The Two Sides of the GE Coin: Grunt Work and Creativity

Jeffrey Immelt is working hard to build the greatest business of all time, and I think he has a chance to make it happen. He's CEO of a little company called GE.

Under former CEO, Jack Welch, GE rose to unprecedented heights through a fanatical focus on generating sustainable, profitable growth by buying businesses and applying the same management approach over and over again. Over the years he was CEO (1981 - 2001), Welch developed concepts such as "boundarylessness organizations" where ideas flow between business units as effortlessly as messages flow through e-mail, "we'll be number one or number two in the industry or we'll get out," and Six Sigma, which is like quality improvement on steroids. From light bulbs to turbines to financial capital, The GE Way was to cut out waste, improve quality and increase sales. GE hit its goals with relentless consistency.

When Jeffrey Immelt became CEO he quickly realized that GE was too big to buy its way to significant growth. He understood that future profitable growth would have to happen organically. That is, he would have to grow the business internally rather than adding on significant revenue through acquisitions. It's not that he stopped buying. It's that he bought companies that would generate their growth like a new tree planted in your backyard grows over time. In one week he spent $14 Billion for Vivendi Universal and $10 Billion for British medical-imager Amersham. (Source: Fortune magazine April 5, 2004) Essentially, Jeffrey Immelt returned GE to its roots as in Thomas Edison, founder of the company that eventually became GE. These two acquisitions were different than most of the others before them. These were companies steeped in creativity and innovation.

As Jerry Useem wrote in the Fortune article, "The companies Immelt is buying are slowing down earnings growth meaning that Immelt isn't buying growth so much as he's buying the ability to grow." In other words, Immelt is creating a new GE, one built on creativity and grunt work.

An interesting new book called, The Rise of the Creative Class by Richard Florida, talks about the rising percentage of people who earn their income through their creative abilities. He points out how the world has moved from the industrial age to the information age to the creative age.

Can people in your organization take a blank sheet of paper and begin to craft an idea that would add value to your target market? Can they implement that idea with relentless focus and constant improvement in a way that generates profitable, sustainable growth?

If they can, you are building the business of the future. It simply won't be enough to be able to out execute your competition or buy them out. Unless you're developing the creative capacity of your work force, you will be left behind. It's this duality of creating more value and executing the details of delivering the value that forms the foundation of great companies in the future.

Republishing Articles

Each month my e-newsletter gets republished in approximately 20 blogs, on-line publications, and internal publications for businesses, universities, and not-for-profit organizations. If you would like to republish all or part of my monthly articles, please send me an e-mail at dan@thecoughlincompany.com with "Republishing Article" in the subject heading. I will send you the article in a word document. All I ask is that you include my name as the author of the article and a short paragraph at the end of the article about me with a link to my website.

Take care and have a great month!

Dan Coughlin

Back to Newsletter Page

P.O. Box 1245 Fenton, Missouri 63026
Phone 636.825.6611 Fax 636.825.9831
E-mail info@thecoughlincompany.com