GE Audio & Video: Podcasts, Stream GE, On Demand
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[Welcome to GE on Demand: Your behind the scenes look ]
[at GE's technology and ideas, ]
[and the people who make it happen.]
[We hope you like what you find. If this is your first time listening to GE podcasts,]
[and you would like to find out more, you can do so]
[by going to www.ge.com/on demand.]
[ [♫ upbeat electronic music ♫]]
[Thomas A. Stewart is editor of the Harvard Business Review.]
[He's considered a pioneer in the field of intellectual capital,]
[how companies manage products, people and processes ]
[to maximize profits from each.]
[Stewart recently wrote GE's Growth Playbook]
[an in depth look at GE's organic growth initiative for the June issue.]
[Stewart recently talked with us about his experiences with GE.]
[I'm Tom Stewart. I'm Editor and Managing Director of the Harvard Business Review.]
[My chief responsibility is to work with the staff of editors]
[to find, develop and publish the articles that we publish every month in HBR.]
[HBR is a jounal of management ideas]
[that seeks to be a bridge between the worlds of ]
[theory and practice, between the worlds of scholarship and business,]
[that tries to help separate what really works from what's merely a fad]
[in management thinking, and helps to try to bring]
[the best of practice to the world of scholarship,]
[and the best of scholarship to the world of practice. ]
[What we really are is a publication that we present the work of experts.]
[Some of them are expert scholars,]
[some of them are expert practitioners the way Jeff Immelt is--]
[obviously somebody with several advanced degrees]
[in the school of hard knocks in the university of the streets as it were.]
[But we try to bring a series of articles about the most important issues]
[facing practicing business people.]
[It's important that there always is ]
[a constructive dialogue between the worlds of business practice]
[and the worlds of evaluation of business practice. ]
[Sometimes that's the market which is always evaluating your practice,]
[sometimes it's journalists, sometimes it's academics and scholars ]
[but there is a mutual learning loop that goes around here.]
[We learn from you, you learn from scholars]
[the market teaches us all things, ]
[and I think the more conversation that people have,]
[the more willingness that these constituencies have to learn from each other,]
[the better we'll all do at our jobs]
[which are ultimately the jobs of creating wealth and creating opportunity.]
[So, that's one of the things that I think is very cool]
[because GE has always been willing to share ideas,]
[and it's also one of the things I love about my job]
[because we're not journalists, but we are actually trying ]
[to find, develop and channel expertise,]
[we can get very much in the middle of that kind of constructive dialogue,]
[and what have we learned from this?]
[So that I hope what people will take from the interview with Jeff]
[is what can you learn from this?]
[What's here that is applicable to someplace else,]
[so that it'll make my company better,]
[my organization better, so that we can all get better at our jobs?]
[and how it has evolved over time.]
[[Thomas Stewart] Historically, GE has been the birthplace, the laboratory,]
[a showcase for a lot of developments and changes]
[in management over the years. ]
[You can go back to the first R&D lab,]
[the first time a company tried to domesticate]
[R&D and say okay what can we do if we set up a laboratory?]
[You can go back to the development of strategic planning. ]
[a lot of which really happened at GE]
[to the GE blue books that were sort of the bible of management]
[ at GE in the decades following the second World War.]
[GE has set a standard historically for both the development ]
[and implementation of management ideas. ]
[To come in now and to see five years into Jeff Immelt's tenure as CEO,]
[to see him coming in and doing some more fiddling with this DNA]
[to develop these ideas of organic growth]
[and put them on top of the strong productivity culture]
[that was the legacy of Welch's work]
[seeing another significant change in]
[the management toolkit and the purposes to which it's put. ]
[At the same time, I think that people have begun to realize]
[that when it comes to improving the economics of a business]
[cost is just one blade of the scissors.]
[It's a very important thing constantly to be working that cost blade, ]
[but you have to be working the other blade which is the growth blade.]
[Of the kinds of growth that are available to you, ]
[there are--there's organic growth. Doing it with what you have,]
[growing you own business, or there's merger and acquisition,]
[and M&A is a very difficult game to play,]
[GE has played it better than most companies. ]
[Ulitmately, I think companies are beginning to recognize]
[that if they can get their organic growth engines going better]
[they're in more control of their growth, ]
[and they can get more profitable growth]
[than the growth they simply can do by bolting on acquisition after acquisition after acquisition.]
[It'd get them more coherent and profitable growth.]
[So, it's a tougher equation to crack,]
[but it's a better result if you get it. ]
[Every company I know is wrestling with a set of issues around the customer.]
[One of the newest buzz words is the word "customer experience."]
[It's new enough that you can get seven different definitions ]
[if you ask five different people about it.]
[But getting and understanding of how we interact]
[with and meet our customers, and what happens at that interaction ]
[I think is something that people are wrestling with]
[particularly because now more and more companies]
[meet their customers in several different places at once. ]
[They meet them online, they meet them in a store, they meet them in a catalog,]
[they meet them through a salesman, they meet them in a lot of different ways]
[and trying to get some coherence around that]
[and some understanding of both the customer experience]
[and the different economics of that.]
[So that's one big area of trend.]
[Another big area of trend is obviously globalization and again in two areas.]
[One area within globalization is outsourcing cost management,]
[moving to low cost environments,]
[the reshaping of business activities]
[based on the sudden availablility of ]
[two billion in capital and these large availabilities]
[of skilled workers at different wage levels--]
[how you wrestle with that is a big issue.]
[The second issue is on the top side, the other blade of the scissors,]
[is on the growth side of that,]
[what the opportunities are for developing these markets.]
[It's interesting. The globalization piece works not only on both cost and revenue,]
[but it also works both with developed economy companies]
[--thinking about India, China, Indonesia, and so on--]
[but it also works from the other direction.]
[As companies in India, China and Indonesia]
[struggle with the question about how do they compete]
[with a GE when it comes into their market or with an IBM or an Accenture.]
[How do they compete with, and how do they, also, can they take their products]
[from their markets into developed markets?]
[So there's a huge set of issues around dealing with]
[companies and markets and workforces ]
[with a suddenly much larger capitalist landscape.]
[So, I would say organic growth, the customer question]
[and the sort of organizational design and market questions]
[about globalization are the three biggest things]
[that I see companies wrestling with, ]
[and they wrestle with them across all dimensions. ]
[across the leadership dimension, the strategy dimension]
[and the operations dimension.]
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