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strategy and business
 / Winter 2003 / Issue 33(originally published by Booz & Company)


GE’s Next Workout

There are also new classes at Crotonville, focused on how to create new lines of business. Some involve sessions at GE’s research labs outside Schenectady. As Mr. Corcoran noted, these sessions evoke GE’s history as a company shaped by Thomas Edison and Charles Steinmetz, two technologists who were used to thinking in terms of 20- to 25-year development cycles. Other Crotonville sessions are introducing management disciplines with a strategic edge, such as scenario planning and system dynamics modeling. Even GE Capital may be getting more interested in long-term strategy. New York Times reporter Claudia Deutsch noted recently that Mr. Immelt “moved much of [GE’s] debt from short- to long-term.”

Aspiring to Greatness
Mr. Immelt has at least one precedent to demonstrate the value of long-term planning. As head of GE Medical Systems, he oversaw most of the development of GE’s new digital medical scanning technology, which took 11 years to bring to market. He is now identifying technologies with which GE will systematically set out to build entirely new industries. And he is deliberately fostering forethought about how the role of GE and other large corporations, and their relationships with government, nonprofits, and other stakeholders, will change in the next 20 years, anticipating (as Mr. Corcoran notes) that “governments will challenge corporations even more and that corporations will increasingly take approaches more aligned with those of governments and nonprofits.”

In 2002, during a three-week executive development course at Crotonville, a selected group of 35 fast-trackers spent two days at Harvard — not at the business school, but at the Kennedy School of Government — considering the question, “What do we need to do to be a great company in the eyes of the world?”

I wouldn’t blame anyone for being skeptical — about either GE’s sincerity or its ability to become a more socially responsible company or a company of strategists. After all, most companies struggle to get managers to think beyond the next quarter, even when they believe it is the right thing to do. Furthermore, it may well turn out that strategic thinkers are born, not made; perhaps not even GE can make them, perhaps not even at Crotonville, not even with the techniques that made Work-Out so successful. Indeed, Mr. Corcoran admits that GE’s internal educators aren’t sure they’ve discovered methods to teach people to be more visionary and creative in their thinking, at least not ones as effective as those GE found 15 years ago to foster productivity.

“We’ve found some good people who can stimulate thinking,” he says. “But we haven’t found anybody for whom I’d say, ‘This is it. Let’s marry them.’”

Nonetheless, I wouldn’t write GE off. Few other companies have the breadth or resources and the discipline to focus on learning the way GE does. Even without those strengths, if you bring smart people together regularly to step back from the day-to-day urgencies and improve their work, with a clear line of accountability for results afterward, it’s amazing what can happen. In the end, if General Electric can find a way to teach “Everymanager” to be an effective strategist, investing in new ideas with that freewheeling but rigorous Work-Out spirit, it might change the game for “Everycompany.” At the very least, it will get them thinking.

Reprint No. 03403

Author Profiles:

Art Kleiner ([email protected]) is the “Culture & Change” columnist for strategy+business. He teaches at New York University’s Interactive Telecommunications Program. His Web site is Mr. Kleiner is the author of The Age of Heretics (Doubleday, 1996) and Who Really Matters: The Core Group Theory of Power, Privilege, and Success (Currency Doubleday, 2003).


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