{"id":217749,"date":"2024-03-27T21:22:03","date_gmt":"2024-03-27T21:22:03","guid":{"rendered":"https:\/\/michigandigitalnews.com\/index.php\/2024\/03\/27\/otiss-judy-marks-to-future-ceos-its-radically-different-than-any-other-role-youve-had\/"},"modified":"2025-06-25T17:19:48","modified_gmt":"2025-06-25T17:19:48","slug":"otiss-judy-marks-to-future-ceos-its-radically-different-than-any-other-role-youve-had","status":"publish","type":"post","link":"https:\/\/michigandigitalnews.com\/index.php\/2024\/03\/27\/otiss-judy-marks-to-future-ceos-its-radically-different-than-any-other-role-youve-had\/","title":{"rendered":"Otis&#8217;s Judy Marks to future CEOs: it&#8217;s &#8216;radically different than any other role you&#8217;ve had&#8217;"},"content":{"rendered":"<p> [ad_1]<br \/>\n<br \/><img decoding=\"async\" src=\"https:\/\/fortune.com\/img-assets\/wp-content\/uploads\/2024\/03\/Judy-Marks.jpg?w=2048\" \/><\/p>\n<p>On this episode of\u00a0<em>Fortune<\/em>\u2019s\u00a0<a href=\"https:\/\/fortune.com\/topic\/leadership-next\/\" target=\"_self\" rel=\"noopener\" class=\"sc-47dba8f0-0 iRbseu styledLinkColor \"><em>Leadership Next<\/em><\/a>\u00a0podcast, Alan Murray sits down with Judy Marks, CEO of the 107-year-old elevator company, Otis, to discuss taking over the company as it was spun off from United Technologies, running an essential services business through the pandemic, and the company\u2019s mic drop growth since 2020. The interview was conducted in front of an audience at <a href=\"https:\/\/fortune.com\/company\/deloitte\/\" target=\"_blank\" rel=\"noopener\" class=\"sc-47dba8f0-0 iRbseu styledLinkColor \">Deloitte<\/a> University in Westlake, Texas.<\/p>\n<div>\n<p>Co-host Michal Lev-Ram joins Murray for the pre-interview conversation.<\/p>\n<p>Listen to the episode or read the transcript below.<\/p>\n<p><iframe frameborder=\"0\" height=\"200\" loading=\"lazy\" scrolling=\"no\" src=\"https:\/\/playlist.megaphone.fm\/?e=FMC3693648920\" style=\"border:none\" width=\"100%\"><\/iframe><\/p>\n<h2 class=\"wp-block-heading\">Transcript<\/h2>\n<p><strong>Alan Murray:<\/strong>\u00a0<em>Leadership Next<\/em>\u00a0is powered by the folks at\u00a0<a href=\"https:\/\/fortune.com\/company\/deloitte\/\" target=\"_blank\" rel=\"noreferrer noopener\" class=\"sc-47dba8f0-0 iRbseu styledLinkColor \">Deloitte<\/a>\u00a0who, like me, are exploring the changing rules of business leadership and how CEOs are navigating this change.<\/p>\n<p>Welcome to\u00a0<em>Leadership Next<\/em>, the podcast about the changing rules of business leadership. And Michal, I missed you down in Texas.\u00a0\u00a0\u00a0\u00a0<\/p>\n<p><strong>Michal Lev-Ram:<\/strong> I missed you. Any time we have to do an interview alone, I think both of us get FOMO. But tell me about it. How did it go?<\/p>\n<p><strong>Murray:<\/strong>\u00a0Oh, it was great. It was great. This was Deloitte University, and they were holding a session for about 20 people who\u2019d been picked by their companies as potential CEOs of the future. So, it was a live audience, but an audience that was very interested in what our guest had to say.<\/p>\n<p><strong>Lev-Ram:<\/strong> Yeah, Alan, I want to hear all about it. You interviewed Judy Marx and there aren\u2019t many women leading industrials on the Fortune 500. So, tell us about her and what do you think was the most interesting thing she said?<\/p>\n<p><strong>Murray:<\/strong>\u00a0Judy is the CEO of [the] Otis elevator [company], which spun out of United Technologies just four years ago. And she\u2019s done amazing things with the company in the meantime. You know, it operates elevators all over the world. She\u2019s converted it more to a service organization. She had to lead through the pandemic, which is a tough time for everybody, particularly in the elevator business, and has had amazing results. So you\u2019re right, it is rare to have a woman leading an industrial company like that. And she talked about that as well.<\/p>\n<p><strong>Lev-Ram:<\/strong> And I understand you also talked about tariffs and impact to consumers, which is a very, unfortunately, a very hot topic right now. Anything on that end you want to highlight?<\/p>\n<p><strong>Murray:<\/strong>\u00a0I think I\u2019ll just leave it to her to tell the story.<\/p>\n<p><strong>Lev-Ram: <\/strong>OK.<\/p>\n<p><strong>Murray: <\/strong>But I\u2019ll tell you one other thing, Michal. It\u2019s really fun to do these interviews for a live audience, particularly for a live audience that\u2019s tuned in and plugged in the way the group down in Texas was.<\/p>\n<p><strong>Lev-Ram: <\/strong>Well, I\u2019m sorry I missed it, but let\u2019s go ahead and dive in because it sounds like a great talk. So here is your interview with Judy Marx.<\/p>\n<p><strong>Murray:<\/strong>\u00a0Welcome to <em>Leadership Next<\/em>, the podcast about the changing rules of business leadership. I\u2019m Alan Murray, and today I\u2019m in sunny Westlake, Texas, with a live audience. We don\u2019t very often have a live aud\u2026 [Applause.] Whooh! Yeah! And before I introduce our guests, let me tell you a little bit about the audience. We have, I think, 18 people here who have been selected by their companies as potential future CEOs. So, they\u2019ve come down here to Deloitte University in Westlake, Texas, to learn about what it\u2019s like to take on the top job. And that\u2019s what we\u2019re going to talk about a little bit. And then with them is a group of Deloitte partners. So, it\u2019s a great audience. I appreciate you all being here and taking the time to listen and it\u2019s going to be a great conversation because our guest is Judy Marx, the CEO of Otis Elevator. Judy, thank you so much for taking the time to do this.<\/p>\n<p><strong>Judy Marks: <\/strong>Glad to be here, Alan.<\/p>\n<p><strong>Murray:<\/strong>\u00a0So, we met right before Otis [e]levator spun out of United Technologies with you as the CEO. I suppose we met in late 2019. The spin out happened in April of 2020.<\/p>\n<p><strong>Marks: <\/strong>April 3rd. Remember that date?<\/p>\n<p><strong>Murray:<\/strong>\u00a0So right in the middle of the pandemic, what was it like to be suddenly CEO of a Fortune 500 company in the middle of a pandemic?<\/p>\n<p><strong>Marks: <\/strong>So it\u2019s something that I would never recommend, [audience laughter] but it\u2019s something that I think is really where you get tested as a leader. And for those of you here in the audience, the CEO role is radically different than any other role you\u2019ve had. I was an operator engineer by background, grew up running divisions, running parts of companies. But to prepare yourself to, first of all, unwind from a company that had acquired us in 1976, to do this three ways because we did it, there was it was a three-way spin\u2026<\/p>\n<p><strong>Murray:<\/strong>\u00a0Carrier.<\/p>\n<p><strong>Marks: <\/strong>Carrier. And then United Technologies merged with <a href=\"https:\/\/fortune.com\/company\/raytheon\/\" target=\"_blank\" rel=\"noopener\" class=\"sc-47dba8f0-0 iRbseu styledLinkColor \">Raytheon<\/a>. So, it was a very complex spin to set up these three companies. Obviously in a tax-free scenario with everything that goes with that to the benefit of the shareholders to prove a thesis, which is focus counts, go back to your core and let your shareholders figure out really where they want to invest versus having conglomerates do the capital allocation for them. But as we kind of approached April 3rd, I remember seeing you, it was Super Bowl Sunday in February, early February of \u201920 and\u2026<\/p>\n<p><strong>Murray:<\/strong>\u00a0We were in Puerto Rico. You\u2019re not saying that we were.<\/p>\n<p>[Audience laughs.]<\/p>\n<p><strong>Marks: <\/strong>We were in Puerto Rico at the last board meeting of the former parent, where it was a farewell and a get ready because it was 16 months after the decision. Everything was go. I came back, the next week was our first investor day at the New York Stock Exchange. An exciting time, except my head of China couldn\u2019t join us because it\u2019s already February of \u201820 and there was no travel at that point.<\/p>\n<p><strong>Murray:<\/strong>\u00a0Well.<\/p>\n<p><strong>Marks: <\/strong>Then we went into an equity roadshow where everyone had warned me, You\u2019re going to get exhausted because you\u2019re going to be traveling all over. And guess what? We went virtual for two weeks. And during those two weeks, the state of Connecticut, New Jersey, and New York shut down, right in the middle of that. And we were all, then couldn\u2019t even go into the office to do our second week of the equity roadshow. And then the most exciting part was on April 3rd, we everything was a go. There was no way to turn back. We had the debt. I mean, everything was ready to go. We all wanted to go. And I vividly remember at midnight getting on a FaceTime live with, at the time what was 15,000 of our colleagues in China and basically starting the company and welcoming the company. Didn\u2019t get to ring a bell. The stock exchange was closed, but we started there. And they had an app and they\u2019re all standing there no matter where they are throughout the week. Think of China, right? And they\u2019re all waving their phones because they had downloaded an app to ring a bell for us. [Audience laughs.] And so that\u2019s how it started.<\/p>\n<p><strong>Murray: <\/strong>Wow.<\/p>\n<p><strong>Marks: <\/strong>And I was doing this from home, as many of us were. And it was our board, first day for the board to be in effect. We had met a few times before. We had formed a new board, but everything was being done real time in an essential service. Remember, if we couldn\u2019t service elevators and hospitals and on transit, people weren\u2019t going to survive.<\/p>\n<p><strong>Murray:<\/strong>\u00a0Well, and as I remember, it wasn\u2019t just an essential service. It was, there was an enormous amount of conversation about what can you do to make sure somebody gets on one of your elevators, they don\u2019t get COVID while they\u2019re on it. You know, are there ultraviolet lights? I mean, you had to be spending a lot of time talking with health officials about how to make elevators safe.<\/p>\n<p><strong>Marks: <\/strong>It was elevator safe. We manage and we actually service 2.3 million elevators now, it was a little less, it was just a 2 million then. And more than half of those are for, if any of you live in apartments or condos, people were depending on us to get their food every day. So it really we became a true essential service for the world. And we\u2019re watching this move around. Luckily, we experienced it in China first. So like any good industrial, we said, okay, what lessons can we learn and how do we quickly transition that to the Americas, to EMEA [Europe, the Middle East, and Africa] and eventually to Asia?<\/p>\n<p>And we went through this cycle for a couple of years, Alan. We all did. Again, trying to instantiate a culture, drive a new strategy, be part of a new board of directors, and at the time we were high 60,000 colleagues, keep everybody healthy and safe. Because that\u2019s one of our absolutes of safety, not just for the riding public but for our own colleagues. And so it was I think it was the ultimate lesson in resilience, in tenacity, and I can tell you now as a now that I\u2019ve been a CEO long enough, there was no one to ask. You couldn\u2019t go to a retired CEO and say, Well how did\u2026<\/p>\n<p><strong>Murray:<\/strong>\u00a0Well, how did you get through the lesson? How did you get.<\/p>\n<p><strong>Marks: <\/strong>\u2026through the last pandemic? So, there was actually this very unique community and almost an equalizer amongst CEOs where we would all jump on, you pick it, WebEx, Teams, <a href=\"https:\/\/fortune.com\/company\/zoom\/\" target=\"_blank\" rel=\"noopener\" class=\"sc-47dba8f0-0 iRbseu styledLinkColor \">Zoom<\/a>, whatever anybody had, and they\u2019d say, What are you doing? What are you doing? And it was a great equalizer because even though I was relatively new, even the experienced leaders hadn\u2019t been through it.<\/p>\n<p><strong>Murray:<\/strong>\u00a0No one knew. Yeah. Now everyone was new.<\/p>\n<p><strong>Marks: <\/strong>Everyone was new.<\/p>\n<p><strong>Murray:<\/strong>\u00a0So I want to go back to sort of the fundamental point of the spin. I mean, you were president of Otis elevator before the spin. You became CEO of a public company after the spin. Was it different?<\/p>\n<p><strong>Marks: <\/strong>Oh, yeah. And it\u2019s wonderful, in case you have any doubt.<\/p>\n<p><strong>Murray:<\/strong>\u00a0Well so explain why.<\/p>\n<p><strong>Marks: <\/strong>Yeah. So the premise is when you get to make investment decisions, when you get to figure out how to motivate a workforce, when you get to serve customers and be focused on what you do every day, it can make a difference. As part of a larger conglomerate, we weren\u2019t making those decisions and there was a time, as we look back from 2010 through 2018, that Otis was generating really good profit for the parent and really great cash. We were a wonderfully brilliant cash generation business, and we still are at over 100% in net income, but you could get profit in cash and not grow. And so we had eight straight years of no earnings growth as an elevator company.<\/p>\n<p><strong>Murray:<\/strong>\u00a0You were the proverbial cash cow.<\/p>\n<p><strong>Marks: <\/strong>We were. We were. And everyone we knew that. And the parent company had set up an incentive plan that rewarded that. And so we were in a little bit of harvest mode. I joined in late \u201917. We took a step back. At the time, the spin had not been approved by the board, but there was enough talk, activists were involved and I took the risk. And actually more importantly, Greg Hayes and the UTC board took the risk on me. And we you know, we just said we used \u201818 was the eighth year we had no earnings growth and we said we have to make a fundamental change.<\/p>\n<p><strong>Murray:<\/strong>\u00a0Okay, so now I want to engineer a little drop the mic moment here. Eight years, no growth. What\u2019s happened since April 2020?<\/p>\n<p><strong>Marks: <\/strong>Well, I\u2019ll take you back. So we said 2019 is our proof year. We knew we were going to spin in April of \u201820 and we saw what kind of valuation multiple, what would we be worth if we had our ninth year of no earnings growth? It was just going to be unacceptable. So we stood back, we put a strategy in place, we put a transformation program in place for the first time in a really long time. Our company turned 107 years old last year, just so you understand the historic\u2026almost every one of the colleagues had been their whole career had been at Otis. They loved the brand, they love the iconic company, but we had to change. So we did that in \u201819. were up almost 100 million in earnings. We spun in in April of \u201820 and the day we spun our stock open just under about $44 and today we closed at about 96. So we\u2019ve had well over 100%.<\/p>\n<p><strong>Murray:<\/strong>\u00a0Come on, guys. That\u2019s pretty good. Eight years of no growth and doubled the value through a pandemic.<\/p>\n<p><strong>Marks: <\/strong>Yeah. A pandemic. Some supply chain challenges, expensive commodities, a few other, exiting Russia, a few other issues. So we are a truly global company and it\u2019s great to see so many of you that are global. Of our now 71,000 colleagues, only 10,000 are here in the U.S. We\u2019re headquartered here. We\u2019re a U.S. multinational, but we wake up and breathe every day in every country and every city really, except sanctioned countries. We are a local distributed business where we serve people locally and where we have to empower people through our 1,400 branches to do that. So that was when, you think about transformation and change. It wasn\u2019t about change at corporate. It wasn\u2019t about change at a sales head. It was about change. In every branch, we had focus on serving the customer and converting to our our strength, which was our service business.<\/p>\n<p><strong>Murray:<\/strong>\u00a0Yeah, So talk about that conversion because that was really key to what you did. You became much less of an equipment business, much more of a service business.<\/p>\n<p><strong>Marks: <\/strong>Yeah, well we still, we\u2019re still growing, so for those of you that are in any businesses that are kind of raise your and raise your model, the good news is we make money on both. So we don\u2019t we don\u2019t sell the equipment at a loss. We average six, six and a half percent on the new equipment, but then we average last year 24% on our service business. And our service business is 60% of our revenue and 90% of our profits. It\u2019s regulated, lots of different regulations, which creates a unique moat because every almost every city has their own safety codes, let alone every country. So, scale matters, density matters, and we\u2019re the largest and honestly, the only U.S. multinational left doing this. We compete with Europeans and Japanese and Chinese. So it really is about understanding, and I\u2019m sure you\u2019re hearing this here, vision, mission strategy, but strategy, strategy, strategy and making sure at any corner in the world everyone understands what you\u2019re doing, why you\u2019re doing it, that it\u2019s customer focused, and that they\u2019re empowered to do it.<\/p>\n<p><strong>Murray:<\/strong>\u00a0But couldn\u2019t you have executed that services-focused business as a subsidiary of United Technologies.<\/p>\n<p><strong>Marks: <\/strong>Well, I think the change happened for two reasons. One is when you control your investments, you make those decisions. And when I joined Otis and looked at our R&amp;D profile, not surprising, it was really focused on the equipment. And there\u2019s good rationale for that. The China urbanization market had been booming from 2000 till about 2015, so it made perfect sense that you would invest and we\u2019re an innovation company. But what I tried to do is say, well, where\u2019s the innovation and service? And in fairness to the parent, I mean, IoT was nascent at that time. And so now you have the Internet of Things happening at the same time, so now we can actually get data through the cloud, understand exactly what\u2019s happening real time on our elevator, so we can do proactive preventive maintenance where code allows, which is very few places we can do a remote. So it was a combination of technology happening at the right time and us making the right investment decisions and controlling our destiny.<\/p>\n<p><strong>Murray:<\/strong>\u00a0Sustainability was also a part of that?<\/p>\n<p><strong>Marks: <\/strong>Absolutely. So, whether it I mean, remember, we\u2019re in buildings and we\u2019re in a lot of buildings. And I like to say it\u2019s funny because everyone\u2019s like, well, jeez, you know what, you\u2019re trying to win back other elevators. I say, Yeah, none of them have moved. We know where they are, right? It\u2019s a wonderful thing. So we can target, but what we did is we really listened to our customers, whether it was our customer advisory board and whether it was just the feedback we were getting on social media. As Alan knows, I\u2019m out there and if any customer writes, if they post to me or send a <a href=\"https:\/\/fortune.com\/company\/linkedin\/\" target=\"_blank\" rel=\"noopener\" class=\"sc-47dba8f0-0 iRbseu styledLinkColor \">LinkedIn<\/a> message or they\u2019re just frustrated, guess what? It gets handled. But we would also gather requirements that way. And what we\u2019re hearing is people care. I mean, buildings generate a tremendous amount of greenhouse gas emissions. And matter of fact, if you look at Otis, when we got there and we looked at our scope one and scope two and now we\u2019ve submitted for scope three for SBT II. But when we looked at our scope one and scope two, you\u2019d say, Hey Judy, you\u2019ve got 17 factories around the world, that\u2019s where it is. And I\u2019m like, That\u2019s the smallest part of our emissions. The two bigger parts are our 22,000 vehicle fleet for our mechanics, and the biggest part is our building footprint, 1,400 branches, all these warehouses, depots. So customers came to us and said, How can you help us? How can you make us more energy efficient? So we actually have a regenerative drive for those of you that are technical, that allows us actually to be a distributed generation in the building. It\u2019s when the counterweight comes, we\u2019re actually pushing energy back into the grid in the building. We have technology, and you\u2019ve probably seen this where where you select the floor before you ever get to the elevator because we group you, so the elevator can accelerate and not use as much energy. You actually get there faster. The building actually needs about 50% less elevators, and guess what? When they don\u2019t need those hoistways, they can rent or sell that space. So to me, sustainability, it\u2019s, first of all, our people are demanding it, our customers are demanding it. It\u2019s just good for business. We\u2019ve always been in the business of moving people. Now we\u2019re moving people with rising incomes, now we\u2019re moving people who are aging. So we have an incredible organic market ahead of us. And every now and then, elevators age, too. So not only are people aging, elevators are. And there\u2019s a great technology refresh coming we call modernization.<\/p>\n<p><strong>Murray:<\/strong>\u00a0And all of that, the new technology sustainability, all of that feeds your service model which is driving your profits.<\/p>\n<p><strong>Marks: <\/strong>Absolutely. Service-driven business model. And we tell our investors, if there\u2019s one thing to look at, you know, beyond EPS and everything else you\u2019re evaluating us on, look at our service portfolio. We have the largest one in the world and we say we\u2019re going to grow at 4+% in our medium term guide. And as that grows, it\u2019s just the flywheel that continues until about 15 or 20 years later when we modernize it and we start it all over again.<\/p>\n<p>[Music starts.]<\/p>\n<p><strong>Murray:<\/strong>\u00a0I\u2019m here with Jason Girzadas, the CEO of Deloitte US, who had the good sense to sponsor this podcast. Jason, thank you very much for joining me.<\/p>\n<p><strong>Jason Girzadas: <\/strong>Thank you, Alan. It\u2019s a pleasure to be here.<\/p>\n<p><strong>Murray:<\/strong>\u00a0Jason, the majority of Fortune 500 companies have made commitments to reach net zero to address climate, but it\u2019s still unclear how they actually get there. What\u2019s the role of technology in meeting those ambitious goals?<\/p>\n<p><strong>Girzadas: <\/strong>There\u2019s a broad recognition that the cost of climate change is far greater than the cost of not investing in it. Organizations will continue to utilize technology to move on the journey towards a decarbonized future and a more circular economy. We\u2019re already seeing the benefit of technology through an increase in alternative energy sources. The advances in battery and storage technology are evident. You\u2019re seeing the growth and increased performance of EVs at lower price points. So the impact and value of technology is being felt already, and that\u2019s only going to continue. It\u2019s pretty clear that climate change requires innovations that don\u2019t exist today, but we do think that there will be new opportunities for innovation to be further accelerated through the development of ecosystems around emerging technologies.<\/p>\n<p><strong>Murray:<\/strong>\u00a0There\u2019s clearly a lot to do on this front. You talk to a lot of CEOs about this. Do you feel there\u2019s a real sense of urgency on meeting these commitments?<\/p>\n<p><strong>Girzadas: <\/strong>The urgency is there. The call to action around climate change and the path to sustainability is there, and the impact of climate change is real. I think the narrative is shifting: one from it being a cost and an inconvenience to decarbonize our economy, to one where it\u2019s actually a opportunity. The climate organizations that we serve are in their own way, charting a path to a sustainable future.<\/p>\n<p><strong>Murray:<\/strong>\u00a0Jason, thanks for your perspective and thanks for sponsoring <em>Leadership Next.<\/em><\/p>\n<p><strong>Girzadas: <\/strong>Thank you.<\/p>\n<p>[Music ends.]<\/p>\n<p><strong>Murray:<\/strong>\u00a0I want to talk about geopolitics because you are everywhere. You have\u2026<\/p>\n<p><strong>Marks: <\/strong>Personally, too.<\/p>\n<p><strong>Murray:<\/strong>\u00a0Personally, I\u2019m sure\u202620% of the global market?<\/p>\n<p><strong>Marks: <\/strong>About 20%.<\/p>\n<p><strong>Murray: <\/strong>About 20%. I remember when we talked in 2020 your, at that time, China was everything because that\u2019s where the buildings were being built. New buildings were being built in China. You were making your money off of new elevators and China was a huge part of your business. After the Russian invasion of Ukraine, every company that I know of started to do a rethink and said, Hey, wait a minute, where is this relationship with China going? What\u2019s happening in the Taiwan Straits? What does that mean about our business? How did you at Otis think about that?<\/p>\n<p><strong>Marks: <\/strong>Yeah, well, we think about it in a few ways and you\u2019ll hear many CEOs, myself included, say, control what you can control, right? There\u2019s two things we say we don\u2019t control typically, macroeconomics and geopolitics. And that\u2019s always a really good answer if you\u2019re asked, because it actually happens to be true. But it doesn\u2019t mean you can\u2019t plan for it. It doesn\u2019t mean you shouldn\u2019t do scenario planning. It doesn\u2019t mean you shouldn\u2019t prepare your supply chain to say, I shouldn\u2019t uniquely manufacture one thing in only one place or source one thing in only one place. We\u2019ve learned all that right \u2013 just in time became just in case. So you really do have to plan. We had a very healthy business in Russia and we had a healthy business in Ukraine because we\u2019re everywhere except sanctioned countries. And we made the decision in accordance with our values and our absolutes, to make sure that the over 2,000 colleagues had a new owner so that they would have their livelihoods. They had been with us for 30 years. We had a manufacturing plant in Saint Petersburg and we within a period of, once we decided of three months, we sold that business and exited and we were top share in Russia. But it was just the right thing to do. So you\u2019re always balancing that. When it comes to China. You know, everyone says reshore. Everyone, you know, you hear China plus one. I\u2019m here to tell you, first of all, we can\u2019t reshore what we do. We manufacture local for local. In India, we manufacture for India. In China, we basically manufacture for China. But all that\u2019s interesting except go back to the very beginning. We are a service-driven business, which means there are eight to nine million elevators in use in China. We service about just under 400,000 of them with a 4% market share. It\u2019s a high-growth business. We have 17,000 colleagues. We are going to do business in China, follow the rules of China, be it data privacy, a dedicated data center, whatever it takes, and support our team there for as long as we can. And that\u2019s our intent. Is everyone de-risking? Everyone\u2019s de-risking, but you\u2019re de-risking all your supply chains. It\u2019s not just because of geopolitics.<\/p>\n<p><strong>Murray:<\/strong>\u00a0So it hasn\u2019t changed. It hasn\u2019t changed your approach.<\/p>\n<p><strong>Marks: <\/strong>Not at all.<\/p>\n<p><strong>Murray:<\/strong>\u00a0The market has slowed down a lot.<\/p>\n<p><strong>Marks: <\/strong>The new equipment market slowed down, service has picked up. So when you see that, before you see that happening, you want, you want a balanced portfolio. And we have a beautiful, balanced portfolio. We don\u2019t have a single customer who\u2019s more than 1% of our revenue. But we want a balanced portfolio. So we saw China emerging to be more becoming more of a mature market than emerging like Southeast Asia and India, which would be more emerging because right now they\u2019re going through major urbanization. So we said let\u2019s pivot more towards service. And so when we spun, we were about 85% equipment in China, 15% service. Last year, we ended at 75\/25, and we\u2019re going to continue down that path.<\/p>\n<p><strong>Murray:<\/strong>\u00a0Yeah, Judy, as you know very well, frankly, there are just not that many women running Fortune 500 companies. It\u2019s only at about 10% and it\u2019s far lower when you talk about industrial companies, you know making elevators, heavy equipment, how do\u2026<\/p>\n<p><strong>Marks: <\/strong>Are you supposed to grunt or something? What are you supposed to do there?<strong\/><\/p>\n<p><strong>Murray:<\/strong>\u00a0How did you get there? How did you do it? How did you end up running a big industrial company?<\/p>\n<p><strong>Marks: <\/strong>Listen, I have, this will be my 40th year in industry and I graduated as an electrical engineer. And I\u2019ve pretty much always been in industrials and not by I mean, I joined an aerospace and defense kind of business when I got out of school. At the time, it was run by <a href=\"https:\/\/fortune.com\/company\/ibm\/\" target=\"_blank\" rel=\"noopener\" class=\"sc-47dba8f0-0 iRbseu styledLinkColor \">IBM<\/a>, ironically, and then they sold it twice and it ended up at <a href=\"https:\/\/fortune.com\/company\/lockheed-martin\/\" target=\"_blank\" rel=\"noopener\" class=\"sc-47dba8f0-0 iRbseu styledLinkColor \">Lockheed Martin<\/a>, and it was the mission that excited me. It was the pace of the technology. Remember, this is the eighties. So think about pace of technology. But it was that pace of technology and the mission of supporting the U.S. government, its allies, and that was important to me.<\/p>\n<p>You know, as you move through your career and up in different ways, you want to, at least in my case, I wanted to see if my leadership skills could transition. So I spent my first 27 years basically with the same company and said, jeez, you know, if I really\u2026<\/p>\n<p><strong>Murray: <\/strong>With IBM?<\/p>\n<p><strong>Marks: <\/strong>Well, it was Lockheed Martin at the time, but the first ten were IBM, then they acquired us. And so, you know, you do say if you want that shot, what other skills do you need? And, you know, it was one of those situations where after that many years, you kind of knew everybody, right? You get in the back, backchannel whispers, you got your network out there. You know everybody. You understand how the business runs. And so I wanted to be part of something truly global. And Lockheed is a global company, but it\u2019s for our allies and it\u2019s, it\u2019s a little more, more limited. And I wanted the opportunity to see if my leadership skills could transition to a different industry, different customer set, where I knew no one. I mean, to me it was the ultimate test. And so I left there. I went to <a href=\"https:\/\/fortune.com\/company\/siemens\/\" target=\"_blank\" rel=\"noopener\" class=\"sc-47dba8f0-0 iRbseu styledLinkColor \">Siemens<\/a>, 400,000 or so people, great innovative company.<\/p>\n<p><strong>Murray:<\/strong>\u00a0And you were the U.S. CEO\u2026<\/p>\n<p><strong>Marks: <\/strong>I eventually became the CEO of the U.S. and ran one of the oil and gas businesses we had acquired. And then the call came for Otis and at that stage in my career it was, I really wanted to be a public company CEO. I didn\u2019t early on. I mean, I don\u2019t think you wake up one day, but but as you move through.<\/p>\n<p><strong>Murray:<\/strong>\u00a0Yeah, when did that\u2026when did\u2026I mean because in those early years you probably spent a lot of time in rooms where you were the only woman in the room?<\/p>\n<p><strong>Marks: <\/strong>Yeah, a lot of those.<\/p>\n<p><strong>Murray:<\/strong>\u00a0And when did it first occur to you? You know, I could do this and I could do it well.<\/p>\n<p><strong>Marks: <\/strong>Yeah, I think. I think early in your career, at least, I\u2019ll talk to the eighties and nineties. I mean, I was in some great, great corporations for development and you just trusted the people around you. And they said, \u201cHey, we think you can do this next assignment.\u201d Even if you didn\u2019t think you could, you said, \u201cWell, if you think I can, okay, I\u2019m competitive, I\u2019ll try, I\u2019ll learn.\u201d And so that just continued. You took on more responsibility and then all of a sudden, you know, you look around when you\u2019re in the kind of the top 50 of your company and you\u2019re looking around and you\u2019re like, \u201cMaybe I can do this.\u201d<\/p>\n<p><strong>Murray: <\/strong>\u201cI can do this\u201d.<\/p>\n<p><strong>Marks: <\/strong>It was more than maybe I think I can do this. And then the challenge is finding the opportunity to do this. And so for me, that meant leaving, giving up a defined pension benefit three years earlier, you know. But it was one of those questions I didn\u2019t want to look back on at retirement and say, could I have done this? And so, you know, through a great series of opportunities and being surrounded by phenomenal talent, you\u2019ve got to pick the best talent, and if they\u2019re not, you\u2019ve got to change them. And right now, I\u2019m really proud to say, you know, I\u2019ve got four presidents who work for me. Two of them are women. We have a board. Five out of the 11 are women. And it\u2019s intentional.<\/p>\n<p><strong>Murray:<\/strong>\u00a0Good for you.<\/p>\n<p><strong>Marks: <\/strong>It\u2019s intentional, it has to be.<\/p>\n<p><strong>Murray:<\/strong>\u00a0Right. Just to keep the story going a little longer. When you went to United Technologies to be president of Otis, did you know there was going to be a spin? Was that what why you went? Was it the opportunity to run a public company?<\/p>\n<p><strong>Marks: <\/strong>There was the hope, but never the guarantee there would be a spin and never the guarantee that I would be the selected CEO. And so it kind of felt like the rest of your career, right? It was like, do you want to take this risk?<\/p>\n<p><strong>Murray:<\/strong>\u00a0Do you do you think you lead differently than the men who you worked for in your career?<\/p>\n<p><strong>Marks: <\/strong>I do.<\/p>\n<p><strong>Murray:<\/strong>\u00a0And what distinguishes?<\/p>\n<p><strong>Marks: <\/strong>Well, there\u2019s certain things that are common, extremely competitive, high learning ability. Hopefully a good EQ. But I would tell you, I think it\u2019s how you motivate a team, how you collaborate and how you get the best out of a team because it\u2019s not about you. It doesn\u2019t matter where I work. Beautiful facilities, great labs, great technology. You know, everyone\u2019s got that. It\u2019s how do you serve customers and how do you motivate a team? And if you can put that together, the financials will work, everything will work, and you know you\u2019re going to be successful.<\/p>\n<p><strong>Murray:<\/strong>\u00a0You\u2019ve been through this crazy four years, you know, pandemic, geopolitics, changing the business, the strategy, and the business model. We had a conversation earlier with this group about how lonely the CEO job can be. That particularly if you\u2019re coming up through a corporation, all the people who were your buddies and your peers are suddenly working for you and they talk to you differently. You don\u2019t get the same candid feedback from them. Who do you rely on for advice? Who did you lean on during that incredibly tumultuous period still going on?<\/p>\n<p><strong>Marks: <\/strong>Yeah. Yeah. So, I mean, it\u2019s interesting because I came in as the first outsider to ever run Otis. So it wasn\u2019t even just first outsider and oh, by the way, quite a few of the people who were coming to work for me interviewed for the role internally. So you had that dynamic, too. But listen, what you learn is you need a few things. You need a group of very trusted people who are going to tell you truth because things get filtered and they really do. So you need to call one of them a loyal irritant as long as it doesn\u2019t really bother them. You need someone who\u2019s going to kick you under the table every now and then and say, \u201cOkay, enough, Jude.\u201d Right? They got your point. Okay, it\u2019s enough. Let go. You need someone who\u2019s going to say, I think be really good if this got on your calendar because you can\u2019t be everywhere. So you need that group and everyone, listen, I do believe people are well-meaning, but I also believe, at least in our case, because most of the leaders had come from inside the company and had never been officers in a public company, this was a stretch for them. The expectations were different. They were never developed to do this like you guys are going through. They just didn\u2019t know what was supposed to what was expected of them. And then all of a sudden at this stage in their lives, for those expectations to change and jump so high, they didn\u2019t all make it. And the most important thing you can do then is continue to develop new talent.<\/p>\n<p><strong>Murray:<\/strong>\u00a0Judy, you recently became the chair of the Business Roundtable\u2019s trade committee. The Business Roundtable is, of course, the organization that interfaces with government and politicians on behalf of large companies. That strikes me as a pretty thankless task. You\u2019ve got two candidates in this election, both of whom are eager to impose more tariffs. Donald Trump was on TV this morning saying he loves tariffs, 60% on cars.<\/p>\n<p><strong>Marks: <\/strong>Chinese cars.<\/p>\n<p><strong>Murray:<\/strong>\u00a0Chinese cars is whatI think he said this morning.<\/p>\n<p><strong>Murray:<\/strong>\u00a0Why did you take that on and what do you hope to do? Is anybody listening to the business community on this issue?<\/p>\n<p><strong>Marks: <\/strong>Yeah, listen, I think our voice needs to be heard. Whether it resounds and people are listening or not is almost a second order derivative. Our voice needs to be heard because as leaders of U.S. multinationals, we believe in jobs, we believe in growth of the economy, and we believe that growth includes the ability to have market access throughout the globe. It\u2019s just that simple. Because what that does is it creates more jobs here in the United States. It creates more opportunities. The tariffs that we experienced over the past four years, five years that started in President Trump\u2019s administration and continued in the Biden administration, for any of you that are involved here in the U.S., basically became, our ability was to flow them through on price. You couldn\u2019t do it immediately. If you had backlog, you had to digest that. You had to basically eat it from a financial perspective. But then you you figured out that this was going to be an ongoing cost, just like lots of other costs, just like wages, everything else. And unfortunately, it was the U.S. consumer who ended up really paying for these tariffs. So, you know, I, I don\u2019t believe isolationism is the way to go because we do business all over the world and we have to be all over the world to do business. Does that drive more R&amp;D here in the United States? It does. Does that drive more IP here? Absolutely. Does it drive more jobs here? Absolutely. Does it create a thriving economy in the U.S.? It does because we have access, and we can compete globally versus not having access to those markets and being able to spread our costs and deal with that and develop, honestly, other markets drive different demands and some of those markets make us better here. So I\u2019m listen,  we\u2019ll see what happens.<\/p>\n<p><strong>Murray:<\/strong>\u00a0Good luck with that, Judy.<\/p>\n<p><strong>Marks: <\/strong>The message needs to get out there because it\u2019s more than a message. It\u2019s more than a story. We\u2019ve proven it now for decades that trade matters.<\/p>\n<p><strong>Murray:<\/strong>\u00a0Last question here. You\u2019ve more than doubled the market cap of the company over this very tumultuous four-year period. What\u2019s next? What\u2019s the next five years look like for Otis? What do you hope to accomplish?<\/p>\n<p><strong>Marks: <\/strong>Yeah, this like I said, this will be year 171 for us. So, talk about an iconic company that created the industry and still leads it. So the next five years we will still lead it and what it looks like, I\u2019m not going to call interest rates. Remember the two things you don\u2019t control, macroeconomics. So are there going to be ups and downs? Sorry about that.<\/p>\n<p><strong>Murray:<\/strong>\u00a0It\u2019s an elevator joke.<\/p>\n<p><strong>Marks: <\/strong>It\u2019s an elevator joke. Are there going to be ups and downs on new buildings? Of course there are. Depends where you are in the globe. You know, the megatrends are going to help us in certain parts of the world. In other parts of the world, we\u2019re going to have headwinds. Our service business is going to carry us through and that alone gets us to nice growth. But what\u2019s coming, which is even more exciting and not a lot of businesses can say this, Alan, is we have this organic opportunity in front of us because of the 20 plus million elevators that are out there, 7 million are over 20 years old and need refurbishment, need technology insertion not just for sustainability but for improved usage, for access, for handicapped. We have that market, that annual market will be bigger than the new equipment market before the end of the decade. And so where else for this iconic company can you find a market right in front of you with organic growth for an industrial? So, I\u2019m excited.<\/p>\n<p><strong>Murray:<\/strong>\u00a0Judy, your elevator enthusiasm is infectious. Let\u2019s please give Judy Marks a round of applause.<\/p>\n<p><strong>Murray:\u00a0<\/strong><em>Leadership Next<\/em>\u00a0is edited by Nicole Vergara.<\/p>\n<p><strong>Michal Lev-Ram:<\/strong>\u00a0Our executive producer is Chris Joslin.<\/p>\n<p><strong>Murray:\u00a0<\/strong>Our theme is by Jason Snell.<\/p>\n<p><strong>Lev-Ram:\u00a0<\/strong><em>Leadership Next<\/em>\u00a0is a production of\u00a0<a href=\"https:\/\/fortune.com\/company\/fortune-media\/\" target=\"_blank\" rel=\"noreferrer noopener\" class=\"sc-47dba8f0-0 iRbseu styledLinkColor \">Fortune Media<\/a>.<\/p>\n<p><strong>Murray:\u00a0<\/strong><em>Leadership Next\u00a0<\/em>episodes are produced by\u00a0<em>Fortune<\/em>\u2019s editorial team. The views and opinions expressed by podcast speakers and guests are solely their own and do not reflect the opinions of Deloitte or its personnel. Nor does Deloitte advocate or endorse any individuals or entities featured on the episodes.<\/p>\n<\/div>\n<p>[ad_2]<br \/>\n<br \/><a href=\"https:\/\/fortune.com\/2024\/03\/27\/otis-judy-marks-ceo-advice-interview\/\">Source link <\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>[ad_1] On this episode of\u00a0Fortune\u2019s\u00a0Leadership Next\u00a0podcast, Alan Murray sits down with Judy Marks, CEO of the 107-year-old elevator company, Otis, to discuss taking over the<\/p>\n","protected":false},"author":1,"featured_media":217750,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"_uf_show_specific_survey":0,"_uf_disable_surveys":false,"footnotes":""},"categories":[149],"tags":[],"_links":{"self":[{"href":"https:\/\/michigandigitalnews.com\/index.php\/wp-json\/wp\/v2\/posts\/217749"}],"collection":[{"href":"https:\/\/michigandigitalnews.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/michigandigitalnews.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/michigandigitalnews.com\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/michigandigitalnews.com\/index.php\/wp-json\/wp\/v2\/comments?post=217749"}],"version-history":[{"count":1,"href":"https:\/\/michigandigitalnews.com\/index.php\/wp-json\/wp\/v2\/posts\/217749\/revisions"}],"predecessor-version":[{"id":333467,"href":"https:\/\/michigandigitalnews.com\/index.php\/wp-json\/wp\/v2\/posts\/217749\/revisions\/333467"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/michigandigitalnews.com\/index.php\/wp-json\/wp\/v2\/media\/217750"}],"wp:attachment":[{"href":"https:\/\/michigandigitalnews.com\/index.php\/wp-json\/wp\/v2\/media?parent=217749"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/michigandigitalnews.com\/index.php\/wp-json\/wp\/v2\/categories?post=217749"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/michigandigitalnews.com\/index.php\/wp-json\/wp\/v2\/tags?post=217749"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}