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The Covid Crisis Taught David Farr the Power and -3-

One of the biggest debates was about requiring masks. The OCE executives went through the questions. Were they helpful? When should they be used? How vigilant should a company be in pushing for compliance?

Missouri didn't require mask use in public, and messages from health and political leaders were conflicting. For months, Mr. Trump refused to wear a mask and declared their use as voluntary.

Mr. Farr had worn a mask twice since the lockdown began. Once was during his home haircut and another was on a trip to a Walgreens pharmacy.

The sixth-floor executives generally weren't wearing masks in the office. Executives didn't need them, they thought, if they just stuck to their regular paths. They decided that employees coming back to work would wear them in open, common areas like the cafeteria and elevators.

"If you're not feeling well, or if you're running a temperature or you're coughing, you need to leave the premises," Mr. Farr said. "We've gone that route, rather than where everyone wears a mask."

Workers came back in groups through May, with the final batch after Memorial Day.

But summer was making Mr. Farr uneasy. A CEO could safeguard offices and factory floors, but that meant nothing if workers weren't safe while off the clock.

The weather was improving and two holidays loomed as giant traps for a population eager to break out after a lonely few months. People were likely going to see family on Mother's Day. Then there was Memorial Day, when everyone celebrated the unofficial start of summer with barbecues, drinking and forgetting about the rules.

Mr. Farr saw his neighbors having parties and knew people weren't behaving themselves. "Those are the things I have to worry about on a daily basis rather than figuring out what competitor I want to kill," he said.

He noticed that when employees saw executives weren't wearing masks, they would remove their own.

Mr. Farr changed his habit, and started donning a mask to walk down the hall to the restroom. "We got really used to having the run of the place, " he said. "If there's more of us around, you got to be doing the right things, you've got to be following your own rules."

Another challenge

Summer brought more trauma after the killing of George Floyd, a Black man, in police custody in Minneapolis. It reignited protests in Ferguson, which was racked with unrest after the 2014 killing of Mr. Brown.

More than 200 employees joined virtually with Mr. Farr and other executives to discuss racial issues in the company and society. Black employees shared their experiences, and Emerson discussed increasing diversity at all employment levels.

Despite the virus's continued spread and social unrest, Mr. Farr was feeling more comfortable with Emerson's financial performance and signs of strengthening orders. "The data's telling me the bottom's going to start forming," he said.

Mr. Farr had enough experience with crises to know that the winners were the ones who were ready to supply products to customers when demand increased. Those pivotal times remade entire industries.

In his experience, he said, market share rarely shifted in Emerson's businesses, so customers won't leave "unless you really, really f -- up."

In the midst of the crisis, Mr. Farr was quietly pursuing an acquisition to bulk up Emerson's Power & Water business. He had been negotiating terms with Open Systems International Inc., a Minneapolis-based developer of software used by utilities to manage power grids.

Emerson had been watching the privately held company for years and thought they were ready to sell under the pressure of the pandemic. Any deal would cost more than $1 billion.

At the same time, Mr. Farr was also exploring a deal for OSIsoft LLC, a SoftBank-backed maker of software to capture data from power plants and other industrial facilities. It was a larger business, and that deal would be much more expensive. Both companies had multiple bidders circling.

At the June board meeting, an Emerson director asked if Mr. Farr could guarantee that his decision to quickly increase investment in businesses with hints of improvement would work.

"No. I can't guarantee s -- ," Mr. Farr replied. "But I'm telling you right now, based on my experience of being around this business for 40 years and being CEO of this company for over 20 years, I can tell you my intuition tells me if I see certain evidence [of improvement], we're going to be pushing it."

'Ask for forgiveness later'

Mr. Farr had just gotten off the phone with KPMG LLC, Emerson's auditors since 1938, and he was steaming. The problem: It was June and they were still working from home.

"Look. I make s -- , and you can't tell me how I'm making s -- when you're sitting in your goddamn living room," Mr. Farr recalled yelling days after the interaction. "Get your a -- out to my factories, look at my people on the line, and tell me if they're telling me the truth or lying. That's what you're supposed to do. That's why I pay you $25 million a year."

Mr. Farr felt remote work was bad in the long-term, so much so that he had advised his son to get back on the road for his job as a field marketing manager for Caterpillar Inc. in Atlanta before the company began bringing people back.

Travel, pay for it yourself, ask for forgiveness later, Mr. Farr barked at his son.

At the same time, he worried about the safety of his daughter, a pastry chef in a Manhattan restaurant. She had refused to leave New York -- an early virus hot spot -- even after Mr. Farr implored her to come home to the less-crowded Midwest.

Before the pandemic, Mr. Farr usually spent about a third of his time traveling. As summer started he planned a trip to an Emerson plant in Pittsburgh in June and a meeting with investors in August. He also scheduled business trips to Germany and possibly Romania.

"I have a large organization and operation there, I'd like to get in there and see what's going on," he said. "And then we'll most likely go into Tokyo and then Seoul."

On June 16, he flew to Pittsburgh on a corporate jet holding only half of its usual limit of 10 people. "It was very energizing to be on the plane," he said.

His mood changed when he saw the airport was empty. He could see more than two dozen parked commercial airplanes. The state's policies were "messed up," he said to no one in particular.

A team of executives were there to meet the CEO at the airport. The group jumped into vans and drove across town. There was no traffic.

The Power & Water leaders took the CEO to a conference room to discuss the operations and financial targets. Mr. Farr couldn't walk the factory floor. The site managers had asked him to stay away in order to avoid safety risks to workers and the visiting executives.

That was fine with the CEO. He was just happy to be out working with his people. He planned to fly to Boulder, Colo., the next week for another business review.

"It's all going back to trying to make people feel like we're back in business, it's back to normal, it's safe, I'm here to talk," he said. "People are getting tired of [video calls] and stuff like that."

There was a summer surge in Covid-19 cases around the country. Still, Emerson wasn't changing anything about its overall operations. It was closely watching the data near its facilities and "communicating the s -- out of everybody," according to Mr. Farr. He sent a letter to employees reminding them "have a good 4th of July, but behave."

Faced with growing infection numbers, Mr. Farr canceled the Europe and Asia trips.

Even though he had concerns about board members coming in from states like Texas and Florida, he decided to stick to plans to hold Emerson's August board meeting in person. Virtual board meetings weren't good for companies, he thought, and the directors needed to be together in person to properly oversee a business.

"You got a company going through a crisis and none of the directors, who represent the shareholders, are here," said Mr. Farr, who is also Emerson's chairman and a member of the board at International Business Machines Corp. They can't read body language or have a free-flowing conversation, he said. "I know boardrooms think they're doing the same as always, but they're not."

'Not satisfying our customers'

Months into the pandemic, Mr. Farr felt people were learning to live safely with the virus, and he wanted them back at work.

By July, the sight of empty parking lots was still a trigger -- even at other companies. The lot at the offices of Express Scripts, a unit of insurer Cigna Corp., set him off. "I can't believe this thing. It's July 7th," he said.

Mr. Farr was so annoyed he groused that he ought to call Cigna's CEO and ask if he had closed the Express Scripts headquarters.

Cigna, in response to a query, said it was following guidance from state and local health officials and was taking a phased approach to reopening.

Daily new cases were rising, but death rates were far from their peak in April. He believed the U.S. strategy to flatten the spread of the virus and not overwhelm medical resources was effective, but was never intended to eliminate the virus. He was frustrated that a local virus task force was warning the public about coming dangers, and blamed the media for alarmist headlines.

He wasn't discounting the crisis, but thought the country was managing.

The July 4 holiday didn't cause a jump in Covid-19 cases at Emerson. The daily meetings for executives to discuss the virus had been reduced to twice a week.

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December 04, 2020 10:31 ET (15:31 GMT)

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