ABB growth plans
ABB expects sustained revenue growth and increased profitability under its mid-term strategy for 2007 to 2011. Demand for new and upgraded power infrastructure and further industrial investments in improved productivity and energy efficiencies are expected to continue in all regions.
The company plans to maintain its current core portfolio of businesses and aims to build on its leading technology and strong market positions in the fast-growing emerging economies to increase revenues organically at almost twice the rate of market growth and three times the rate of global GDP growth.
ABB anticipates profitability to increase by as much as 5% during the 5-year period, compared to 2006. As a result, earnings are expected to grow by a compound average of 15-20% per year, and after-tax return on capital will exceed 30% by 2011.
This strong position continues to fuel the news that ABB will soon make a move to acquire Rockwell. Meanwhile, Rockwell hired ex-Ford manufacturing people to run some of its US manufacturing plants, causing lots of layoffs and plant-closings. Distracted by these screw-ups, Rockwell is reported to be girding for a fight.
Stay tuned...
Leadership
The concept of strong leadership primarily at a central HQ location is outdated. Depth and breadth of leadership is critical to growth and success.
In the past, leaders used corporate mandated ground rules to get results. Many large global corporations operate this way. But today, that no longer works, especially with knowledge workers in multinational environments.
Today, good leaders find that a sensitive and sharing approach is much more effective. There is clearly a direct connection between employee involvement in all global locations and overall corporate profitability. To achieve this, leadership must be re-defined.
All employees become part of teams and share in setting mutual goals rather than being forced to achieve remotely imposed goals. The team shares in the feeling of success and the rewards. Local groups cannot be penalised for failures in other, remote locations. And yet, a spirit of company-wide teamwork is important.
Today's leaders are called upon to exceed goals by maximising diverse strengths and resources that tap into the growth and success of local markets in the global arena.
Collaborate or die
With continued, accelerating change, companies can achieve significantly more through collaboration. This means the sharing of business information, joint planning and projections with suppliers and customers - and perhaps even suppliers' suppliers and customers' customers.
Collaboration brings major benefits for all the companies involved. The Harvard Business Review reports that a 5% increase in customer retention can result in a 25% to 95% increase in profits from collaborative relationships.
An effective enterprise collaboration solution must provide the technical systems links for people to work together in distributed, intra- and inter-company teams. Effective communications must be enabled across distance, time zones, and company borders, encouraging team members to discuss, analyse and review collaboratively.
This is a key enabler, allowing companies to react more quickly to changes in supply and demand. Expand your horizons, by expanding the borders of your company through collaboration.
The question is: who can your company collaborate with? The answer is relatively simple: your best suppliers, and your best customers.
In the next few years your enterprise will be collaborative, or it will not exist at all.
Jim Pinto is an industry analyst and commentator, writer, technology futurist and angel investor. His popular e-mail newsletter, JimPinto.com eNews, is widely read (with direct circulation of about 7000 and web-readership of two to three times that number). His areas of interest are technology futures, marketing and business strategies for a fast-changing environment, and industrial automation with a slant towards technology trends.
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