Poking through 14+ years of posts I find information that’s as useful now as when it was written.
Golden Oldies is a collection of the most relevant and timeless posts during that time.
Jack Welch died recently and Jeff Immelt is also gone from GE, but at the time, they were a good example of two sides of corporate responsibility — one who talked and the other who walked.
If you’re a long-term reader you’ll know that I’m not a big fan of Jack Welch, while I am of Jeff Imelt—two guys with very different MAP.
Knowledge@Wharton made this comment as background in describing what Judy Hu, global executive director for advertising and branding, is doing to publicize the “new” GE.
Since becoming boss in 2001 — just a few days before September 11 — Immelt has aimed to make GE not only an innovator but also an environmental leader. In doing that, he has broken with his predecessor, Jack Welch, but also, in some ways, taken the company back to its roots. Thomas Edison, inventor of the light bulb and the phonograph, started GE in the late 1800s. More recently, under the combative, controversial Welch, it came to be known for operational excellence and a brassy pugnacity.
Welch famously declared that GE would have to be no. 1 or 2 in every line of business in which it competed and would ditch divisions where it wasn’t. And he battled state and federal regulators for years over their order that GE clean up carcinogenic waste that its factories had dumped into New York’s Hudson River. Under Immelt, the company hammered out an agreement to dredge the still-polluted river bottom. “Jeff said, ‘We’re going to fix that and move forward,’”
I find this ironically amusing after reading various articles where Welch was talking about corporate responsibility.
Corporate responsibility is a major buzzword these days, but it’s hard to tell whether it’s tied more closely to
The concept of Internet-connected machines that collect data and communicate, often called the “Internet of Things,” has been around for years. Information technology companies, too, are pursuing this emerging field. I.B.M. has its “Smarter Planet” projects, while Cisco champions the “Internet of Everything.”
But it is General Electric that is really pushing the envelope in a new East Bay (extended Silicon Valley) software center where they have already hired 250 engineers in the last year and a half.
The company plans to increase that work force of computer scientists and software developers to 400, and to invest $1 billion in the center by 2015. The buildup is part of G.E’s big bet on what it calls the “industrial Internet,” bringing digital intelligence to the physical world of industry as never before.
GE believes it can leverage the breakthroughs across its product line, from jet engines to medical equipment.
GE is a much different, not to mention much smarter, company under Jeff Immelt than it was under Jack Welch.
Welch used financial engineering as GE’s engine for profit during his tenure all but abandoning and gutting the industrial R&D expertise that had sustained its profits for decades—short-term thinking vs. long-term.
Nor does GE doesn’t believe or expect to do it alone.
Now G.E. is trying to rally support for its vision from industry partners, academics, venture capitalists and start-ups. About 250 of them have been invited to a conference in San Francisco, sponsored by the company, on Thursday.
GE and its ilk are opening up new opportunities for those who love to innovate, but don’t love startups. (And that’s OK.)
And if you do have that entrepreneurial bent why not focus it on industrial or enterprise efforts, instead of yet another consumer boondoggle.
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In case you’re curious, I had a fabulous Thanksgiving and four wonderful days off (I could get used to that:) Better yet, I got everything on my to-do list done. Yea!
I hope you have some time today, because I have some great interviews with, and commentary on, some great CEOs.
However, I’m going to start at the opposite end of the spectrum. As you well know, there are plenty of CEOs that aren’t great or even mediocre, but are just plain lousy. Here is Forbes list of the 10 Biggest CEO Screw-ups Of 2010.
Enough of that, now on to the positive
First up is one of my favorite CEOs, GE’s Jeff Immelt, who took the hard road in taking the company back to its roots building real products based on creativity and innovation—as opposed to the financial engineering that drove the company under his predecessor, Jack Welch—and building people for the long term.
It’s a bottom-up approach that shuns hierarchy, and places most of the responsibility for continuous improvement on the teams. … Mr. Immelt also sees himself as the champion of what he calls “large-scale entrepreneurship” at G.E. By that, he means identifying long-term market shifts — “what’s next,” he says — and then marshaling the company’s research, manufacturing and marketing resources to capitalize on the opportunity.
Next is Kathy Savitt, C.E.O. of Lockerz, a social network and e-commerce site, who sees cynicism as the start of corporate cancer.
“Another cell of cynicism is when you feel a company is not actually living out its core values.”
Sometimes CEOs step out of the top role with the explanation that they want to focus on a more strategic role, but how many of them say publicly that they aren’t very good? Barry Diller did just that when he stepped down at IAC.
“I told them the company wasn’t being managed correctly,” Diller, 68, said. “I never thought I was a very good manager. I mean I am decent, but I want to go back to what I am good at, which is looking for opportunities to grow the business.”
“We live in a ridiculous world where Boards, in fear of investors, give CEOs six months to turn around multi-billion dollar companies that have been drifting, if not actually plunging, downwards for years; expect them to do it no matter what the situation or economy; where the slightest miss is considered grounds for firing; and long-term is a quarter.
Even when Wall Street recognizes the need to change a deeply entrenched culture they still demand that it be done in a quarter and analysts not only want perfect visions of future direction, but also exact execution plans, preferably grounded in heavy cost-cutting (read layoffs).
So, like the politicians who once elected spend much of their time fund-raising, CEOs and the senior managers below them spend much of their time focused on immediate numbers, which they must produce quarterly by hook or, more and more frequently, by crook.”
“Along with the burden of replacing the most celebrated CEO of his generation, Immelt inherited an inflated stock price—the so-called Welch premium—that fostered unrealistic expectations. Yet he has still managed to produce 14% growth in annual earnings and 13% annual revenue gains, on average, over the last five years.”
But that’s not enough.
In the holy name of “maximizing shareholder value” corporations are raped, workers brutalized and communities trashed.
What else does Wall Street do besides cripple corporate strategic efforts?
(Pssst. Come back tomorrow for a look at the fiasco of self-regulation.)
Entrepreneurs face difficulties that are hard for most people to imagine, let alone understand. You can find anonymous help and connections that do understand at 7 cups of tea.
Crises never end.
$10 really does make a difference and you’ll never miss it,
I hope you have some time today, because I have some great interviews with, and commentary on, some great CEOs.
Tuesday Wes Ball asked if Wall Street’s demands for shot-term performance undercut 
