25
JANUARY 2015
ACT
INTERVIEW
T
erex Chairman/
CE
ORon
DeF
eo contends that the
cranemarket will be better
in 2015 and ev
en stronger
in 2016
. D.Ann Shiffl
er
reports exclusiv
ely for
ACT
.
who runs thecompany fromamodest
office inWestport,CT.
While IhavemetDeFeobeforeat
industryevents through theyears, this
was the first time Ihadever talkedwith
himoneonone toget his viewson topics
important and interesting to thecrane
industry. I foundhim tobeeasy to talk to
andknowledgeable.He ispassionateabout
constructionequipment and especially
cranes, andhe is extremely interested in
politics andgettinganewHighwayBill
passedand the funding for it increased.
When it comes tohisbusiness
philosophy,DeFeo said it has evolved
through theyears.Hisbusinessphilosophy
isnowwoven into the fabricof theTerex
value system,whichhe said represents
“howwe think.”Henamed the sixvalues as
improvement, respect, courage, integrity,
citizenshipand servant leadership.The
term servant leadershipcaughtmy
attention.
“My job is tohelpanswer thequestion,
Chatting
withDeFeo
‘howcan Ihelpyou?’”heexplained in
defining servant leadership. “It’s about
empowerment.My job is a spanof support
not a spanof control. I’mat thebottomof
thepyramid, not at the top.Our customers
andour teamareat the top.”
He said that the industrymaynot
understandhim. “Theymay thinkofmeas
theguywhomadeall theacquisitions, the
toughasnails financial guy,”he said. “But
if theydon’t understand this, theyhave
missed this aboutme.”
Through servant leadershipand its value
system,DeFeo saidTerex is evolving into
acompany that is stronganda special
place towork.Hecited thecompany’s low
turnover andemployee satisfactionas abig
accomplishment.
IN TERMSOF THE CRANEMARKET,WHY
DO YOU THINK2014DIDNOT TURNOUTAS
WELL ASWASORIGINALLY FORECAST?
Of course,weareall businesspeopleand
weareoptimists at heart. Sometimesour
optimism runs aheadof realism. I think
theendmarkets aren’t reallygrowing.
There is sufficientwork tokeep the
current level of equipmentwell utilized
butnon-residential construction,which
is aprimarydriverof craneuse, remains
at a fairly low level.Non-residential
constructionusually followshousing
improvement andhousing improvement
is still somewhatmuted.Andwith the
lackof government highway funding,
peopleare still cautious.Cautiousness
contributes toconfidenceconcerns, and
youdon’t buy largecapital assetswhen
youhaveconcerns about the future.The
goodnews is that our customers are smart.
Their equipment ishighlyutilized, values
are increasingandeventually theywill
needmoreequipment. So thoseof uswho
havebeen in thebusiness as longasme
recognize that patience is avirtue.
Thealternatedriverof growth is ageand
cranes last a long time.Replacement can
bepostponedbutnot forgotten. It’sour
view thatwewill seeabettermarket in
2015andaneven strongermarket in2016.
But it’sbest for all of us toplan for the
moreconservativecase,which is littleor
nogrowth.
R
unningapubliccompany is a
delicatebalanceof knowing
when tobe shrewdand
knowingwhen to tread lightly. Inhis22
yearswithTerexCorp.,Chairmanand
CEORonDeFeohas learned tobe tough
asnails and tobea servant leader.
“I think Ihaveanattitude that I guess can
becaptured in this expression:Thebest
way toget power is togive it up,”he said.
“If youexpect people todowell youhave
toempower them todowell.Give them
achance.Createanenvironmentwhere
great people candogreat things.Over the
years I’vebeen successful by living that and
I’vebeenunsuccessful bynot living that.”
Oneof the reallygood things about the
crane industry is that theupper echelonof
leadershipgenerallydoesnot operate from
ivory towers. Such is thecase forDeFeo,
Ron DeFeo is chairman and
CEO of Terex Corp., based
inWestport, CT.
