Caterpillar's Genius

One of the most compelling articles I have read on strategy was featured in the May 2011 issue of Fortune magazine.  The story was about Caterpillar, the equipment giant.  Several years before this country’s economic meltdown, Caterpillar’s approach was to create absolute worse case scenario’s, and figure out how they would survive the worse.  Weekly meetings were held between division managers and the CEO where disaster models were developed.  When the recession hit, Caterpillar wasn’t scattering for a line of attack. Instead, they were executing catastrophe tactics.  While other firms were running at a loss and going under, Caterpillar’s shares were up by 88%.  It’s one thing to plan when times are tough.  It’s another thing to have a well designed strategy in place when business is relatively good.  That’s what Caterpillar did; they planned for the worse when business was good.  That’s what makes for genius and forward thinking.  That’s what sets this company apart from most.  To read the article in its entirety go to http://management.fortune.cnn.com/2011/05/12/caterpillar-is-absolutely-crushing-it/