CO John Flannery, STATING THE OBVIOUS AT GE; SHOCKING WALL STREET. Last Wednesday, General Electric’s CEO John Flannery told those attending the Electric Products Group conference that the organizational and functional remedies at GE were not going to be a “quick fix” – comments that state the obvious about organizational change.
For organizational changes in companies to be effective, the changes must be prescribed and concerted, and the progress will most often be slow. In our work with large corporations at Change Strategists, Inc., any long-term process of organizational change is just that – long term. The changes that have been determined as needing to take place in the organization are orchestrated and rolled out efficiently through a strategy systems process, but the results, as with any important change, take from several months to up to a year and one-half to achieve. The process is specific to each organization; no cookie cutter process will work effectively. In GE’s case, Flannery says of the process, “It is ultimately a function of the free cash flow of the company . . . and the things we do with the portfolio.” One of the change remedies was to cut the GE shareholders’ dividend last November – only the 2nd reduction of the pay out since the Great Depression. This fact, alone, is indicative of the degree of the need for change at the company and the seriousness with which Flannery and his directors are approaching the organizational change processes at GE.
Needless to say, “Wall Street was shocked by Flannery’s remarks.” It’s clear that those who make up “Wall Street” need to avail themselves of a good, solid education on the topic of organizational change management.