Invent Your Large Company Too

Former GM auto parts maker Delphi Automotive has reinvented itself since its 2005 bankruptcy. At 34%, its return on invested capital is now nearly double the industry average of 18%. How did Delphi accomplish these stellar results? It did so primarily by focusing on innovative products such as safety devices and electronics, rather than commodity products like spark plugs and ball bearings--in the process whittling its product line down by nearly 75%. Now, Delphi's criteria for accepting new orders keys on a judgement of whether it raises the return on invested capital, not just whether it keeps the production lines running or makes automakers happy. As with the rest of the US auto industry, it took a near-death experience to wake up Delphi, but its experience shows that even multi-billion-dollar corporations can reinvent themselves.