IT AMAZES ME...that current LEADERS don't meet promised EXPECTATIONS...

In my entire career as a senior executive at GE and my 25 years plus years as strategic consultant, I always told my clients that it is critical to NEVER PROMISE what you can't deliver.
Unfortunately, this message has been lost on the current generation of "leader?", in business, in the government and in even in religion.
Surely, the BUSH administration didn't do what they promised and it helped create the MESS we are now in.
But my most disappointing, even amazed, situation is in General Electric. A review of GE's past showed that the company failed to meet the PROMISED EXPECTATION, but learned from its mistakes and since the latter years of BORCH, and the JONES and WELCH eras... GE could be counted on to do "what it said".
IMMELT has now violated this THREE TIMES in the past year.
Last January... he asserted, without hestitation... that GE would make its promised numbers.. but a month later GE failed to meet the promises.
Just a few months ago IMMELT promised that GE would continue to provide the dividends for 2009 and that it would maintain its AAA rating.
Today.. it reduced its dividend 68%... and it is clear that its AAA rating will be reduced.

I am not sure what the CURRENT GENERATION of SO CALLED LEADERS... didn't learn that it vital to DO WHAT YOU SAY and ALWAYS MEET THE EXPECTATIONS THEY CREATED.

WHY HAS THIS HAPPENED?

I am disappointed and amazed and hope that at some point in time that the CURRENT LEADERS??? will recognize that REAL LEADERS CREATE AND MEET REALISTIC EXPECTATIONS...

Bill Rothschild, author of the only comprehensive, objective review of GE's 127 years and the author GEWatcher and StrategyReview blogs...both on www.strategyleader.com

IT AMAZES ME...

In the GE SUCCESS TRADITION...

I was privilege to attend a meeting at which GE's CEO, JEFF IMMELT talked about the challenges facing the world and GE today and I was impressed by his insights and sense of reality. Jeff described the challenges we all know about the economy and added a few personal insights, as well as the issues he has had to deal with.

I listened to his insights and decisions and came a way with a strong feeling that Jeff is a TRUE LEADER in the GE TRADITION and is trying to ADAPT to the dynamics and complexity facing us all, but most of a $ 187 Billion, global conglomerate.

As a GE investor, though I am shocked and discouraged with the low GE price and EPS, I am willing to accept that Jeff and his team are in control, know what is happening and convinced that the company is 'SECURE", a word he used several times.

I still have concerns about many of the elements of Jeff's strategies and vision, but not about his dedication, abilities and willingness to face reality and make the best decisions possible. I wish I could say the same about those making decisions in Washington about spending the biggest "money throwing" event in the history of the world.

If I made investment decisions, I would bet on the IMMELT team to keep the ship on course and viable...

Bill Rothschild..author of the best case history on what makes a company successful, THE SECRET TO GE's SUCCESS.... now in six languages and on Kindle...

ADAPTING AND REINVENTING GE- A Secret to GE's Success.

In a recent speech Jeff Immelt, current GE CEO, explained that the key to surviving and even prospering in a Crisis situation is ADAPTING.. This is consistent with GE's remarkable ability to reinvent itself over its 127 years.

Each of the GE's leaders was challenged in different ways, but learned from their challenges and moved the company in a new and exciting direction.

In my latest book “The Secret of GE’s Success” I describe how GE has resisted what I call: cookie cutter succession planning.

GE has had only ten CEOs in its 126 years, with a range of six to twenty year reigns. Remarkably each have been different and have leaders who were very different and were able and willing to ADAPT to change.

Charles Coffin succeeded Thomas Edison when Edison GE merged with Thomson Houston. Coffin was a very gentlemanly executive who was able to integrate these two different companies and their cultures, while developing highly positive relations with customers. He was faced with leading the company out of the Panic of 1893, a major depression. He negotiated with JP Morgan to take over the company’s equity position in the emerging electric utilities and installed the GE conservative financial systems.

Swope and Young had to lead the company both during the highly prosperous periods of the roaring twenties and the great depression. These unique individuals also played a major role in influencing social and economic policies and encouraging the unionization of the company at a period of major labor unrest and violence. Further they instituted a consultative management approach to the company that was highly unique at the time.

Cordiner institutionalized management and took strong stands against Big Government and Big Labor, as well as contributing to political conversion of Ronald Reagan. Unfortunately his achievements were darkened by the great electrical conspiracy and his inability to select his personal choice as successor.

Borch was faced with the challenge of moving the company ahead after the price fixing scandal and instituted one of the most risky and challenging new venture program ever. He moved the company in services, including financial services as well as several high tech ventures. To his credit, Borch recognized he had miscalculated the ability of the company to undertake and lead all of these ventures simultaneously and instituted the portfolio leadership systems that have enabled the company to continue deal with diversity and change.

Jones was a financial leader that used the portfolio management approaches to grow both revenues and earnings in a predictable way that calmed the concerns of Wall Street and positioned the company to move its stock upward.

Welch was a completely different type of leader than Jones. For over twenty years he was able to grow the company, prune its portfolio and make it a financial services giant, while continuing to grow some of the traditional businesses. He became a celebrity CEO and GE and Welch were viewed as one and the same.

Again when Welch left he selected an individual with different styles and visions. Jeff Immelt was faced with the challenges of succeeding a legend, keeping the company’s stock high, maintaining the triple A rating and initiating changes in a maturing portfolio of businesses. Further he was faced, four days into his tenure, with the aftermath of September 11, and the fact that the company not only lost employees in the World Trade buildings, but one of its leased aircraft and a stock that feel rapidly and has not regained the levels it had prior to 9/11.

In short, GE has had the unique ability to select CEOs who could lead for long periods, were not inhibited by the past and could adapt to change. I am pleased that Immelt is following his predecessors and wish him success in doing as well as they did.

Bill Rothschild, author of four vital Strategic leadership books.

Strategy is for the HEALTHY...not the sick or dying.

During my career, both as GE's Corporate Strategist and in my more than 26 years as a consultant, I have emphasized the need to do strategic thinking and decision making, when the organization is healthy and has options, and not when it is very sick, in the intensive care ward or dying.

The recent, shocking collapse of the automobile and financial services industries, prove that it is impossible to develop viable options when the patients are in emergency surgery. It amazes me that the so called "leaders" of giant, prestigious companies, like GM, Ford, Citicorp, Merrill...could have been so surprised by the decline and fall of their markets. They fell into the GO BIG/ GO GLOBAL trap and tried to be all things to all people and do "creative packaging and book keeping" to grow market share. Unfortunately this has proven to be a global phenomena and not just an American problem.

I became involved in learning and practicing the art of strategic thinking in the early 1970s when GE's CEO Fred Borch recognized, that he had tried to do too much too soon and it negatively impacted GE's profitability and threatened its future.

Mr. Borch admitted he made a mistake and became the advocate of the principles of strategic portfolio leadership and management. GE was willing to challenge everything and everyone and focus on areas where GE could win.This enabled the company to prosper. Unfortunately, even GE, has become a victim of the GO BIG and GO GLOBAL mystique...but at least the company still has a strong portfolio and has options. It still makes money and hasn't lost billions and forced to ask for government handouts.

Hopefully it will turnaround its stock and credibility decline, learn from the past and re institute the sound strategic thinking and decision making skills that it had in the past.In summary, I hope that we all learn from this current malaise and re institute the disciplines of sound strategic thinking and decision making.

If you want to learn more read Putting It All Together- a guide to strategic thinking decision making..available on http://www.strategyleader.com/.Bill Rothschild, Rothschild Strategies Unlimited LLC

CONVERSION OF RONALD REAGAN...THE GE INFLUENC

Only one company can make the claim that one of their employees became president of the United States, and even more assert that they changed this individual political philosophy. The company is General Electric

In my latest book: The Secret to GE’s Success, I describe how and why Ronald Reagan converted from being a liberal, union loving Democrat to a highly conservative Republican.

Ronald Reagan was hired by GE to host the very popular GE Theater, as well as to become the company spokesman. Reagan toured all of the GE plants and addressed GE employees at all levels. He worked for Lemuel Boulware, who was the architect of an anti-big government / anti- big labor strategy and policy that became known as Boulwarism.

The underpinning of this employee and community relations philosophy and strategy was that Big Government and Big Labor, independently and in an alliance, were dedicated to take away management’s rights and make the company a socialist state. Even though GE had been pro-labor and pro-government in the pre-war years, under Gerard Swope and Owen Young, the GE leadership, under Wilson and then Cordiner took the opposite view.

Under Boulwarism, GE management studied the needs of the employees and communities and balanced them with needs of the company to be competitive and profitable and decided on “fair but balanced” offer prior to the union negotiations. They presented the offer before the union talks and were willing to take a strike, rather than do was not right for all of the major stakeholders. Further they told the communities that if they could not operate effectively and profitably in the current locations they were ready and willing to move their production to more company, non union, locations. Obviously, these practices were not popular with the unions, the government and the traditional GE communities, but GE did what it said and divided and conquered the unions.

Reagan, though he wrote his own speeches, became a missionary for Boulwarism and he ultimately concluded that the message was right and so he changed his own socio/political philosophies. This conversion led to his running and winning the office of Governor of California and then the US Presidency.

Bill Rothschild...author of "the Strategic LEADERSHIP Library"

SHARING THE DEPRESSION BURDEN---GE STYLE

One of the reasons that GE was so successful was the LEADERSHIP of Gerard Swope and Owen Young during the depression... this is an excerpt from my latest book: THE SECRET TO GE's SUCCESS...
"In 1929, the stock market collapsed and the world suffered the greatest economic depression in modern times. As noted, GE's revenues dropped more than 75% during the period. In comparison to many of its peers, who instituted sweeping layoffs---and in many cases put skilled and loyal employees out on the street--Swope and Yound were both more compassionate and more pragmatic. They recognized that if they wanted to keep talented people, they would have to take steps to minimize the Depression's impact on them.
Three programs were introduced:

1. Unemployment benefits. GE provided loans and relief to those workers the company could not continue to employ.


2. Guaranteed work program. GE's electric lamp business allowed workers to share the pain. Instead of just laying off 20% of the workforce, it instituted a program to allow employees to reduce their work hours from five to four days. Because each worker took a 20% reduction in pay, the program permitted GE to keep everyone employed.


3. Profit sharing in the 1930's. Another important innovation of the Swope/Young era was the introduction, in 1930, of a profit-sharing plan. This was unique in several ways. First it was offered at a time when many companies were having trouble simply surviving. Second, it was offered to all employees, regardless of their position in the company. Again, this plan was consistent with the socialistic philosophies held by Swope and supported by Young."

Read the entire story of the genius of Swope and Young---models of REAL LEADERS from which today's CEOs could learn...especially GE management..

Bill Rothschild, author of COMPLETE STRATEGIC LEADERSHIP LIBRARY...

ADMITTING TO MISTAKES AND MOVE ON...

One of the continuing fatal flaws of many executives in the business, public and religious sectors is that they appear to be incapable of admitting they made a mistake. In fact, many of them make matters worse, sometimes fatal, by trying to cover up the mistakes or looking for scapegoats.

My latest book “ The Secret to GE’s Success” demonstrates how GE leaders from the inception of the company in most cases, have avoided this problem by admitting that they made a mistake, taking responsibility and moving on, hopefully trying to avoid repeating the mistake in the future.

Edison made the first, almost deadly mistake, of selecting the wrong way of generating and distributing electricity. He selected the direct current approach (DC) while his adversary and the rest of the industry selected alternating current (AC). Recognizing his error, he at first tried to discredit the competitive approach, but when it was clear he was wrong, he moved aside and allowed others to merge his company with Thomson Houston, which held second place in the alternating current market. The new company became even stronger and was gifted with innovative and strong management. If Edison didn’t admit he was wrong, GE would never have been able to survive.

But GE management was not always willing to admit its mistakes and resulted in a major set back. GE unfortunately was not as forthcoming in the late1950’s when it was accused of price fixing and instead of admitting the mistake it adopted its own version of “Watergate” which forced the company to abort its planned succession plan, slowed its growth and negated its historically strong relationships with the electric utility executives.

For three years GE’s revenues leveled at $5 billion and it forced the new CEO, Fred Borch to pursue nine major new ventures simultaneously, covering a wide spectrum of product and services growth opportunities. Because of a series of miscalculations and wishful thinking five of the nine ventures failed and even the four successful ventures took longer to yield positive results than anticipated.

To Borch’s credit, he recognized his mistakes and took corrective actions, which led to the installation of a very successful strategic portfolio leadership system and philosophy. The failed ventures were aborted and the limited financial and manpower resources focused on the winners. This lead to a very thorough and continuing assessment of all the key businesses and the ability to anticipate the need to change before it was necessary.

The Welch era continued to practice this “nothing is sacred” leadership style and to take calculated risks, but also willing and able to admit mistakes and move on.

However, the current GE leader and his team appear to be reluctant to admit that their GO BIG/ GO GLOBAL strategy needs to be challenged and adapted to meet the changing world. Immelt is vowed and determined to continue to invest globally and is highly dependent on government business to be successful. This is okay, but it is a challenge to develop and sustain strong relationships with governments, many of who are in a crisis mode.

Bill Rothschild, author of the ONLY comprehensive, objective and insightful assessment of GE's successes and failures, THE SECRET TO GE's SUCCESS.

AN IMMELT OPTION- SPIN OFF GE CAPITAL and ADAPT TO REALITY!

Every day, as a stockholder who has a significant amount of my personal wealth in GE and also a loyal GE alumni, I watch the GE stock decline, that appears to be both a victim of POOR MANAGEMENT and the overall depression of the DOW.

Since I have written my book THE SECRET OF GE's SUCCESS, that provided an objective and insightful view of GE from its beginning to 2007, I am amazed at the decline and fall of the GE stock, the threat of losing its AAA rating (one of the prides of the company) and even the possibility of the decline or loss of the 100 year plus dividend.

I could take pride in "I told you so"..which I did in my book, but I am deeply concerned about the real GE stakeholders, the investors, employees and retirees, who have continued to believe the ability of GE management to their job, first of which to protect these valuable stakeholders., but this is not my message.

GE leadership starting with JEFF and his dream team, must be willing to do what his predecessor did and recognize mistakes and accept reality. This means that they must STOP GOING BIG..and start the necessary SURGERY.

(Note.. I call Immelt's team the dream team because in my book that GE replaced sound strategic thinking education with "dream sessions" which in my day was called creative thinking and later christened "out of the box thinking". Unfortunately I believe that MOST of our problems today is that too many people GOT OUT OF THE BOX and were not objective and face reality"

The first surgery must be done on GETTING RID OF GE CAPITAL... this should be separated from the company and made a separate BANK HOLDING COMPANY. This will allow the investment community to separate GE from the BIG BANK LOSERS.

Next, the company should do a complete and comprehensive STRATEGIC PORTFOLIO evaluation, which was the heart and soul of the REG JONES strategic thinking and decision process... it short, it must do what REG JONES and JACK WELCH did, perform skillful and profitable surgery...but it should establish a time line to assure that GE sells everything at the PEAK of its value, like WELCH did, and not make it a fire sale.

Finally, Immelt must re-establish the critical thinking and evaluations of the FINANCIAL and STRATEGIC AUDIT people.. is short reward and not kill the "messengers with the bad news".

I have many other recommendations to the IMMELT team and the GE board...but this is enough for now... in short, GE must return to the policies and practices that allowed it to, not only survive, but prosper during its 127 years and not be like their competitors (Westinghouse, RCA and so on, who are now only footnotes in business history...

LEARN FROM THE PAST SUCCESSES AND FAILURES..is the message of my book and my recommendation to the IMMELT team

Bill Rothschild, author of the only comprehensive and objective assessment of GE's successes and failure, now in six language and a world best seller...THE SECRET TO GE's SUCCESS..or as I wanted to call it BREAKING THE GE CODE..