Clay Jones: 'We knew that the world was changing'

Since 9/11, a "constant drumbeat" has affected Rockwell Collins, the nation and the world, said Clay Jones, as he considered his pending retirement from the international avionics giant he has chaired since 2002 , for which he has served as CEO since 2001 and as president since 1999.

"We have seen the SARS virus, the war in Iraq, the war in Afghanistan, mortgage meltdown, credit crisis, defense downturn and sequestration," he said.

As the former Air Force fighter pilot prepared to turn the leadership of Rockwell Collins over to his successor, Kelly Ortberg, on Aug. 1, he reflected on decisions and events that shaped the $4.7 billion company during his tenure. (View a timeline of Clay Jones's career here.)

"When we started the transformation of Rockwell Collins in 1997, there were about four or five years of massive change within the company that set us up for 12 years of massive external change that we had to react to," said Jones, who retired July 31 after nearly 34 years with the company.

"Had the company not gone through that first four or five years, I don't think it would be as resilient as it is now."

• Also read: New CEO plans to accelerate Rockwell Collins growth

"The massive change within the company involved putting a whole new business model together and integrating four disparate divisions as well as new acquisitions. We instituted new efficiency processes like LEAN electronics and adopted a sweeping IT business system using SAP software.

"Ultimately we took the company public in July 2001 - which was a huge change for us. All of that happened between 1997 and 2001, and it got us ready 10 weeks before the world changed" with the Sept. 11, 2001, terrorist attacks.

Several major initiatives enabled Rockwell Collins to reposition itself as it adapted to a rapidly changing business environment, he said.

"We've been investing 18 percent to 20 percent of our revenues in research and development for about 15 years," he said. "It's a constant around here that we invest more money in R&D than almost any other company in our industry.

"While we felt that organic growth through continued innovation is the best kind, we made a commitment to 'bolt-on' acquisitions that allowed us to cover more businesses. We started a diversity initiative because we knew our work force had to change as the world changed, and without those unique perspectives we would not be where we are now."

Jones said Rockwell Collins leadership began looking at international business expansion six years ago, before it became in vogue to move beyond the nation's borders in search of opportunities in the defense industry.

"This was well before the defense downturn," Jones said. "We knew that the world was changing, and we recognized that we had to better position ourselves outside the United States."

Legacy

When asked to evaluate his legacy, the Nashville, Tenn., native cited two aspects of his 12-year tenure as president and CEO when Rockwell Collins grew from $3.1 billion to $4.7 billion in annual sales.

"The thing that got me here in the first place was the people running the corporation at that time felt I had something to contribute to making this company more customer focused," Jones said. "I think for all the technical excellence that this company has exhibited for 80 years, there may have been a deficit of focus around the customer in the early 1990s.

• Timeline: Rockwell Collins CEO Clay Jones

"Today, I feel we are a far more customer-focused company. By customers, I include the people who pay the money for our products, our shareholders, our community and our employees.

"I also hope that people feel I left the company in better shape than I found it. That's more than any employee can say about anything they've done in their life's work."

Jones, who will continue as non-executive chairman of Rockwell Collins, said he will not accept an offer to come out of retirement.

"If I wanted to continue running a company, I would stay right here," Jones said. "I have no aspiration to run a company beyond Rockwell Collins. I honestly can't imagine that being an option."

Jones said he has two-thirds of his life "figured out" going forward.

"The first and most important third involves spending more time with my family," he said. "My daughters live on the East Coast and I have granddaughters in Florida. I have not been able to spend as much time while I was working as I will now.

"The second third will include continuing to be involved on the Rockwell Collins board of directors and two outside boards - John Deere and Cardinal Health. My work on the Cardinal Health board kind of gets me into the whole national health care public policy debate, which I thrive on."

Jones said the remaining third has yet to be determined, but it will probably involve pursuing his interests. As a former fighter pilot, he finally will have time to get back in the cockpit.

"Over the last year, I've very strongly considered getting current with my pilot's license and possibly purchasing a plane," Jones said. "Aviation has always been a great passion of mine. I've been out of it long enough to know enough about it that I wouldn't go back into it half-heartedly.

"I would have to go into it with some degree of seriousness because it's a serious business. I could definitely see that as a possibility."