A Look at How a Major Company Moved Forward
For more than a century, General Electric has been a powerhouse. However, focus tends to fall on the more recent reign of CEO Jack Welch, ignoring the long, illustrious history of one of the oldest publicly traded companies in the nation. In his book, The Secret to GE’s Success, former GE Corporate Strategist William E. Rothschild identifies the five major reasons why this company has managed to not just survive but thrive over the past 126 years.
According to Rothschild, GE’s success can be summed up in the acronym LATIN: leadership, adaptability, talent, influencing and networks. The book explores how these factors were brought to bear during each era of the company’s history, beginning with its founding by Thomas Edison.
Leadership, Adaptability and Talent
Edison, it turns out, was not a particularly adept leader. It was only through the intervention of major investors that the company was able to gain strength in the marketplace. This set the foundation for what Rothschild calls a “shared/team leadership approach,” whereby input from management-team members is actively sought and valued.
Throughout the book, Rothschild discusses the individual contributions of each of the 10 men who have led GE during its history and proposes that one of the major reasons for GE’s longevity has been its ability to select the right leader for the right time. Toward this end, the corporation maintains a commitment to proper succession planning, ensuring both continuity and flexibility as it moves from one leader to the next.
That relates to the second principle: adaptability. In an ever-fluctuating marketplace, businesses that refuse to adapt will perish. Throughout the years, GE has been called upon to change everything from its business practices to its focus.
In the 1950s, the company found that its ability to create and improve products was hampered by technical limitations. To combat this, GE increased its research capabilities and produced things such as new metals that allowed the company to boost the efficiency of existing products as well as expand its product line.
Whether it’s research, management or any other position in the GE hierarchy, the corporation has always valued talent. The book explores the ways in which the company has sought to attract talent, but more importantly, to develop it fully. The concept of the “professional manager” was born at GE, according to Rothschild.
Influencing and Networks
The penultimate factor behind GE’s success is influencing. Most obviously, this applies to taking a proactive role in influencing governmental policies and decisions in order for GE to maintain its competitive advantage. Beyond that, GE leaders have been adept at identifying company stakeholders, defining their expectations and determining whether these stakeholders are friends or foes. Relationships can then be altered accordingly.
Finally, the author expounds on the role of networks throughout GE’s history. This refers to the integrated internal systems that govern everything from quality improvement to financial management. The company’s commitment to developing and maintaining these systems, as well as a willingness to alter them when necessary, has helped it maintain its core strengths while adapting to an ever-changing market.
Why We Like This Book
Rothschild’s applicable chapters conclude with a “takeaway” lesson, explaining how the principles can be applied to the reader’s business. The book’s practical touches can help readers make GE’s success secrets their own.