Before we get into the really powerful lessons shared by Jeff Immelt around the digital transformation of General Electric, study this screen grab for a minute.
Firstly, you will notice that the company is 124 years old. Any company that old will have legacy systems and legacy thinking without question. How can it not. The threat of having an entrenched "this is the way we have always done things" is very real. Secondly, this is an industrial company, at its core when you study the products that they bring to market. They are the furtherest you will get from a technology company.
However, at the start of this year Jeff Immelt, GE’s CEO made this startling comment:
“We can’t be an industrial company anymore. We need to be more like Oracle. We need to be more like Microsoft.” and in order to get there, he plans to “evolve our business model accordingly.”
The reason for this is clear when considered in the context of where we are at present. All companies, no matter what industry they are in, are being forced by the impact of the 4th Industrial Revolution to digitise all their processes, their customer interactions and their physical products. The minute that happens to a business, then that particular company becomes a digital company, regardless of the product they bring to market.
So for Immelt to say that GE “can’t be an industrial company anymore” is 100% correct.
However, for an organisation to plot this course requires a leadership that understands the implications of times we live in and the need to evolve rapidly in order to stay relevant. The digital transformation of a company begins with leadership transformation spearheaded by the CEO and his or her executive team.
In the Harvard Business Review piece entitled To Go Digital, Leaders Need To Change Some Core Beliefs, Barry Libert, Megan Beck, and Yoram Wind make the following observation regarding Immelt’s comments:
“Immelt is talking about deep, fundamental changes, not superficial adjustments. GE, like the majority of other organizations in the market, has a strong and lengthy history focused on making, distributing and selling things—from jet or railroad engines, to kitchen appliances, and even wind turbines. But in a world that is transitioning from physical to the digital and from firm to network, maintaining this traditional focus is a sure-fire strategy for failure. The ability to adapt is more important today than it ever has been.”
Listen to his comments for great insights on their digitisation journey in this McKinsey interview. Some great insights for leaders who are wanting to keep their companies relevant in the 21st Century.
Interview transcript here