The implications, opportunities and challenges of increased longevity are beginning to dawn on many companies, as our Silver Economy series is revealing. But here is one that I don’t believe chief executives have yet focused on: the increased risk that your predecessor, and possibly his predecessor’s predecessor, will still be around to snipe at your strategy.
Stephen Immelt, brother of Jeff Immelt, chairman and chief executive of General Electric, has become the second Immelt to lead a multinational organisation – in his case the law firm Hogan Lovells.
Jeff Immelt has given his brother some advice on how to do so. In an interview with The Lawyer magazine, Steve says Jeff has a rule of three-to-five for managing GE:
To the news that General Electric’s board of directors has been meeting in solemn conclave to debate whether its chief executives should serve a 20-year term, the natural response is: which egomaniac came up with that idea?
Everywhere one looks, Google is doing remarkable things. It could soon overtake Apple in downloads of applications; it is developing self-driving cars; people wear its kooky augmented reality Glass spectacles; it is signing renewable power deals in South Africa and Sweden.
Here’s a quiz: which large US corporation calls itself a “devices and services” company?
b) General Electric
General Electric’s thinking on leadership has shifted, according to an article in Wednesday’s Wall Street Journal: from breadth to depth. The WSJ writes:
[GE] for decades had made a rigorously applied but generic management tool kit central to its identity. Like all companies, GE wants some of both traits in its leaders, but the balance has tipped toward expertise.
I’m doubtful that the shift is quite as earth-shaking as the WSJ implies. Expertise is one of several attributes GE has long sought in its leaders, along with External Focus, Clear Thinking, Imagination & Courage, and Inclusiveness. In his 2010 letter to shareholders, chief executive Jeff Immelt added some new ones – including the eccentric-sounding goal that its leaders should be “humble listeners”. It already adds up to a pretty demanding checklist, as I wrote at the time.
I think most obituaries of Robert Galvin – who helped take Motorola from a family firm to a $11bn leader in mobile phones – understate his contribution to management practice, for he was, at the very least, the godfather of Six Sigma.
The omission is understandable. Six Sigma – which focuses managers obsessively on improving quality and eliminating defects – was the process improvement technique of choice for large companies in the 1990s, but it seems to have faded from public view recently. I spent a day at General Electric’s Crotonville leadership development centre in September and I didn’t hear Six Sigma mentioned once. Yet 15 years ago, when Jack Welch was in his pomp, the air would have been thick with boasts about how many “black belt” leaders of Six Sigma initiatives GE had bred.
Apple’s flirtation with the top spot in the list of the world’s largest companies by market capitalisation – which would end a six-year reign by ExxonMobil – is the sort of market trivia that we journalists love.
Perhaps it’s because rankings are so easy to understand, and a ranking voted on every day has added spice. Apple nearly went under a decade ago, which further enlivens this tale of corporate success. But given the capriciousness of markets, the other main point of interest is that Exxon has managed to hold the top position, with brief interruptions, for so long.
When it comes to his annual letter to General Electric’s shareowners, Jeff Immelt is no Warren Buffett. Not for him the jokey anecdotes and fables preferred by the Omaha billionaire in his own yearly communication. But the GE letter is still worth a read, if only because of the industrial group’s status as a training ground for future chief executives of global companies.