Damm the torpedos....

"Damm the torpedoes...full speed ahead" is an old adage from the Second World War... it shows courage and convection that the game plan was right and even if things are on going to plan, we will win.

This is what Jeff Immelt is asserting. He is a TRUE believer that his GO BIG, GO GLOBAL, PORTFOLIO GAME PLAN is right and will succeed.

Based on my 40 plus years, as a strategist, successful consultant and ardent student of strategies and GE, I have great concerns about this "macho" style. It is true that GE has a very diverse and in many cases strong portfolio and competitive position. But I still believe that the company is too complex and subject to too many unique and possibly unattractive situations.

I still recommend that the company stop its growth for growth sake approach and refocus, get smaller, less complex and invest in winners....this is the essence of the strategic leadership that has made the company successful in the past... it still gets down to LATIN...right LEADERSHIP, willingness to ADAPT... having a strong, deep TALENT pool, INFLUENCING the key stakeholders, by meeting expectations and having realistic and viable NETWORKS and programs.

Bill Rothschild, author of THE SECRET TO GE's SUCCESS, the only comprehensive, objective and insightful assessment of GE's successes and failures and what we can learn from them.

Paranoia...poor choice of words.

Immelt is in INDIA and said he was PARANOID about the current World Economy... Since he graduated from Dartmouth and HARVARD... I am confused about his choice of worlds... I think the word PHORIA would be find for any rational individual to describe today's world, but Paranoid had other meanings... this is what I found on the Internet...

• Paranoia is a disturbed thought process characterized by excessive anxiety or fear, often to the point of irrationality and delusion. Paranoid thinking typically includes persecutory beliefs concerning a perceived threat towards yourself. In the original Greek, παράνοια (paranoia) simply means madness (para = outside; nous = mind). Historically, this characterization was used to describe any delusional state.
  Sometimes in common usage, the term paranoia is misused to describe a phobia. For example, a person may not want to fly out of fear the plane may crash. This does not in itself indicate paranoia, but rather a phobia. The lack of blame in this case usually points to the latter. An example of paranoia, however, would be fear that the pilot is an alcoholic with no evidence to suggest such, and would crash the plane as a result of this.

Please Jeff... select the right word to describe your feelings and perceptions, since every word you say and everything you do has a major impact of ALL YOUR STAKEHOLDERS.

Bill Rothschild, author of the ONLY objective and insightful assessment of what make GE able to prosper and grow over 127 years...THE SECRET TO GE's SUCCESS and continuing assessment of the IMMELT ERA..(GE Watcher..on http://www.strategyleader.com/

The "GO BIG" Failures

The 1950's there were the GO BIG Conglomerate Era, when Harold Geneen's ITT, Litton Industries ruled and became so big that they failed.
In the 1960's it was other giant GO BIG companies, like GM, Ford and major steel and chemical companies went BIG and ultimately became so big that they allowed the smaller, more focused Japanese companies to gain beachheads in the US market and gradually eroded their share and profitability. Today they are contracting and beginning forced to merge to just survive.
In the 1990's it was the DOT COM Wonder kids, who WENT BIG and forgot that they had to make money on the way up the growth curve. Most have died or been combined with other companies.
The major Business Schools, academics, consultants and management publications and books taught management to THINK OUT OF THE BOX.. be imaginative, destroy the bureacrats, forget about the inhibitors of doing it right, be creative with the accounting and financial systems, USE OTHER PEOPLE's MONEY and not have large reserves.
In short, the " experts" promoted the GO BIG proponents and eliminate those in their organizations who challenged and required the organization to consider the positives and negatives of growth.
In the past year, THE "GO BIG insurance company", AIG, "THE GO BIG mortgage" company, Countrywide, "GO BIG Energy company", ENRON all went into bankruptcy and have had to be rescued.
The MESSAGE is loud and clear...BIGGEST for its own sake, is not a viable long term goal and all companies must reinstate the solid, objective and "tough minded" strategic thinking and decision making that made the strong in the first place.
They must remember that:

• ALL THINGS TO ALL PEOPLE strategies never work and



• SELECTIVITY,



• CHALLENGING everything and being willing to prune the portfolio and focus on those segments that are attractive and where they are strong.

In short this means relearning and applying the disciplines of sound strategic thinking, execution and being prepared for change. I have spent my entire career teaching and helping my clients do this type of thinking and decision making and it has worked. I continue to provide these services.

Bill Rothschild, author of the PUTTING IT ALL TOGETHER- a guide to strategic thinking and decision making. The first guide to strategic thinking and its updated edition and STRATEGYLEADER (R) strategy software and tutor. BOTH are available on http://www.strategyleader.com/, take a look.

WHAT A DISAPPOINTMENT...WHY?

Today the Dow average went to the fifth highest levels...YET...GE Declined...

Immelt and his DREAM team need to explain what is happening...

There may be a logical reason...but it is not OBVIOUS.

Bill Rothschild, author of THE SECRET TO GE's SUCCESS... the only book that gives a comprehensive, historical and OBJECTIVE view of the GE SUCCESSES and FAILURES, BUT GE management have done whatever they could to negate its success in the United States,

"Never Over promise and Minimize (if not avoid) Surprises!!"

"Never Over promise and Minimize (if not avoid) Surprises"

This was the essence of the Ralph Cordiner and Reg Jones eras in Strategic GE's history.

These are some quotes from my book" The Secret to GE's Success" which focus on creating and meeting investor expectations:

• " In the 1950's, Cordiner initiated Investor Relations as one of the new corporate functional services. The organization's job was to help create realistic expectations among the investment analysts and then communicate expectations internally so that the operating and executive officers understood the right level of profitability to achieve.


• "Jones was one of the most skilled executives in this regard. He established a team consisting of staff members from investor relations, finance, and strategic planning (my job at the time) as well as his own vice chairmen to determine the expectations that could be achieved consistently"


• "If there was a gap between what business units promised and "Wall Street expectations" Jones recognized that if he compelled all of the businesses to increase their profit levels, he might negatively impact the ability of at some divisions to execute their approved strategies.. a special evaluation was created to assure that the increased profit levels didn't negatively impact the "growth businesses" (again one of my jobs).

I had the good fortune of being part of the Jones process and helping the company meet Wall Street Expectations while implementing the approved strategies. It was challenging but fun.

Bill Rothschild, author of THE SECRET TO GE's SUCCESS the most comprehensive, objective assessment of GE's 127 years of progress, now in six languages.

Challenging the FOLKLORE...Team Competence versus Loyalty

One of the obvious failings of the Bush administration has been Bush's emphasis on loyalty rather than competence. There is no question that President Bush has had several unqualified members of his team and they have held their jobs because they have been "team players".
This has practice is also very prevalent and obvious in many large corporations and it has negatively impacted all of the key stakeholders.

According to Doris Goodwin's " Team of Rivals", Lincoln selected his cabinet members because they were competent and provided another perspective, even if they have adversarial views. His cabinet included people who ran against him and in some cases even criticized him in public. One of his team was running against him even while a member of the cabinet. But Lincoln used the talents of these adversaries to lead in probably the biggest CRISIS that the country had to face.

In my book: Risktaker, Caretaker, Surgeon, Undertaker- a four faces of strategic leadership I emphasize that there are no one leader for all times and that the team must fit the leadership type and the situation. If an organization is in crisis, the leader and the team must be willing to challenge everything, hold nothing sacred and seek all views.

In my latest book: THE SECRET TO GE's SUCCESS.. I emphasize that GE has avoided the "cookie cutter" approach and selected leaders and team players that were different and fit the unique situation.

When I was GE's Corporate Strategist, I always looked for and selected people who provided different insights, even if I didn't agree with them. When I led the Management Development Program and Strategic Planning Workshops and Seminars, I included professors and outsiders who challenged the GE Folklore and didn't just recite the party line.
I am not sure what is happening in GE today, but it is vital that all companies and organizations seek out people who are competent and not just "back slapping/ yes" people. Unfortunately it appears that most of the failing companies today have not sought "teams of rivals" but "teams of friends, neighbors and those who refuse to challenge the folklore".

Bill Rothschild, CEO of Rothschild Strategies Unlimited, LLC

Warren Buffet to the rescue and GE's Secret to Past Success!

The last time that GE had to have a "white knight" come to their financial rescue was in 1897, when Edison GE and Thomson Houston had to merge and JP Morgan put in capital to save the company.

On October 1, 2008, it happened again... this time it was Warren Buffet, bought $3 billion of Preferred Stock... to help save the GE TRIPLE A rating.

Since I wrote my book, THE SECRET OF GE's SUCCESS, I have challenged IMMELT and team...GO BIG strategy. It was clear to me that promising to grow the company 8% organically seemed to be improbable, if not impossible. Unfortunately, I have been right and a change in strategy is required.

GE introduced strategic thinking, decision making and planning in the 1970's because Fred Borch had embarked on nine new, organically grown, ventures. Five of ventures failed, but Fred recognized and admitted his mistakes and focused on being selective and not growing for the sake of growth. This action enabled the company to focus on winners and contributed to the Welch's remarkable earnings and stock value growth. There are lessons to be learned from this period in GE's 126 year history.

I still have faith that GE leadership will rise to the occasion and replicate the company's past success and ability to adapt to change. However, it will require all five key success factors: Leadership, Adaptability, Talent, Influencing and Networks (LATIN).

If you wish to learn the reasons for GE's past success, take a look at my book: The Secret to GE's Success, now available on Amazon's Kindle and in six languages.



Bill Rothschild, author of Global best seller: The Secret to GE's Success, Risktaker, Caretaker, Surgeon, Undertaker- the four faces of strategic leadership, GEWatcher blog on Rothschild Strategies Unlimited LLC website: http://www.strategyleader.com/