I read a recent interview with David Farr, CEO of Emerson Electric with great interest. Emerson is a Fortune 500 company that was founded in 1890 and has nearly 128,000 employees and $25 billion in revenue today. Given this scale and heritage, it would not seem a likely candidate for any awards involving nimbleness and innovation. After reviewing this article you might think again, as Emerson has done an admirable job of adapting to its competitive environment, leveraging its competencies and continuing on its impressive growth trajectory; in short, effectively employing elements of the Art of Strategy. Some examples:
- Emerson closely monitors its competitive environment and understands when the playing field has evolved in such a waythat they should either double down or exit a business, even if it involves exiting their original business (i.e., electric motors), as David Farr did shortly after becoming CEO.
- Emerson is attune to industry trends and understand the opportunities and challenges associated with such trends and adapts accordingly; one key trend impacting their U.S. operations is the high rate of innovation in manufacturing automation (which is partly a response to high quality competition from other countries and also the drop off in U.S. technical skills).
- Identifying and attacking new market opportunities that leverage Emerson’s core strengths and take advantage of trends; new markets include cooling in data center operations and industrial scale garbage disposers to handle food waste.
Our highest growth middle market clients may not have the resources of an Emerson Electric, but they share an appreciation for the importance of thinking strategically about their business and effectively employing the tools of the Art of Strategy on a regular basis to ensure that they maintain their leadership position.