Jeffrey Immelt, GE's CEO, talks about a whole host of issues during an interview with Charlie Rose. Then, as of nowhere Rose raises one of his questions:
Rose: What do you think about Warren Buffet's opinion about the undue pressure on today's executives to hit quarterly numbers for Wall Street?
Immelt: Why would that be a pressure? I give them that number! I don't see a problem with doing what you said you were going to do. Hitting a number now presupposes that I had good strategy three years ago, and then good execution ever since. On top of that, I've had to know my customer for all this time. I don't see the problem....
This position goes at the heart of the issue of not being able to think strategically as a CEO of a company due to Wall Street. If GE with its 170 business units can do it one must think that yes, it is possible to be strategic and hit quarterly numbers as well. Moreover, it seems that good strategy (and execution) implies foreseeable earnings (and profits).
I invite you, the reader, to comment on Immelt's position from your own industry/perspective. For example, how would things change in a fast moving consumer product company where, say, you don't know your customer by her first name?
Nota Bene: This is not a verbatim reproduction of what was said. It is captured only the idea of the dialogue.
2 comments:
let's not forget Immelt's legacy: a company centered around the 6 sigma program. Besides, GE is well famous as being a management school, with the merits of course going to JW. Hence the flawless strategy execution.
Now, to your point, it all depends on the strategy of course. Generally speaking you don't need to know your customers by name as long as the promise of your value proposition (be it under a brand form or not) is what's delivered to the customer. I am a big fan of the "underpromise and overdeliver" play.
see also:
http://chircu.blogspot.com/2005/04/reconciling-long-term-vs-short-term-in.html
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