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Business Management Lessons from the Ongoing Gorman-Rupp Company (GRC) Success Saga

Earnings per Share have grown by more than 20% over the past five years. Return on Equity has averaged 11.50% during this period. This member of the Miscellaneous Capital Goods Industry from Mansfield, OH crossed the $500 million market capitalization mark in March 2008.

Ongoing Gorman-Rupp Company has spent 75 years contributing to its stakeholders by making pumps. The company is focused on moving liquids and slurries against natural forces of gravity and pressure. What can we learn from the glorious history of this remarkable corporation?

A. Human values form a bedrock for sustained business success: the company was formed 75 years ago on the basis of a handshake between the two founders after whom it is named. Gorman and Rupp had endured great adversity during the Great Depression before they decided to start business together. Their operating philosophy has helped the corporation weather good and bad times with equanimity.
B. It is very easy to work hard for a caring employer: this company has built a competitive strength in terms of Human Resources over decades. One of the first management actions of this company in the 1930s was to help employees own homes. This approach is not just ethical, but makes good business sense. A corporation can leverage improvements in demand only if it has teams of dedicated people on tap.
C. Focus on domain expertise pays: troops in Afghanistan and Iraq, emergency workers, and a variety of industries, depend on pumps made by this company. The company has acquired other manufacturers of specialized pumps at appropriate junctures. It is a world leader in its area of expertise, as a result
D. Quality Assurance is the best safeguard for delivery of customer value: the company has been an early mover in seeking independent validation of its business operations. It acquired ISO 9001 status as early as 1995.

There is more that stock investors can learn from the histories of great companies. We can foster a new future for the stock market simply by looking back.

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