Welcome to GE on Demand. You are behind the scenes with GE's technology and ideas and the people who make it happen. We hope you like what you thought. If this is your first time listening to GE podcast and you would like to find out more you can do so by going to www.ge.com/ondemand. Thomas A. Stewart is editor of the Harvard Business Review. He is 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 talks about his experiences with GE.
Thomas Stewart:
I am Tom Stewart. I am the 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 journal of management ideas. It seeks to be bridge between the worlds of theory and practice, between the worlds of scholarship and business that tries to help separate what really works and 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 like Jeff Immelt is obviously you know somebody with several advanced degrees in the School of Hardknocks and the University of the Streets as and where. 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 practicing and the worlds of evaluation of business practicing. Sometimes that's that market which is always evaluating your practice. Sometimes it's journalist, sometimes it's academics and scholars always looking at things but there is a mutual learning loop that goes running. You know we learn from you, you learn from scholars, the market teaches these 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 will 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 is always been willing to share ideas and it's also one of the things that I love about my job because we are not journalists but we are actually trying to find developing channel expertise. We can get very much in the middle of that kind of constructive dialogue of what have we learnt from this. So 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 some place else so it will make my company better, my organization better so that we can all get better with our jobs.
Operator:
A long time of server of GE Stewart discussed his relationship with the company and how it is evolved over time.
Thomas Stewart:
Historically GE has been the birthplace, the laboratory, a showcase a lot of developments and changes in management over the years. You can go back to the first R and D Lab, you know the first a company tried to sort of domesticate R and D and say 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 this sort of GE blue books that were sort of the Bible of Management at GE in the decades following the World War II, I mean GE has set a standard historically for both the development and implementation of management ideas. And to come in now and to see 5 years into Jeff Immelt's tenure as CEO to see him coming in and doing some more fiddling with his DNA to develop these ideas of organic growth and put them on top of the strong productivity culture that was the legacy of Jack Welch's work, seeing another significant change into management tool kit and the purpose is to which is put at the same time I think the people have begun to realize that when it comes to improving the economics of a business cost is just one blade of a scissors, you know it's a very important thing comfortably to be working that cost blade which is got to be working the other blade which is the growth blade. And of the kinds of growth that are available to you that are, you know there is organic growth doing it with what you start growing your own business or there is merger and acquisition. And M and A is a very difficult game to play. GE has played it better than most companies.
Operator:
Stewart went on to discuss why so many companies are focused on organic growth.
Thomas Stewart:
Ultimately I think companies are beginning to recognize that if they can get their organic growth engines going better they are in more control of their growth and they can get more profitable growth than the growth they simply can do by building on acquisition after acquisition after acquisition. You can get a more coherent possible 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 7 different definitions if you ask 5 different people about it. But getting an understanding of how we interact with and meet our customers and what happens and their reaction, I think it's something 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 catalogue, 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 2 areas, 1 area within globalization is outsourcing cost management, moving to low cost environments. The reshaping of business activities based on the certain availability of 2 billion in capitalists and at least large availability of skilled workers at different wage levels, how you wrestle with that is a big issue. Second issue is on the top side. The other blade of this issue is on the growth side of that. What the opportunities are for developing these markets and it's interesting the globalization piece works not only on both cost and revenue but it also works both with developed economic companies thinking about India, China, Indonesia and so on but it also works from the other direction as companies in India and China and Indonesia struggle with the question about how do they compete with 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 is a huge set of issues around dealing with companies and markets and workforces in 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. Operator: You can subscribe to our podcast feeds, which means that when we post new contents it will automatically be downloaded onto your computer. First click on the subscribe button below the podcast you wish to subscribe to. Then copy the URL from your internet browser and paste the link into your podcast software. If you have questions simply refer to our health section on the right hand side of the GE on Demand homepage.
skip to secondary navigation