Steven Loranger on Breaking Up ITT
When I became CEO of ITT (ITT) in 2004, the company was a $5 billion conglomerate. It operated like a holding company with about 60 independent business units in categories from water treatment to defense systems. My first goal was to institutionalize shared processes like leadership development and strategic planning.
Then about a year ago we realized our defense business was going to face a relatively flat market because of budget cuts and a slowly growing global economy. I didn't want to let that drag down our other businesses. We examined mergers, divestitures, and splitting up the company. A split made the most sense. The case for having a separate defense business was obvious. After that, we decided to keep ITT as an industrial products business and spin off the water business. All three companies had strong CEO candidates from within ITT. My fate was unclear. I had to have a degree of personal impartiality. My job is to be a steward of shareholder assets. I saw this as a strong succession opportunity at these companies and a chance to install the next ten-year team.
Once we settled on a split, we looked at my role. Despite my aerospace background, I felt best suited to chair the water company. I have a master's degree in geomorphology, and the business fascinates me. It's also a global game, and I have a track record there.
My concern right now is speed. This split is time-consuming, and we need to power through it quickly. We've committed to have it done by the end of the year. I like to hear multiple points of view, but there are times when the need to make a decision on schedule outweighs having all the facts and everyone on board. We just need to get it done.
All of this was extraordinarily challenging. I was emotional. As a CEO, you want to build; I've been a builder my whole life. My goal now is to help lead a successful creation of three new public companies. Following that, I'll be fully consumed as the chairman of the water business. My appetite for achievement isn't going to end.