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..
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