Talk about coming to a proverbial fork in the road.
When Sandy Cutler left his post as chairman and CEO of Eaton Corp., he didn’t retire from a world-class company as much as he retired into a new career as one of Greater Cleveland’s premier restaurateurs.
For Greater Cleveland Partnership’s (GCP) recent Middle Market CEO Dialogue, Cutler not only was the featured speaker, but also hosted the event at Cru Uncorked in Moreland Hills, a French-American restaurant he opened with his wife, Sarah, and son, Bill.
Naturally, the event was sold out, and actually oversold before ticket sales were cut off. But everyone had more than enough room, and the food and atmosphere were impeccable.
“I think everyone here knows Sandy Cutler as the former chairman and CEO of Eaton because he has a legacy that is pretty hard to duplicate,” said Joe Roman, president and CEO of the GCP, as he opened the proceedings. “We are not here tonight to necessarily talk about that career, as much as we want to talk about how someone goes from running a $20 billion corporation with more than 100,000 employees to becoming an entrepreneurial restaurateur. That just doesn’t happen that often.
“So I thought this would be an opportunity to compare and contrast that one career as an executive, which is unbelievable, to a second career, which is becoming unbelievable and is important for our community.”
This was a special evening for Roman, who was as comfortable with the subject of his interview and the format. And Cutler was open and frank with his answers, launching immediately into the challenges Eaton faced when he took over the company’s reins.
“We were a company that was 90 percent oriented toward the U.S., but most of our big competitors were fairly well balanced around the world and many of our competitors were European,” Cutler said. “We were not a company that was growing very quickly, at about 2 percent per year, but we were really financing that through borrowing. Our income levels as a percent of sales were what I would call substandard. But we had been telling people in our company for 30 years that we were a top-tier company.”
So Eaton began to evaluate its competition, “and when we put all the numbers together, we were a third-tier company,” said Cutler. “So, the question became: How do we convey to our employees, and rather quickly, that we have to go through a dramatic change?’ That it is important not only for us as a company, but also each of us as individuals.”
Among other performance goals, Eaton outlined an aggressive 15 percent compounded earning growth plan, taking a message to Wall Street that basically stated that if its goals weren’t reached, the entire management team should be dismissed. In a few short years, Eaton hit 166 acquisitions and made some difficult divestitures of underperforming assets.
“But I think fundamentally what we worked on was our culture, in terms of what it is like to work at a high performing company,” Cutler said. “And it all starts with ethics.”
Changing the ethics within the organization allowed Eaton to move forward and create a workforce where everyone has the opportunity, given the right resources, to reach their full potential.
Cutler brought that same mantra to the table — as well as his passion for excellence — in the nascent stages of development for his restaurant Cru Uncorked, which is now in its third year.
“The middle market is an amazing growth opportunity for our region,” Roman said after the event. “While many people like to subscribe to the idea that most jobs are created by small business, they are actually created by middle-market companies. We are one of the few chambers that speaks for all-sized businesses.
“A lot of chambers like to focus on one end of the spectrum or the other, but our history of bringing together a CEO group called Cleveland Tomorrow and something like COSE and our Middle Market Forums shows that we are really trying to represent all-sized businesses. And that is our unique strength.”
It is also great when people from businesses of all size can come together to meet and just enjoy each other’s company.