How Paul Jones took three key steps to boost revenue at A.O. Smith Corporation

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Paul Smith, A.O. Smith Corporation
Paul Jones, CEO, A.O. Smith Corporation

Industrial and Distribution
When Paul Jones joined A.O. Smith Corporation in 2004 as COO, the company was operating in a subdued, slow-growing industry and had no primary focus. With his years of experience with companies such as General Electric, Midwest Electric and Greenfield Industries, Jones quickly realized what was needed.
In order to maximize current assets and provide the largest return to the investors, Jones and his team would need to refine the company focus from being just a water heater and electric motors company — the focus would have to be on the area where the company had a comparative advantage and the shareholders would receive a better long-term return.
Jones determined the company needed to do three key things: stop explaining the past and start focusing on achieving in the future, distill the business focus, and prepare the larger water heater business for pending growth issues, which would likely occur once the commercial and residential construction boom receded.
He also took note of the corporate culture — it was a culture set on treating people with dignity and respect. He knew that this would be a great fit, and he has been leading the company by focusing on “keeping our promise” to customers, shareholders and employees.
Upon Jones’ promotion in 2006, Jones said he was announcing his retirement as CEO of A.O. Smith. As the shareholders looked at him in astonishment, he finished by saying “which will be in 2014.” He promised by then the company will have achieved $5 a share in earnings, $100 per share stock price, and have 10 analysts covering the stock.
He was met with skepticism and was told that he would never reach those goals. But in 2012, with split adjusted shares, he met all of those goals. The growth was largely driven by his moves to obtain a strategic position in the replacement market and focus on growing markets such as China.
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