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Why GE will fail

I was pretty good at powerpoint before I came to GE, but little did I realize that many GE managers lived and breathed powerpoint.

Why GE will fail

PHOTO: STATESMAN NEWS SERVICE

John Flannery had it so right. He realised that GE’s ship had hit the iceberg. Many people were just left dancing on the Titanic. He decided to break the conglomerate before the conglomerate sank altogether. But Lawrence Culp, a man Flannery had invited on the board of GE, was waiting in the wings. Gulp! Change comes hard to GE, as I myself realized in 2008-09, when I served as the director of the company’s smart grid initiative. I came to GE from Silicon Valley, where I had built a successful cutting edge smart energy metering business. GE Energy, my new place of work, was based in Atlanta. Some differences between America’s West coast and the deep South, and perhaps even the East coast, must be emblematic of many companies. But I worked in GE and I can only relate to my experience there. GE is a company of around 300,000 people, including contractors. It is an army, and it is run like an army. What matters most is how many stripes you carry on your shoulders. You are quizzed regularly at the very outset what rank or grade you belong to. Getting an additional stripe seems to be of utmost importance to GE personnel.

My Silicon Valley company, although small, had some really good engineers. And the work culture was devoid of many meetings. Instead you just walked over to the person you had to deal with. This bred a certain degree of collegiality and familiarity. Lo and behold in GE, even to arrange a meeting with my next-door neighbour, I had to go on Outlook and schedule a meeting. And since my laptop took three weeks to arrive, I was left cooling my heels for that time to meet anyone. The first impressions that I wanted to cultivate at the company had gone for a six. But when the laptop arrived, it came choc-a-bloc with meetings. Meetings upon meetings. My whole day would go by in running from one meeting to another. Now if the meetings were productive, it was one thing, but the sole purpose of many of these meetings just seemed to impress bosses with empty charts and graphs.

I was pretty good at powerpoint before I came to GE, but little did I realize that many GE managers lived and breathed powerpoint. The bosses too loved their powerpoint. So if you made a kick-ass powerpoint presentation, you were sure to impress your boss, and hopefully win that coveted stripe on the shoulder. GE people had fallen so much in love with their slides that they forgot that often they did not have any product or service to support those slides. Many customers complained, but GE always had the attitude: if I can make the slides, I can deliver the product or service. A wrong attitude that would cost the company dearly.

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Change comes dearly to GE, as Flannery learned to his cost and I to mine. One of my GE colleagues, who had worked long at GE but also at other blue-chip companies, revealed to me that nowhere had she seen as much hubris as at GE. GE managers seemed to have GE sewn into their pants. GE has many rotational programmes to develop managers. One is for graduates with their bachelor’s degree, another for MBAs, and yet another for young army officers leaving the armed forces. Since GE truly is a company of companies (actually called divisions), these people are typically rotated between four disparate companies of GE for two years. There they are groomed into the company’s way of thinking and get to interact with senior managers. When they leave the programmes, they are given the choice of the company (division) that they want to work in. They have obviously cultivated senior managers in these divisions and therefore have protective mentors. Managers hired directly from industry, like I was, find it incredibly hard to survive in this environment. They have to constantly kowtow to the rotational managers since they have no protective managers of their own. Most of the work that they have done before joining GE is discounted because, well, how can one do good work outside GE. If they attempt any changes, long-time GE managers run to their mentors to complain against them. And since the higher-ups have often gone through the same system of rotation themselves, they are always inclined to take the side of their mentees. They also have a hidden agenda, which is cultivating a wide base of support to further their own chances of getting stripes and pushing their ideas through. Then there is the boot camp for GE managers at Crotonville. This was built in a day and age when things were vastly different from today’s realities. Yet, it is a prized place to go to for GE managers. If you didn’t come through the rotational program, then to make it in GE, you just have to go to Crotonville. And if you did both the rotation and Crotonville, then you become virtually untouchable at GE.

It depends upon pure subjectivity of a senior manager which junior manager he sends to Crotonville. So junior managers quickly develop the art of brown-nosing. And once they return from Crotonville, their hubris knows no bounds. Hubris is what has done GE in. Hubris will continue to make it fail. Both former CEOs Jack Welch and Jeff Immelt are being blamed for the travails that GE finds itself in. Welch in turn pins the blame purely on Immelt. One was a short-term thinker and the other a long-range punter. But both are happily leading their lives after their retirement from GE. The one man who was stuck with the lemon, and who tried to make lemonade out of it, Flannery, was kicked out in ignominy in a year’s time because GE cannot tolerate change and cannot abandon hubris. What Culp is trying to do is too little, too late. Flannery was a 30-year veteran of GE. He knew the company and its managers inside out. He understood their strengths and their foibles. Culp is the first outsider to have ever become CEO of GE. He knows very few people. Senior managers will run circles around him. They, in acts of self-preservation, will tell him that this downturn in GE’s fortunes is just a blip on the radar, and everything will be fine soon. They will sabotage all his efforts at change. Change is what GE desperately needs. Change is not coming anytime soon to GE.

The writer is an expert on energy and contributes regularly to publications in India and overseas.

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