Earnings, Culture and the Lesson of Caterpillar

Posted by: Jessie Scanlon on July 21, 2009

No one was expecting good news to come out of Caterpillar’s earnings report today, but it was better than expected, as I wrote in this piece about the company’s new hybrid tractor, the D7E. The company reported a 66% drop in Q2 sales compared to last year. But here’s the silver lining: CAT beat analyst estimates, raised its 2009 forecast, and saw its shares jump $4.13, or nearly 11.3 percent, to $40.78 in pre-market trading.

Caterpillar has thrived in good times and survived the down cycles in part because it is the #1 brand in most of its categories. And it has remained #1 in part because of its culture of innovation. Which brings me to a comment on the story posted by Bob Hoerr, who worked as an apprentice at Caterpillar’s foundry from 1939 to 1944. He writes: “One of our training manuals had a statement attributed to C.G.A. Rosen, developer of the Cat Diesel engine — “Let your imagination soar — then engineer it back down to earth.”

Caterpillar is navigating an unusually difficult economic cycle, and no doubt many of its employees are spending less time letting their imaginations soar and more time worrying about losing their jobs. I wonder how that innovation spirit will survive. I hope it does.

In any case, Rosen’s mantra is something all of us can learn from. It doesn’t just apply to engineers. And it doesn’t don’t just apply to Caterpillar. The gist — Dream big and figure out how to make it happen — is a mantra for all of us.

Do you have a personal mantra? does your company? And if so, how well is it surviving the economic downturns?

Reader Comments

Douglas B. Moore

July 29, 2009 12:55 PM

Our mantra is "We're sitting on acres of diamonds." We look at every consulting project as a diamond hunt, and deliver the gems we uncover to surprised and grateful clients. The innovative innovation techniques we use are like night-vision goggles. It's a really fun way to spend one's professional hours because it honestly does not feel like work at all.

The term "acres of diamonds" is the title of a famous speech: http://tinyurl.com/yh6eku

Douglas B. Moore, Moore Innovation

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What comes next? The Bloomberg Businessweek Innovation and Design blog chronicles new tools for creativity and collaboration, innovation case studies in both the corporate and social sectors, and the new ideas that have the power to change the way things have always been done.

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