General Electric (GE) is in that period of time that companies fall into when they fail to pay attention to the trends of the time. This is nothing to do with the current GE leadership, CEO Larry Culp, or even its recent past leadership (former CEO John Flannery who served for a few months in the position).
Instead, the blame falls solidly on Jeffrey Immelt who served as CEO for almost a decade, following on Jack Welch’s long term of leadership. (cf, past posts on this topic.) The WSJ recently did a mammoth piece entitled “GE – Burned Out.” Which gives one a hint of how burned out the WSJ is. I was invited to participate in a WSJ conference call this week with the authors of the piece – and it was definitely less than inspiring. Not from GE’s perspective, but from the capacity and knowledge of the WSJ. After hearing them talk – and hearing them trying to blame everyone from Jack Welch (for being “authoritarian and always insisting that his way was the right way”) to soft-pedaling the role of authoritarian Immelt in this process, I have lost most of the slim measure of confidence that I have had in the WSJ in recent years. So, let’s take this story from a different perspective. The facts are that GE missed some real opportunities during the decade that Immelt was CEO. Among other things, the GE leadership at that time missed the fact that times were changing rapidly and there was a real need to keep up with the times and their demands for organizational change – among them, selling off some of the properties that Immelt had amassed while CEO. None of those things happened as they should have. Instead, Immelt pretty-well pooh-pooed anyone who would suggest such a thing (getting rid of board members who called for such actions, etc) and persisted in blaming the GE power unit for all his woes. And, so, GE at this time has pretty-well ground to a halt because of things that needed to have been done at propitious moments, but were not. But that doesn’t mean that the company is “done-for” – as the Journal title suggests. I would say that they’re “down, but not out.” There are a number of things yet to be done that could certainly turn the company around and, as I understand it, CEO Culp is hard at work on those areas. It’s my view that with a strong contingent of loyal GE employees and a good leadership team, most anything can happen. I suggest that we give the new folks who have a bit more savvy on running companies a chance before we write GE off.