"David Brooks: Competitiveness Vs Creativity: GE vs Apple"
"So why has GE lost 40 percent of its share value in the last ten years, and more than half its of its share value since Jeff Immelt became CEO? Why doesn’t the stock market see much of a future for GE?...
A culture of the bottom line
Obviously, the results of any large company are caused by many moving parts, but one of the root causes of GE’s decline is what CEO Jeff Immelt revealed in his 2006 conversation with Harvard Business Review (“Growth As A Process”)
“At GE, the only things that move the culture are ones that show up in our income statement. It’s just the way we were raised.”
GE is the quintessential company that is run by the numbers, focused on making money for the shareholders. Because GE does it as well as anyone, its fate can tell us where this approach leads."
"GE’s main problem today is thus a 20th Century management mindset focused on making a profit by pushing products and services at customers. It was a way of managing that worked reasonably well, decades ago, when the marketplace was dominated by a few oligopolies (customers lacked both options and information about the options) and most work was semi-skilled.
Today that world has all but vanished. The reality is that we now live in the age of customer capitalism. As a result of epochal shift of power in the marketplace from seller to buyer, the customer is now in charge. Making money and corporate survival now depend not merely on satisfying customers but delighting them. To prosper, firms must have knowledge workers who are continuously innovating and delivering a steady supply of new value to customers and delivering it sooner. The new bottom line of business is: is the customer delighted? It’s a fundamental shift from outputs to outcomes."
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