The enemy is already within. The flood gates are open. Can GE recover?

Managing cash, balancing this out with your liabilities and obligations, knowing your market dynamics, and equally, having a good understanding of where the future growth lies, are all essential for managing any healthy business.

It is then by utilizing robust research and development projects, combined with an acquisition strategy that augments growth, management creates sustainable and evolving business model.

These are the hallmarks of effective leadership. through managing your future development, mostly through research and development, that when combined with a sound acquisition strategy, that you believe will augment your present internal growth, so as to look to sustain the business, longer-term, becomes your contribution as a leader.  These are the bedrock of good corporate management. It seems within GE, all of these have been forgotten or collapsed. Why, I mean how can that have happened?

For a company reputed to have a good management discipline and focus, yet this year, 2017, for GE, it seems all of these are lying in tatters, or some parts will lose out as a consequence, into the future. What has gone wrong at GE?

The last few months have been some of the most shocking ones in GE’s history. GE has been around since 1892 and was one of the corporate titans of the 20th Century. Since the crisis of 2008, GE has been struggling to fully regain its position but all its actions were regarded very highly as “making good progress” as it maintained a relentless momentum of shedding and acquiring operations, as well as pursuing a buying back of its shares, and paying out the beloved GE dividend. This certainly provided a highly dynamic environment for managing the business. There has been a consistent muttering that this was not fast enough or clear enough. Well, GE faces a very different set of realities today.

Today, GE is in a very dark place at this moment. It is managing a full-blown set of crisis, that has investors highly spooked and demanding answers. Its share price is hovering around $17 per share, whereas, in February of this year, it was ranging in the $31- 32 price. Its market valuation, once over $400bn, is now closer to $150bn.

This is a long read, as the story itself is only just emerging and is a complex one. I simply have to step outside my own innovation comfort box to try to get to grips with the breaking GE story. It has shaken me.  I assume you already have some awareness of what is happening in a company that has been held up over so many years, as a model of good management. Continue reading

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Connected Enterprise, Connected World

Connecting the WorldI was delighted to be invited onto a panel with GE at their R&D centre in Munich this week. Dubbed “Innovation Breakthroughs – Igniting Europe’s Growth” They were celebrating 10 years of theopening of the centre and as you arrived, you saw the cranes at work to double the facility as well as further deepen their commitments within the surrounding community even further.

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So what is holding innovation back? A new GE report

GE Global Innovation Barometer 2014I always look forward to the GE Global Barometer and the 2014 report is no exception, actually it really has moved the needle on what is presently holding innovation back. The Barometer has explored the actions or constraints that senior business executives are worrying over in their pursuit of innovation.

The fieldwork was undertaken in April and May, 2014 and covered 3,200 phone interviews to people directly involved in the innovation strategy or process. It covered 26 countries and was conducted by Edelman Berland on GE’s behalf.

The supporting website provides the GE view of how this report reflects and provides an overview, an interactive, resources and key point headings sections to explore.

I  personally think GE have actually been a little too low-key on this report and frankly far too conservative on the potential takeaways in reading their ‘take’ in the overview. It has significant implications for our organizations to grapple with but each is certainly not alone, it is a collective need to move innovation forward or you place much at risk if you don’t find solutions to the issues raised in this report.

This year the Barometer broke out of its past and steamed ahead.

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Shoring up the fragile innovation system, call GE

Well, the World Economic forum’s annual meeting is beckoning later this month. During the period of 25th to 29th January the WEF attempts to engage business, political, academic and other leaders of society to shape global, regional and industry agendas.( http://www.weforum.org/)

Just released on 18th January is the GE Global Innovation Barometer with its results of its second annual review on innovation. Here is the source site to check out and explore your own needs : http://www.ge.com/innovationbarometer/

The aim of the release is to use this and have this available for the meeting in Davos as well as shape GE’s innovation agenda going forward. For the Davos meeting lets hope our leaders have the time and inclination to review its content. No doubt GE will be there and if  Beth Comstock is going as the senior vice president and chief marketing officer of GE I’m sure she will be leading the “innovation does matter” charge.

Beth is emphasising a number of vital points that are arising from this survey. Let me provide a few, her rallying cry for business leaders is to understand where and how their innovation strategies are being challenged and to drive towards new solutions.

The report raises all the uncertainties found in today’s market place are challenging business’ ability to innovate. There is a growing restriction on accessing external funding or a conservative attitude and appetite for risk. Some would argue this ‘hording’ of cash, of not investing at this time does push us into more of a deeper hole so how can this be resolved. Enter the political group to provide a more confident environment for investment so let’s trust some resolution of resolve and consensus emerges out of this meeting of minds.

The top line summary taken from this GE barometer taken in October/ November 2011

  • • 9 of 10 executives report economic crisis negatively impacts their ability to innovate
  • • View innovation as primary driver of economic growth, jobs, quality of life
  • • Pro-innovation markets produce better economic results
  • • New model for innovation in the 21st century validated
  • • USA, Japan, Germany, China still perceived as most innovative

The continued belief, confirmed by the majority of business leaders interviewed is that innovation continues as the main driver of prosperity, competitiveness and job creation, and but also points out how challenging and uncertain the present economic and political environments we are in, may hinder companies’ ability to deliver meaningful innovation.

My one comment here on this– Leaders please ‘walk the talk’ on innovation.

A partnership paradox

I found more than interesting in the release by GE that a disconnect has surfaced between the importance of partnerships and the need to pursue them in the near term. There is a clear confirmation (86% of those surveyed) that partenerships are an important component of the new model of innovation but only 21% believe finding partners is an immediate priority to innovate more on a day-to-day basis

My comment here: That is a real disconnect between the present belief and momentum supposedly going on in open innovation and the possible activity taking place in the trenches and what the top knows about. That gap if it is there I think needs urgently addressing to get everyone on the same collaborative page.  Might actually “put the cat amongst the pigeons” for many.

Creating conditions for meaningful innovation

There is a reminder that one-size does not fit all. At the global level innovation continues to move towards an open, more collaborative model, innovation at the local level presents a complex landscape of challenges and opportunities that broad strokes can’t resolve. These constraints or nuances need to be dealt with at the market level as perceptions on innovations ‘place’ are radically different. This is where the barometer has some good insights for those applying global innovation across different market situations.

My comment here: Adopting a more flexible approach to innovation might have increasing value, especially in these more uncertain times where discontinuities will increase more than decrease.

Embracing the new innovation approach

The report reflects on the needed shift for innovation to thrive in the 21st century. That is embracing a new paradigm, one that engenders this collaboration need between several partners, values the creative power of smaller organizations and individuals, and tailors solutions to meet local needs. Business leaders around the world agree that great innovations in the 21st century will be about shared value — addressing both human needs and the bottom line – versus delivering profit alone.

  • • More than ever, 88 percent of executives agreed that the way companies will innovate in the 21st century is totally different than ever before.
  • • 77 percent of executives acknowledged that individuals and small- to mid-sized enterprises have the ability to be as innovative as large companies.
  • • 73 percent agreed that innovation will be driven by people’s creativity over scientific research.

My comment here: Again, I have to question this, not the notion or intent but the real understanding.  I would argue innovation still has not got the appropriate attention and critical understanding at leadership level for the vast majority. To believe they are taking us through a new paradigm is a tough one, I would suggest they are being dragged ‘kicking and screaming’ into the 21st century, hanging on to tried and tested 20th century practices.

My second comment here: The danger for executives in larger organizations does lie in the second point- individuals and small-to-mid-sized enterprises do have the ability to match and often exceed them in innovation. In individuals and small units or the smaller pockets of like minded communities does lie the potential of creativity and large organizations are struggling to get their heads around this dilemma.

Convergence and Divergence- narrow the gap.

So I hope the combined forces of Beth Comstock, GE and its global innovation barometer discussed in Davos provides a platform for strengthening innovation’s message at the leadership level.  I would certainly feel within GE it is shifting the focus in their own innovation challenges and as they absorb the outcomes of this barometer I look forward to seeing more innovating coming from them.

Come on GE lead the way and show that continued willingness to take risks and engage across and with society. It is better than the alternatives that many leaders are taking- to reduce innovation where they will eventually pay that price. Get the innovation message across Beth please. The Global Economy needs innovation more than ever to move forward.

Going behind the outside-in of imagination at GE.

In the past few months I have become interested in GE and how it is managing innovation. Often you read a number of negative reports on GE but is this just the big guy being picked upon by more nimble observers that have a limited insight into what is going on behind the walls of GE?

What is under the innovation bonnet at GE?

There does seems an awful lot going on in GE around innovation on what we can observe from outside looking in. Of course you would expect this in an organization the size of GE employing 300,000 people across 100 countries and generating $150 billion dollars in revenue.

In Jeffrey Immelts (Chair and CEO) own words “the toughest years of my life were 2008 to 2009”.To drop 31 billion dollars in revenue in two years is tough to manage through, and to see net earnings drop by nearly $6 billion dollars in this period to where it
is today, of $11.6 billion dollars, must have been  very hard.

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