Good morning. I recently spoke with Rolls-Royce CEO Tufan Erginbilgiç about the art and science of transformation. I caught him on a good day, fresh from reporting a 50% jump in half-year profits to £1.7 billion (about $2.3 billion), that’s helped the U.K. aerospace company’s stock price more than double so far this year.
Erginbilgiç says he’s “changed everything about the company” since becoming CEO in early 2023. He drove 17 initiatives across the organization through four so-called pillars of getting everyone aligned around confronting reality, driving efficiency, setting clear targets and “normalizing intensity” to get things done.
“Underperforming companies stop talking about performing,” he told me. “They stop communicating because it looks ugly. You need to tell them what your vision is to make this a great company … It’s not restructuring I’m after. Transformation is a lot more holistic and ambitious.”
And his response to tariffs, geopolitical challenges and ever-shifting technologies is to focus on making Rolls-Royce more proactive and agile. “You can’t always influence the macro stuff but you influence how you deal with it,” says Erginbilgiç, who created a large task force that reports to him every two weeks.
When trying to align 50,000 people around transformation, his advice is not to obsess over the latest AI or budget target. “Nobody gets excited about budgets,” he says. “Tell people what good looks like.”
Contact CEO Daily via Diane Brady at diane.brady@fortune.com
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CEO Daily is compiled and edited by Joey Abrams and Jim Edwards.
