The Consequences of Failing to Successfully Innovate

For a lesson on how quickly business fortunes can change …

In 2000 GE was the most valuable company in the U.S., and Fortune had declared CEO Jack Welch the “Manager of the Century”. Now the company is being broken into pieces.

Larry Culp, the GE CEO since 2018, came in as an outsider and has done much to reduce the company’s debt and boost its profitability. He had indicated early in his tenure he had no desire to break the storied company up – until now.
Culp  –  “ We are of the view that investors win, employees win, and customers win. These businesses will be more focused, have a greater level of accountability, sharper and better capital allocation, and more flexibility.”

With this being the thinking today, was there ever a good reason for amalgamating very different businesses in the first place ? Or, does the end of one of the world’s greatest conglomerate signal that something significant has changed in the business environment ?
Culp – “ I have spent very little time the last three years looking back over GE history. Since the fall of 2018, it has really been about today and tomorrow.”

In addition, he indicated a major change since Welch’s time was the values and aspirations of people – and what is needed to attract, motivate and retain talent.
Culp – “ Increasingly, recruitment and retention is about more than the corporate whole. It’s about position and purpose… There was a point in time when people said, ‘ I want to work for GE ’. Today, people are more focused on addressing climate, or being in health care, or in aviation. I think going forward, what we do in recruiting and retention will be a function of what we are doing from a P&L situation.”

From this and many other examples of enterprises no longer with us, it’s clear an organization’s demise is eminent when they –

  1. Can’t effect meaningful change because they – think “ we’re good “ , are about the “ status quo “ , lack “ look ahead “ , don’t have the “ courage to try “ , etc.
  2. Are not sophisticated in digital, delivering a great User Experience, creating new value, etc.
  3. Fail to develop the ” Innovation Mindset “ to become a very entrepreneurial, agile, opportunistic organization
  4. Are unable to “ Innovate for Impact “
  5. Don’t understand the changing – nature of risk, people’s expectations, business landscape, etc.

With the importance of meaningfully improving outcomes from innovation, hopefully these insights and the other material at www.cail.com/BI is helpful in making it happen.

Nov 16, 2021   from  Fortune / CAIL      CAIL  Innovation  commentary        info@cail.com             905-940-9000