Changing Culture

“ “We need the work you do here. I like what you’re doing with Ventures and making progress with Lighting. Current is a good idea. We have to do more of these. The GE brand is in great shape. FastWorks is important – we need your help more than ever,” Jeff said. “Please help me change the place. Digital industrial and outcome selling – we have to make these real. The culture simply has to move faster. I need you to keep pushing.”

There was an urgency to his voice. It was not the laid-back Jeff I knew.”

Imagine It Forward, Beth Comstock, 2018, p. 344, hardback.

That was some time in 2015.

“ “Jeff, I know,” I said. “But I can’t change a 140-year old business overnight. We’re all stretched tight, there’s little room for error. I can’t guarantee predictability with new business models. We didn’t lose $35 million we never had. Our assumptions were too aggressive – assumptions everyone signed up for, mind you. We’re learning a new space.”

“Beth, I just need people to do what they say they will.”

“But we’ve never done this before. Shouldn’t we have more wiggle room, a little patience?”

Jeff shook his head. “Just fix it.” ”

Imagine It Forward, Beth Comstock, 2018, p. 350, hardback.

During third quarter 2016.

So, in the final section of Imagine It Forward, I got a tiny glimpse of GE heading into problems with the shareholders but no real reasons why. Maybe it was the impatience of investors or their tendency to drain earnings out of the business.

“…Here was a 140-year old business that had been driven to the end of its life, with little additional investment, and we were actually trying to do something with it. So what exactly was our fault? Were we the only ones who had been naïve enough or stupid enough to suggest potential upside? Was I perpetuating magical thinking by endorsing our outrageous targets? No. We were among the GE few who were actually taking risks needed.”

Imagine It Forward, Beth Comstock, 2018, p. 350, hardback.

Or maybe senior management made some poor strategic or tactical decisions.

As I understood it, the last section of the book dealt with changing the culture of the company, or as she calls it the operating system. She brought in the concept of venture capital and entrepreneurship, pushing GE to innovate faster and to use the MVP concept. She was instituting a new way of investing in projects and a corresponding new compensation system. She brought in the new young guns from Silicon Valley to help change the culture.

It seems like she was doing everything she should be doing to bring the company, or maybe a certain part of the company, into the new business realities of disruptive change.

And yet, in 2 or 3 years, GE would face problems with the shareholders and would eventually be de-listed from the stock exchange.

Why?

Wall Street analysts like to lay the blame at the feet of Jeff Immelt, but I wonder if it is really because Wall Street and shareholders were a little too hasty, a little too short-term. Changing a 140-year old company from a mighty industrial behemoth to a nimble digital competitor takes time, a patience that Wall Street and shareholders don’t have.

Doesn’t it take something like 10,000 hours to become one of the best in the world? Don’t we invest in children’s education for at least 12 years to get them ready for the world of work? Didn’t Edison say he did 1000 experiments before he hit upon the solution for electricity?

So, was it Jeff Immelt or was it the shareholders who were the source of GE’s problems?

I don’t know – I would have to do a lot more research and reading before I come to a conclusion, if ever. I’m inclined towards the shareholders’ impatience because from what I could tell in the book, GE did a lot of things that I would think would prepare the company for the changing future: embarking on creativity and innovation, going digital, embracing storytelling, introducing venture investing and changing the culture to be more entrepreneurial.

I will probably read this book again to rediscover some thoughtful insights on how to be creative, innovative and brave. There is a lot in this book to digest.