January 27, 2008 – Business Management Article
Chairman and chief executive of Caterpillar Inc, Jim Owens, expects to see record results again in 2008, in what he thinks will be a challenging year. But he hopes to see the world’s biggest maker of earth-moving equipment have all-time record results again fuelled by growth in markets outside the U.S.
Last quarter Caterpillar’s sales rose more than 10 percent inspite of a difficult domestic market. However, a very strong global footprint ensured record sales and profit for the whole year.
Caterpillar’s Turnaround Story
Until 1982, Caterpillar or ‘CAT’ (as most people refer it to) enjoyed a long-standing record of profitability and market leadership. However, with increased competition it was almost out of business. It then turned around its business from near-bankruptcy to profitability in a space of a few years. Jim Owens (now CEO), who started as a mid level manager at Caterpillar believed that it was a spectacular transformation of a kind of sluggish company into one that actually has entrepreneurial zeal. What made Caterpillar different was how it reshaped its DNA in a way that permanently changed the culture and capabilities of the enterprise. Caterpillar focused on its decision rights, organizational structure, motivating factors and metrics and measures – the four essentials of organizational DNA. CAT delivered 12 straight years of profit after that. It nearly tripled both its top and bottom lines since1993. In 2005, Forbes had listed Caterpillar as the best-managed industrial corporation in America. …