Invensys Pty reported its fiscal year results this morning. It was a decidedly mixed bag. The company as a whole showed relatively poor results, but that was due to Rail and Control. Invensys Operations Management, however was a shining star.
Here's the overall performance of Invensys Pty, contrasted below with the performance of IOM.
Invensys Operations Management's results were much better overall than the company itself. According to the annual report, IOM's businesses are control and safety systems (60% of revenue), advanced applications (20% of revenue) and equipment (20% of revenue). The Enterprise Control System (ECS) offering (InFusion) is spread across all three product categories. Here is a look at IOM's results.
Far different than Invensys Pty.
I spoke to Sudipta Bhattacharya this morning at length, and one of the questions I asked him was, "It must be a mixed blessing to have really good results like that, and have the unfortunate luck to be the only outperforming business Invensys Pty has. Wouldn't IOM be better on its own?"
"No," he said. "We have a tremendous synergy and learning between Rail and Controls and IOM, because we all look at manufacturing and transport from different angles. I like the ability to learn from them."
Maybe so. It sure looks like Invensys Pty would be hard pressed to sell IOM any time soon, since they are the star performer. If they need to sell all of Invensys, the thing to buy will be IOM.
Bhattacharya and I got to talking about leadership. He noted that in his view, and it seems to be borne out by what Invensys is doing, leaders must have some altruism. "We're doing this for the empowerment of factory workers," he said. "It isn't all about money and it isn't all about the short term." This, he said, is why he's spent so much time on leadership training and mentoring for "rising stars" in the management ranks.
We talked about the fact that increasingly, we are seeing the convergence of systems, both control and information, both in the plant itself, and in the enterprise. That is why Invensys has refocused itself on the Enterprise Control System and why Peter Martin has been doing extensive consulting with major customers.
IOM's results indicate that despite his critics, Bhattacharya's methods seem to be working, and his goals appear to be closer than ever. "This is the first time we've been over $2 billion," he said.
If you note, North America now represents only 30% of Invensys' business, with Asia/Pacific and Africa and the Middle East showing strong gains. What Bhattacharya has been saying all along is that IOM's sweet spot is nuclear power and China is building 77 nuclear power plants, even after Fukushima Daiichi's mess.
The real question is whether IOM can find real traction for the Enterprise Control System. When InFusion was launched in 2006, it appeared to be neither fish nor fowl, and nobody believed Invensys when they said it wasn't really a new way to sell Foxboro I/A systems. We will see what happens.
This is clear evidence that the economy has recovered/is recovering. If Alan Beaulieu of the Institute for Trend Research is right, Bhattacharya will have a rising tide to lift his boat for at least another year or two. It is certainly easier to perform a major company turnaround in a rising business climate, that's for sure.