27. Then in 1978, a tender offer was made for us - unfriendly. So we went out to try to find a buyer -
PH: A white knight?
DB: That's right - a white knight. That was actually the first time that phrase came into use, I think. It was critically important for us to find a good buyer, and so they put the COO, the CFO, and me on a team, to sell the company. We had about a month to do it, and we did it. By coincidence, the company that I became the primary interface with, ended up being the one that bought us. I had to put together a business plan on the whole company, present it, and then put it into action.
I'll never forget - The first pitch I made was to Felix Rohaytn - I had to pull this whole business plan together, all the notes, everything. It was a lot like 3M would do it. A lot of businesses, lot of data, a lot of marketing, too. The meeting was supposed to start at 9 am, and the books were all assembled at 10 to 9. I thought the CEO was presenting. Well, the CEO asked me to sit down, introduced me, and then he told me to present. I had to present for an hour! As you can imagine, that was a bit of a surprise, but off I went. Felix came up to me afterwards and said, "Kid, that was a hell of a job." That felt damn good.
Through experiences like that and others, I was thrown into the world of big business. (By the way, Raytheon was a bidder in that original auction [for Carborundum], and that's when I met them, though it didn't relate to my joining the company later.) I met the very senior Morgan Stanley bankers, all the people from big firms, and I was very impressed, but I didn't felt that we were, ah, qualitatively different (Laughs) - Because I'd worked with them, and I'd held my own! It just didn't seem as scary to me after that.
PH: What happened after that? How long were you at that company?
DB: Kennecott Copper was the acquirer [of Carborundum] - I became head of planning there. I didn't want the job, but they offered us a lot of money. I had just a huge office in NY, absolutely huge, but I hated it. When I was asked to go to NY, I asked my boss about it. I said, "Hey, I don't really want to go out there." He told me to put an outrageous salary demand, so that they'd turn me down. I was making $50,000 at the time, I asked for $70, and they offered $72! Well, at that point, I couldn't really say no.
But after awhile, I really didn't like the job, even with the office and the salary and all that. I called Carborundum, which was then a smaller part of the company -
PH: A subsidiary?
DB: Right, like a subsidiary - and I told them I wanted to come back. Well, they said they couldn't afford to pay me what I was making. They offered me a product manager position, but said, "There's no way we can afford to pay what you're making now." I kept asking how much they would offer, though, and they finally offered $50[K]. I took it. Now, my wife wasn't very happy about this decision (Laughs). I came home one day and said, "Guess what? We're going to Buffalo, and my salary's going from $70 to $50." She wasn't happy about that at all! (Laughs)
But at Kennecott, I wasn't connected to anything. I wasn't managing a product. Here I was in the world of Felix Rohatyn, walking with the giants, so to speak - It was very exciting and all that, but it wasn't what I wanted at the time. [In Buffalo] Sure, I was making less money, but I was still learning a lot of things in the new job. I went into marketing, and from there became a GM. [Even at $50K] I was still making more money than I ever expected, so that was a hell of a cool thing.
[Several years later, around when Burnham was 35 or 36,] Allied called me to be controller, and I turned them down. They called me back, and couldn't believe that I wouldn't even interview for the position. I realized that maybe I was coming off as arrogant, so I decided at least to interview. At the time, Carborundum was owned by Kennecott, which was held by Standard Oil (now BP). I was told that guys from the oil business would never get much chance to advance at Allied, but the guy who'd be my boss there told me, "Listen, you come here and work hard for 2 years, and if you do well, I'll give you a chance to run a business." He was true to his word, too. 23 months after I started [at Allied], I was given a business to run. Business to run within 2 years
PH: Did you have any early mentors, individuals who played an important role? Were these people that you met on the first job, or earlier in life, or later?
DB: I had a couple of mentors, but they didn't know it. Nobody has to know they're a mentor. I know the traditional assumption is that you go and ask someone, and they do specific things for you. That's bullshit. He or she could be good or bad, but as long as you learn [that's what a role model is]. One guy I followed was a skillful businessman, and I tried to watch him, and I tried to mimic him. The other guy was a complete asshole. It was like the Berenstein Bears - just be the opposite! (Laughs) But in his own way, that guy was a role model.
PH: Over what period of time did these "mentoring" relationships last? Were they long-term, or relatively brief? One interesting thing I've found in my survey so far is that a lot of people don't seem to have the lifelong mentors, but instead go for situational role models who shift over time.
DB: The first one was 7-8 years, the negative one was about 3 years. I think you've got it exactly right that role models shift over time and situations. At Allied I had another one. He was terrific. And my best mentor was Larry Bossidy [the CEO of AlliedSignal] - again, he wouldn't have known he was a mentor.
Larry joined Allied in July 1, 1991. I remember the date very clearly because that was the same day I was made Executive VP of all of aerospace, which was the biggest business [within the company]. During his interview, about a week before, Larry was asked - and I knew he was asked this - how he felt about this kid running the division. Actually, I guess I was 45 at the time; anyway, he was asked if this kid [Burnham]was okay. Larry said, sure, no problem - because he'd fire me if I wasn't good.
So I knew very little about aerospace, and here comes Larry. He came out to Torrance, where the aerospace business was headquartered, maybe within 3-4 weeks of getting that job. I had to present the plan, without much preparation or really very in-depth knowledge of the business. It's a hugely complicated business, with thousands of products - So we do all this work, get all prepared.
Everyone knows that when you're meeting with Larry Bossidy, if Larry says 7, you should be there at 6:30. I was usually getting there at 5:45. Well, that morning, I drive in in a convertible, and I notice a smell - I thought there was a fertilizer in the lawns, or something. But when I got in the office, I still notice the smell - it was a godawful odor! - and after standing up and looking around, I realized my cat had crapped in my car. I had gotten it all over my pants! Oh my god, this meeting was getting ready to start, you know, it's nearly 7, Larry's here, and so on. I called my wife and asked her to bring me new pants, I've got the door to my office closed, the door to my bathroom closed, and people probably thought I'd died in there! (Laughs) I scrubbed and I scrubbed, and tried to wash.
Anyway, after awhile, the odor's not coming out, and it's 7 am, so I come out, I go downstairs, into the conference room. Everyone's in their chairs. I walk in barely on time. This terrible odor wafts out of me, it really encompasses the entire room - My whole life - my whole working life! - is on the line here. If this guy doesn't like me, I'm unemployed by noon. Larry just looked at me, just stared me down.
Well, after the meeting's gone on for a couple of hours, we have a little break, where everyone can get up and go to the restroom, make calls, and so on. I leave, go upstairs, and by then some new pants have arrived, all of that. I change, go back to the meeting, and Larry had just incinerated my chair. He just couldn't stand the odor! (Laughs)
PH: It seems from this story and others, and the dynamic I'm seeing with Phyllis, that you've got a bit of the common touch. Do you think that's a good characterization of your style?
DB: It wasn't purposeful, but I have learned over time that I connect well with all folks. I tell this to young folks all the time: You can be smoked out in a nanosecond by the people on whom you rely. The people you're working with may not have graduate degrees, but I look at them, and I see my mother, my cousins, my friends growing up. I think they're regular people. I treat them all the same. Not because I'm trying to manipulate them, but because that's the way to lead: you treat people right, treat them fairly, and most of them will respond and push towards goals.
Humor is a good way to relate to people, too. I want people with real personalities, and real lives, who can joke me. I love it when people treat me with disrespect. (Laughs) I mean, you should've seen Larry [Bossidy]. With Larry, NO ONE ever doubted who the boss was, but we used to joke with each other all the time. And he'd tell us to go stuff it in the you-know-where (Laughs)...It all helped build a spirit of camaraderie.
Phyllis: You might talk a bit about how you tried to inject some of culture into Raytheon, when you came here. It seemed very deliberate to me.
DB: You have to understand, Raytheon is an old New England company, which had great history, great roots, great technology, but it wasn't really a marketing company. I had to surround myself with people who knew the company. I had to get people to feel like they were part of the future. If we weren't all focused on the success of the entire enterprise, it we'd be in trouble.
On my very first day, July 1, 1998, I sent a letter to all employees, which had never been done before. What [the letter] did was describe what a great company this was. So that these people knew what we were there for. From the very first moment, there had to be more than just work!
Then [after the first letter had been sent] we followed up with processes and tools and structure. At some level, I didn't introduce new ideas. I just laid out all of my ideas on that first day, and everything after that was execution on those ideas. It was a very strong framework that we started from. You see, I have a very active mind and a short attention span, and you can't let yourself be distracted by every idea that comes along. I needed to stay focused, and I needed to keep my team focused. That's why the ideas laid out on the first day were so important.
PH: Great. Thanks for that story. So now as we come to a close here, I'd like to ask just a couple more questions. First, can you cite any particular axioms/saws/epigrams that you followed in pursuing your first job and subsequent ones? This may have been something told to you by a friend or relative, or it may be something you read, or perhaps even something you created yourself.
DB: The recognition that the core strength of any senior executive - I know this will sound trite and hackneyed, but it's very true - is integrity, no question about it. People will follow you, as long as you're honest. If they smell that you're just in it for yourself, no one will follow you. The thing that has shocked me the most, looking at things like the Enron situation, is how these guys got to senior leadership positions with a lack of integrity. How did they get people to follow them?!? How were they able to hide their lack of integrity for all of those years? I just can't imagine how they managed to get ahead acting with those values.
The second thing [I tried to practice] is deep respect for the humanity of each person. It's important to recognize that work is ennobling. It's not just to accomplish certain ends. If you focus just on the ends, you're missing a lot of what people are motivated by. I tried to remember that in what I did.
PH: Okay - now my last question in this interview: can you remember any "forks in the road", proverbial crossroads at which you had to make a difficult decision about your first job or career? (This could have been an ethical dilemma, a choice between two competing visions of your future, a significant distraction that almost derailed your career, or whatever. Again, this question is asked in an open-ended fashion, and any answer can be a correct one, as long as it's honest).
DB: Well, certainly, the decision about whether I stay in NY and make a lot of money and have the big office [with Kennecott Copper], or do I go back to Buffalo [with the Carborundum subsidiary], take a cut in pay, and go into the field where you don't know much?
(Muses) A second [juncture] was when I was really successful at Allied running a big chunk of chemicals, and I was asked to go out to aerospace, and the guy [who was my boss at the time] didn't want me. I had to go all the way to LA, and if I failed, I would've been unemployed and starting over at 43.
What's wonderful about the American system is entrepreneurs, and the face that you can bet and win or lose. I was talking to an African-American gentleman recently, the head of a huge, very successful company, and I was asking him about his early days, before his career was established. When he was trying to get his companies up and running, I asked him how many mortgages he had at the time. He told me had three, and I asked him how many the bank thought he had. He told me they thought he only had one.
What makes a guy feel like he can run a big organization if he hasn't risked something for that position? If you haven't put it all on the line [yourself], you're going to be a bureaucrat, not a builder of organizations, not a leader! If you haven't faced risk yourself, you're not going to have the confidence and the decision-making ability to do well in a position of responsibility.
PH: That's interesting. So when you faced the risk yourself, in those two situations you mentioned, how long was your decision-making process? Did you mull it over for awhile, or -
DB: No - The decisions took less than a day. When the people at Allied asked me if I wanted to go to LA [for the aerospace job], that was pretty much something I had to do. I had at least to go through the motions of thinking about it. I told my boss I wanted to negotiate, and he laughed. He told me, "The negotiation is over. You're going." I had a chance to run the biggest part of the company, and to learn something I'd never learned. Now, it wasn't easy, because the Allied (chemical) and Signal (aereospace) people didn't mix. The very fact that I was coming from the HQ, also, was not going to make me popular. But after I talked it over for a night with my wife, I was ready to go.
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