Any business that’s hoping to compete in the world of technology needs to be ready to change their business model at the drop of a hat. That’s why Apple Computers has been able to leap out of the PC market to dominate the consumer electronics market with iPads, iPods and iPhones.
While Apple is one of the latest examples of corporate/technological innovation, they’re hardly the only one back in the 1920’s, Pratt & Whitney Machine Parts, an Ohio-based machine tool company found themselves at a similar crossroads. Thanks to a fair amount of innovation and courage, the founders of this massive aeronautical firm were able to turn their post-World War I slump into one of the biggest success stories in aviation history. Here’s how they did it.
In the Spring of 1925, an aviation executive named Frederick Rentschler was ready to make a name for himself in the airplane engine business. He’d long worked for other companies and, though he did well, he wanted something more, that’s when he started experimenting with new aircraft engines.
As it turns out, Rentschler was a man with impeccable timing. Thanks to a glut of lucrative war contracts, the aviation industry was flush with capital, but not a lot of new business. In this atmosphere he was able to convince the folks at Pratt & Whitney Machine Tools that Pratt Whitney engine parts might be way of the future.
Rentschler was a very good negotiator and before long, the company was manufacturing innovative airplane engines and parts that would serve crucial roles in the Second World War. At the dawn of the Great Depression, Pratt Whitney merged with Boeing and several other big firms in deal that would be struck down by antitrust regulators in 1935.
Though the conglomerate was broken up the Pratt & Whitney brand survived and thrived. Today, the world of jet engine parts is dominated by Pratt & Whitney, Rolls Royce and Boeing. (That’s some pretty high flying company.) Pilots across the world have grown to trust the PW name and are willing to pay a huge premium to have these parts and engines in their birds.
PW is a long way from Rentschler’s vision of an innovative new engine, but they’ve never lost their ability to move with the market. It’s a lesson that any business could benefit from.