Why is the PRESS trying to DESTROY GE?

Why is there a current desire to DESTROY GE?

Before the 'WALL STREET MELTDOWN and the uprising against those who required and begged for Federal Government bailouts and survival packages, General Electric was a global ICON...

GE's GREAT ICON image was a combination of a strong, well managed company with predicable earnings, the largest capitalization, the WELCH deification and a diversified portfolio. I described in one ONE WORD...LATIN.

LATIN summarized the reason that the company not only prospered, but excelled, while its other peer DOW JONES companies disappeared or suffered. LATIN stands for Leadership (no cookie cutters) Adaptability (nothing is sacred) Talent (grow your own) Influencing (Being politically unacceptable) and Networks (meeting realistic expectations).

However since the Wall Street meltdown...GE has been placed in the "Financial services... you can't believe them" category and its stock has dropped to all time lows...

BUT the good news is that the GE management has Adapted...(consistent with the GE tradition) and admitted it made mistakes and is moving in the right direction...

• Jeff Immelt had vowed to reduce its dependence on GE Capital and return it to what is supposed to me...A means to grow the Industrial businesses and not be an END.
• Recognition that GE is a US company with a global presence... he said in the most recent annual report to invest globally, but keep the US operations a center of the global growth.
• A return to the disciplines of sound strategic thinking and decision making and include all of the input, both positive and negative and avoid being SURPRISED.

Jeff Immelt also made a personal commitment. He gave up over $12 million of personal wealth, because it was RIGHT and, even though his personal commitment deserved the incentives, the company stock did not...this is truly unique.

OVERALL.. I personally have a vested interest in GE, since I own GE stock and am a loyal GE alumnus...but I am and have been a strong opponent to the Immelt strategic vision of GO BIG and GO GLOBAL... My book: THE SECRET TO GE's SUCCESS and my continuing blog" GEWATCHER.. have continually challenged the IMMELT strategy and have described, in depth, GE's failures...

BUT.. GE is still the most successful US company and has demonstrated, over 127 years, that it is a winner and able to adapt and conquer change. One of the key elements is STRONG, DEDICATED, COMMITTED LEADERS...and based on what Jeff IMMELT has done and continues to do..I PERSONALLY am committed to continue my personal WEALTH to his leadership...however if I see evidence this is not correct, I will be the first to let you know.

Bill Rothschild, CEO Rothschild Strategies Unlimited LLC.. a personal, boutique that will let you know what is real and what you need to do to win...

GE wants "naysayers"!!!

In his "letter to shareholders" in the 2008 Annual Report: Jeff Immelt states:

"For 2009, we have sharpened our strategic processes and scenario planning. We have increased the frequency and changed the agendas of our operating meetings. Each of our businesses has set up a process to identify the "naysayers" in each of our industries to make sure their voices are heard inside GE. From the top to the bottom and across GE, we must and will listen more critically and respectfully to each other".

I would not use the word "naysayer" to describe what it takes to be a strong, skilled strategy reviewer, but it is clear that GE now recognizes that it is impossible to develop sound, realistic strategies and expectations, without having many points of view.

This is not a new GE situation. In the mid 1970s, Fred Borch, GE's CEO, recognized that his ambitious "go big/ venture" program was failing to provide "profitable earnings" and so he instituted the disciplined strategic thinking and decision making process that helped turn the company around.

Borch conducted a study and found: "In many cases, the operating businesses didn’t do an adequate job of evaluating their markets, customers, and competitors, and they often failed to identify technological and sociopolitical trends and forces that could negatively impact their businesses. The result was that there were too many omissions, miscalculations, and surprises." (excerpt from my book:" The Secret to GE's Success")

GE Instituted Annual Review Systems that included multi-functional professionals, from inside GE, consulting firms and academics. The propose was to challenge the underpinning assumptions and be sure that the best insights and intelligence sources were used in constructing the strategic priorities and execution strategies.

There was a continuing review and monitoring of the key underpinning assumptions to assure that they were wrong, actions could be taken to minimize any negative impacts. The key was to avoid "surprising yourself" and minimize the impact of surprises, if and when they occurred.

Another key element of this system was Admitting Mistakes. "The overriding objective was to ensure that the business units had realistic expectations and weren’t kidding themselves or senior manage­ment. Management had been surprised by all of the ventures, in one way or another, and this had negatively impacted its credibility on Wall Street. The new process was designed to ensure that these surprises were minimized and that promises were met. Once this process was in place, the worst thing that business unit managers could do was surprise senior management. If they did, they were often demoted or even fired" (excerpt from my book: The Secret to GE's Success")

I was fortunate to head up this strategy review and integration process for several years and it is one of my consulting firms most successful services.

I am pleased that GE plans to reinstate this type of review process, so that it will not suffer the consequences of "surprising itself".

Bill Rothschild, CEO Rothschild Strategies Unlimited, LLC

Immelt asserts: "GE will always invest to win globally, but this should include a preeminent position in a STRONG U.S."

Jeff Immelt made a strong statement in his 2009 "shareholder letter" which clearly demonstrates that he is in the GE leadership tradition. In my book: THE SECRET TO GE'S SUCCESS and my GEWATCHER blog, I have continually asserted that one of the key reasons that GE is still a strong and vibrant 127 year old company, is that its leaders were willing to admit mistakes and adapt. Jeff continues to adapt, admit mistakes and move on...he calls it "resetting". This is another example of adapting.

This is what Jeff wrote in his shareholder letter:

I have also learned something about my country. I run a global company, but I am a citizen of the U.S. I believe that a popular, thirty-year notion that the U.S. can evolve from being a technology and manufacturing leader to a service leader is just wrong. In the end, this philosophy transformed the financial services industry from one that supported commerce to a complex trading market that operated outside the economy. Real engineering was traded for financial engineering. In the end, our businesses, our government, and many local leaders lost sight of what makes a nation great: a passion for innovation.

To this end, we need an educational system that inspires hard work, discipline, and creative thinking. The ability to innovate must be valued again. We must discover new technologies and develop a productive manufacturing base. Our trade deficit is a sign of real weakness and we must reduce our debt to the world. GE will always invest to win globally, but this should include a preeminent position in a strong U.S.

There is no question that some of most talented smartest people became enamored with the "get rich/quickly" opportunities in financial services and haven't used their talents to create new products and services. Hopefully the "Wall Street meltdown" will change this and more students will go to engineering and scientific universities and not business schools. I agree with Jeff that we need to reward real innovation and creativity and not just "creative book keeping".

Bill Rothschild, author of THE SECRET TO GE's SUCCESS and other global best selling books and articles..visit http://www.strategyleader.com/ to learn more.