Making stuff: General Electric goes with what it knows best

To train its future leaders, General Electric has rising young stars study and visit an array of different organisations, from Google to West Point.

To train its future leaders, General Electric has rising young stars study and visit an array of different organisations, from Google to West Point.

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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.

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.