Avoid Catastrophe Before Chasing Growth

“Busy men never have time to do all of the things that need doing. Many have a tendency to get beguiled by the peripheral aspects of running a business. In Indian Head we have always said that the main priorities of executive attention are these, and in this order: Number i: Avoid catastrophe!!! Number 2: Keep the show on the road. Meet or beat the current plan. Number 3: Plan for future profit improvement. Don't go off chasing rainbows with grandiose growth schemes until you are sure that you have been minding the store, don't start vast proj- ects WITH HALF VAST IDEAS.'”

“The disparity between the forecasts of Textron's earnings and the re- sults actually achieved is a subject which must be of concern to the Direc- tors. The figures for the first quarter of the current year reveal how over-optimistic we were a year ago. The earnings for 1956—again after high hopes—amounted to only $6,502,592. In the years 1949 to 1956 in- clusive, the average earnings per year on the Common Stock were 60 cents. There must be a reason why a Company which engenders so much ex- citement as Textron, and which so confidently proclaims the wonders it is about to perform, so invariably fails to meet expectations. In the opinion of the writer of this memorandum the explanation of this unhappy record is that too much is expected of the Chairman. Granted that he is the creator of the Company and the person to whom”