To train its future leaders, General Electric has rising young stars study and visit an array of different organisations, from Google to West Point.
What can managers at the 132-year-old industrial giant learn from Google? A corporate mind-set that prizes “constant entrepreneurship,” said Jeffrey R. Immelt, GE’s chairman and chief executive, during an interview at his corporate headquarters.
And what wisdom is on tap at the United States Military Academy? “Adaptability” and “resiliency” amid uncertainty, said Immelt — skills as vital to surviving in business as they are on the battlefield.
Strategies are useful, he said, but only if they can quickly adjust to nasty real-world surprises. “In the words of the great philosopher Mike Tyson,” Immelt said, “everybody has a plan till they get punched in the mouth.”
Perhaps no company outside of the banking sector was hit as hard by the financial crisis as GE, certainly none that seemed healthy before the economic tailspin. Its big finance arm, GE Capital, long a cash machine that bolstered the mother ship's bottom line, became an albatross, threatening to pull down the entire enterprise. GE cut its dividend for the first time since the Great Depression, lost its triple-A credit rating and hastily arranged a $3 billion investment from the billionaire Warren E. Buffett.
Having skirted disaster, GE is recovering gradually these days. Its finance unit is on the mend, with the size of its debts and troubled loans trending downward. Mind you, middling recoveries are a relative matter at GE. After all, the company remains a colossus on track to deliver profits of more than $10 billion on sales of about $150 billion this year. But investors are used to getting more from GE, which earned $22 billion on revenue of $173 billion in 2007. So GE has revamped its strategy in the wake of the financial crisis. Its heritage of industrial innovation reaches back to Thomas Edison and the incandescent light bulb, and with that legacy in mind, GE is going back to basics. The company,
The big buildup of GE Capital occurred during the tenure of Immelt's famous predecessor, Jack Welch. But while Immelt, who took over in 2001, spun off the unit's insurance business, he also bulked up on commercial real estate and other loans.