A Company’s Product Is Growth
On September 7, 2001, Jeff Immelt took over as CEO of General Electric, at the time the world’s most valuable company. Just four days later, the world changed completely, and the company lost nearly 25% of its value in a single day.
Two planes had crashed into the towers of the World Trade Center in New York. In an instant, every existing plan and forecast became obsolete. Jeff realized that a new reality had emerged in the global economy, and that the approach Jack Welch had used to increase General Electric’s value tenfold could no longer continue in the same way.
Under the previous CEO, the organization had grown and expanded through continuous acquisitions and a corporate culture built around the Six Sigma methodology. Its purpose was to create a common language across the global organization—a shared set of principles for effective collaboration across business units—with a strong focus on process quality and efficiency.
The new reality, however, required a new culture centered on innovation and the ability to respond rapidly to changes in the market. Such agility can only be achieved through collaboration between people who are genuinely committed to the organization.
For the first time in more than 25 years, Jeff restored marketing as a corporate-level function and gave it the responsibility of becoming a driving force for innovation. The mission of marketing was defined simply: be present in the market in order to deeply understand customer expectations and emerging societal trends.
And to everyone’s surprise, the person appointed to lead it had neither formal education nor previous professional experience in marketing or business management—Beth Comstock.
The first question Beth asked herself and GE’s experienced marketing leaders was:
“What is the one metric we can use to evaluate the quality of our marketing?”
It turned out to be the most difficult question of all.
Why do we do marketing?
After brainstorming the answer, they concluded that the right metric depends on the time horizon:
over 1–3 years: profit;
over 3–5 years: market share;
over 5–10 years: company value.
And so, at one of the most challenging moments in the organization’s history—in the middle of a firestorm of disruption and change—GE began building a new culture, guided by a simple idea:
A company’s product is growth.
The engine of such a culture is made up of ambitious ideas that initially seem impossible—and the people and teams capable of turning those ideas into reality.
To immediately break through internal resistance, where people naturally try to protect their existing status and familiar ways of working, every business and functional leader was asked to present, within six weeks, a plan showing how they could generate an additional USD 100 million in growth within three to five years, either by creating new services or expanding existing offerings into new markets.
With one simple and robust intervention, the focus of every leader was redirected toward growth.
One of the criteria for success was that at least 20% of annual revenue should come from new solutions. Growth plans were reviewed and action plans refined every 90 days. Based on the plans presented and the commitment demonstrated by the teams, it quickly became clear which areas deserved the organization’s future resources, attention, and energy.
GE created the potential on which its growth for the following decade could be built: products and services designed to significantly reduce humanity’s impact on the environment.
One of its major successes was a new generation of aircraft engines consuming nearly 25% less fuel. The equipment used at Estonia’s Auvere power plant was also produced by GE, with the hope that the technology used for energy production would become increasingly environmentally friendly over time.
Many transformations never even begin because, at first, they appear too large and too complex. When leaders think about organizational change, they know it can be difficult and long-term.
Yet GE demonstrated that even one of the world’s largest companies could transform itself rapidly—and continue evolving.
Following Bill Gates’s departure from Microsoft, Satya Nadella managed within just a few years to fundamentally transform the company’s business model. Its business focus shifted from selling licenses to providing services.
That transformation would not have happened without creating a culture capable of supporting the new reality.
An organization can execute its strategy only to the extent that its teams have the capacity to perform.
Did you know that transformations like these can be implemented within 90 days?
To make change happen, you simply have to start moving—immediately and in small steps. Once you do, the elephant no longer seems quite so large or complex.
GE’s transformation began with every GE leader participating in three one-hour workshops on the structure and functioning of the human brain—to better understand how human beings, the supposed kings of nature, actually work.
A short 18-minute introduction is available here.
Wishing you rapid and sustainable business growth!