Thursday, October 2, 2008

Back to SELECTIVITY...Learning from past successes.


The last time that GE had to have a "white knight" come to their financial rescue was in 1897, when Edison GE and Thomson Houston had to merge and JP Morgan put in capital to save the company.

On October 1, 2008, it happened again... this time it was Warren Buffet, bought $3 billion of Preferred Stock... to help save the GE TRIPLE A rating.

Since I wrote my book, THE SECRET OF GE's SUCCESS, I have challenged IMMELT and team...GO BIG strategy. It was clear to me that promising to grow the company 8% organically seemed to be improbable, if not impossible. Unfortunately, I have been right and a change in strategy is required.

GE introduced strategic thinking, decision making and planning in the 1970's because Fred Borch had embarked on nine new, organically grown, ventures. Five of ventures failed, but Fred recognized and admitted his mistakes and focused on being selective and not growing for the sake of growth. This action enabled the company to focus on winners and contributed to the Welch's remarkable earnings and stock value growth.

There are lessons to be learned from this period in GE's 126 year history.I still have faith that GE leadership will rise to the occasion and replicate the company's past success and ability to adapt to change. However, it will require all five key success factors: Leadership, Adaptability, Talent, Influencing and Networks (LATIN).

If you wish to learn the reasons for GE's past success, take a look at my book: The Secret to GE's Success, now available on Amazon's Kindle and in six languages.

Bill Rothschild, author of Global best seller: The Secret to GE's Success, Risktaker, Caretaker, Surgeon, Undertaker- the four faces of strategic leadership, GEWatcher blog on Rothschild Strategies Unlimited LLC website: http://www.strategyleader.com/

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