GEWATCHER: 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.