Tuesday, January 2, 2018

GE - A Case Study in Humility

The news about General Electric, a corporate American icon, is dismal.  The stock has plummeted, and negative cash flow is bringing the huge conglomerate to its knees.  It seems that GE didn't pay attention to the hard-learned lessons of companies like General Motors that simply got too big and failed to change.

GE lost its focus.  Its mission got clouded.  I briefly touched on company focus using Ford as an example here.  It is hard to build a mission in a company that is overly diversified.  Under CEO Alan Mulally, Ford sold off divisions, focusing itself on the Ford name and the original mission of the company.  GE was, and still should be, a technology company.  Instead, they diversified into finance, insurance, and other unrelated fields.

I've often said that two things are important in organizations; culture and.... culture.  My first dive into Continuous Process Improvement was a study of General Electric's CEO, Jack Welsh.  Welsh was a staunch supporter of Six Sigma, and frankly, back then I was impressed with his application of the discipline.

But my gut feeling about Welsh was that he applied the discipline with ruthless intentions.  His application of Continuous Process Improvement was too focused on metrics and not enough around people.  Yes, metrics are important.  But people drive the metrics.  For example, his policies of only hiring and keeping the very best (rank and yank) hindered personal development.  His four E's of hiring, Energy, Energy, Edge, Execute along with Passion lacked one element.  Humility.

Humility is the quality that helps anchor blind, reckless ambition and individual hubris.  It is the reminder that the end does not justify the means, and it helps us keep our moral center.  I believe Jack Welch's reckless ambition planted the seeds for General Electric's current crisis.

Humility does have a place in business.....