When I first began my business career back in the early 80’s, one company that continually popped-up on the short list of well-managed companies was Emerson Electric. Founded in 1890, Emerson (NYSE: EMR) is a $US 24 billion company that has produced consistent earnings such that it has increased its dividends for 50 consecutive years.
Combined with long-term steady growth in its earnings and consequently its stock price and you have a company that has delivered results not for a few years but for decades.
Over the past 60 years or so, Emerson has had only 4 CEOs, including its current leader, David Farr. They operate 240 manufacturing plants and have 128,000 employees. Their business consists of seven platforms:
- Emerson Process Management – product technology as well as engineering and project management services for precision control, monitoring and asset optimization of plants that produce power or that process such items as oil, natural gas and petrochemicals, food and beverage, pulp and paper, pharmaceuticals and municipal water and wastewater systems.
- Emerson Network Power – provides power backup systems, embedded power, precision cooling, and connectivity technologies for data centers, telecommunications networks, and other applications.
- Emerson Climate Technologies – global manufacturer of heating, ventilation, air conditioning and refrigeration solutions for residential, industrial and commercial applications, including Copeland Scroll compressors and White-Rodgers thermostats.
- Emerson Industrial Automation- global manufacturer of alternators, electric motors and drives, electrical distribution devices, mechanical power transmission, fluid automation and ultrasonic joining solutions.
- Emerson Appliance Solutions – manufacturer of food waste disposers (InSinkErator brand) and technology solutions used in washers and dryers.
- Emerson Storage Solutions – manufacturer of residential, healthcare, foodservice and commercial storage systems, including ClosetMaid and Metro brands.
- Emerson Professional Tools – power and hand tools, wet/dry vacs, and tool storage equipment for contractors and do-it-yourselfers, including RIDGID brand.
I find that many performance improvement professionals are often ignorant of Emerson whereas they have heard of GE and the other well-known Fortune 500 companies. This is largely due, I think, to the industrial rather than consumer nature of its products and because its CEOs tend not to spend a lot of their time on self-promotion, as Jack Welch did and does.
Emerson, while certainly not perfect, is as well-run a company as one can find and is worth studying.