GE should show the world its total portfolio...to regain confidence!

My son, Steve, and I were chatting about the GE situation yesterday and he made a great recommendation. Steve, who is a marketing expert and CEO of a new healthcare information venture, said that people really doesn't know what GE really is and the company needs to have extensive marketing and public relations campaign to explain what the company is and what it's opportunities are.

I believe that Steve is right. GE has become so complex and global that it is unclear what it is. In simple terms, GE is a strategic portfolio led company, with strong positions, globally in energy, health care and many other infrastructure markets that are very likely to benefit from the massive stimulus plans in the United States and China. It has had a strong leadership team and it is not just another financial services company.

In my book, THE SECRET TO GE's SUCCESS, I use the word LATIN to summarize GE's successes. It stands for Leadership, Adaptability, Talent, Influencing and Networks. These five characteristics explain why GE has been able to be successful for over 127 years, and overcome failures and adversity. I believe that GE still has strengths in each of these areas, but the company must be more aggressive in communicating what it is, why it is positioned to be successful for another 100 years.

In short, GE needs to give the world the BIG PICTURE and explain why they should have renewed confidence that the company will be able to overcome its current adversities and be successful for another 127 years.

Bill Rothschild, Rothschild Strategies Unlimited, LLC

Admitting Mistakes is a key to GE's Past success!

Jeff Immelt is truly in the GE Leadership tradition. He has been willing to adapt to reality, rethink his game plan and most of all today...admitted he was responsible for the company's tarnished image. This is in the GE tradition.

In my book, THE SECRET TO GE's SUCCESS, I enumerate a number of situations where the GE leaders were wrong, recognized their mistake and moved on. In fact, the first GE CEO to do this was Edison, who picked the wrong technology, but was willing to admit it and move the company into the winning technology.

I still believe that one of the reasons that GE is in the current situation is that it's GO BIG/ GO GLOBAL strategies were wrong. I strongly believe that GE's strengths have been and will be being selective and focused on markets that they can lead. Unfortunately, this is not possible when you just want to get bigger.

However, the good news is that this may change and the company will again target and win.

I admire Immelt's leadership, dedication and even willingness to invest his own money in GE stock, when others are not and giving up his incentive bonuses ($12 million) when others have not been willing to do so. He is clearly dedicated to GE and hopefully the current crisis will be a positive and not a negative. He believes that the crisis provides opportunities and I agree, but it will require both taking risks and doing the required surgery.

I believe that the GE stock has been unfairly hammered because the company has been equated with many mismanaged banks and financial services company. GE is well managed and still has over 55% of its revenues and even more of its profits in businesses that will benefit from the current "stimulus plans" and the desire to invest in infrastructure, electrical generation, healthcare and many other key industries.

Investors and analysts should look at the total picture and give GE its just stock value. It should be trading at 15 times earnings and not 5. It credit rating should be retained since it is still profitable and doing what is necessary to assure it is liquid. Overall, GE should be viewed objectively and not emotionally.

Bill Rothschild, author of five strategic leadership books, many articles and blogs...visit http://www.strategyleader.com/

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