Some corporate annual reports are worth reading for more than the numbers. I enjoy seeing how businesses articulate their mission and strategic aims to investors. Often it is just so much yada, yada, yada. But GE's often is not.
Open the report, and you find this statement.
"Even as the world seems to grow smaller, the challenges - and opportunities - of a global economy are bigger than ever.
And that's good news for GE.
In a more complex world, GE's size is an advantage. GE dreams big ideas, tackles big problems and anticipates big growth now and in the years to come"
OK. Good. I'm for it. Let's look deeper.
The letter to stakeholders, and I believe that is just about everyone, globally that state the following strategic imperatives.
1. SUSTAIN A STRONG PORTFOLIO OF LEADERSHIP BUSINESSES THAT FIT TOGETHER TO GROW CONSISTENTLY THROUGH THE CYCLES;
2. DRIVE COMMON INITIATIVES ACROSS THE COMPANY THAT ACCELERATE GROWTH, SATISFY CUSTOMERS AND EXPAND MARGINS; AND
3. DEVELOP PEOPLE TO GROW A COMMON CULTURE THAT IS ADAPTIVE, ETHICAL AND DRIVES EXECUTION.
The phrases highlighted about are my emphasis.
1. GE means leadership businesses in terms of earnings growth and return on total capital. However, in order to lead from a financial standpoint, you have to lead in other ways. In a chaotic, changing environment, it requires more than just putting out the best product. It requires innovation, creativity and a willingness to change.
2. For GE, common initiatives is translated into Organic Growth. What does this mean? "We use our size to accelerate growth and innovation using the principles of depth, breadth and strength ... . We apply this philosophy against the major element of growth: technology, customer value, commerical excellence, globalization and innovation. Our aim is to make organic growth a process that is both predictable and reliable."
In other words growth is the common initiative that we should see across the full spectrum of GE's businesses. Here's the chart that shows how this will be done.
3. GE wants to build a common culture that is adaptive, ethical and drives execution. I think that is right on the money. Here's where they begin to get my attention.
Growth Traits: To achieve our growth goals, we need a new type of leader. We studied the attributes of companies that have had a long-term success with organic growth and found they had five traits in common. We call these growth traits.
· They had external focus that defined success in market terms.
· They were clear thinkers who simplified strategy into specific actions, made decisions and communicated priorities.
· They had imagination and courage to take risks on both people and ideas.
· They were energized by inclusiveness and a connection with people, which builds loyalty and commitment.
· They developed expertise in a function or domain, using depth as a source of confidence to drive change.
If the head of every team, department or strategic initiative in GE were to fulfill these five traits over the next year, it would transform the company. The same is true for your company.
Think about it this way.
1. Your leadership is customer-centric. Not that the customer is always right, but that the happiness of the customer is what produces long-term success. If you get caught up in the internal workings of your business, you'll lose sight of your customers, and they will know.
2. Clear thinkers know who they are, what they stand for, know intutively how to handle problem situations and whether an opportunity is the right thiung. Clear thinking is the product of intense intellectual interaction within groups. If you aren't discussing on a deep enough level, then you probably are not thinking clearly enough. Ask yourself the simple question - "How do I know when I am thinking clearly?" How do you know? You will only know when you must verbally articulate your thoughts to people who matter.
3. In order for imagination and courage to function together, not only does the leader have to be engaged in learning new ideas on his or her own, but they are looking for ways to apply what they are learning. To test ideas requires courage because the inertia that must be overcome to even consider new ideas is huge. It takes courage, and courage requires confidence by the leader, and if his or her superior doesn't have confidence in them, then there will be no courage, and imagination will be discouraged, and inertia will not be overcome, all the while your competitors are changing through imagination and courage. I think this is a very serious issue in all most all organization. How to transform your business when you don't have to only because if you don't you'll be force to play catch soon.
4. Business may be measured by the financial bottomline, but it is run on relationships. For whatever it is worth, you should think of your organizational structure, not as a system of business processes. Instead think of it as a structure to enhance collaborative relationships. If you organize for communication, then you'll be organized for growth.
5. In other words, there is no replacement for continued training. I believe in that, but I also believe that the best training is practical, not theoretical alone. So, if you are learning in the context of what you have to do everyday, then you are not taking advantage of your learning opportunities.
I love the ambition that Jeffrey Immelt expresses in this report. He knows he can't do it alone. He also knows that unless he articulates a high level of ambition, that it will not develop at GE. This is leadership.