Pity poor GE and new CEO John Flannery. Its great reputation is tarnished. Its stock price has tanked. And its immediately previous CEO apparently decided that the best way to deal with a host of problems was to kick them down the road to Flannery, who took over in 2017. As a result, he’s having to do damage control, and at the same time take a series of what must be immensely unpopular steps to save the company.
How could the titan that was once touted as the best-managed company in the world, and Jack Welch the best CEO since forever, fall so low? Welch’s succession planning and testing has been written up as a model of great corporate leadership and governance. He let three leaders know he was thinking about them and tested them for a year in various leadership positions with various challenges. The winner? Jeff Immelt, the “immediately previous CEO” who started GE’s road to ruin.
And if you dig a little deeper, you’ll find that a good deal of Welch’s success depended on the success of GE Capital in a time when money was a good business to be in (until 2008). Then, it turned out, GE Capital wasn’t central to the business GE was in, and it had to go. That was considered a smart move at the time, but then it became clear, in a miasma of hurt for Flannery, that it was just about the only unit of GE that actually made money. Until it didn’t.
Phew. Turns out this conglomerate business is not so easy. They were in fashion years ago, as a way of smoothing out risk in each of the various sectors the conglomerate was in. Then, focus became The Thing, so conglomerates were out, and undervalued relative to their worth as a series of separate companies, and so the dismantling began.
GE was one of the few that appeared to be strong enough to avoid that fate. Now, if it survives, it will be as a much smaller company in a few select industries, like railroad engines, that it seems difficult to make money in, in 2018.
If you’re telling the story of GE as a corporate communicator, what do you say? A few principles will help guide the thinking.
1.Every corporation is created for similar reasons, but every corporation is unique. So don’t spend a lot of time on the similar stuff – making money, making cool things, even being responsible corporate citizens. Rather, figure out what the unique story at the core of your company is. Tell that.
2.The big story is not as interesting as the little ones. CEOs almost always get this wrong. They think about – and are rewarded for the success of – a few basic numbers. ROI, profit, growth, that sort of stuff. That’s vitally interesting for them. But for the rest of the world, the little stories that animate the actual business are far more interesting. Nobody – beyond a few people who stand to make money on the results – cares about whether GE’s profit is 10 percent or 12 percent.
3.The early stories are always the most interesting. Origin stories, stories of small beginnings, stories about your early struggles – we can all relate to these. When you get big, it’s hard to get excited about the stories, because they’re not at a human scale. Unless they’re atrocious. Did you know that, under Immelt, GE not only had a fleet of private airplanes, but a shadow fleet of private airplanes whose role it was to follow the other ones around in case they had mechanical difficulties? If Plane A broke down, Plane B was at the same airport, ready to go. Now, that’s a Plan B I’d like to be able to afford.
4.Stories can only make one point effectively. Corporate communicators are always being pressured to load up their work with lots of messages. Make the picture show diversity! Let’s set it in a green building! Don’t remind people of that! I’d like to cite our work in Africa! And so on. Telling lots of stories at once is a sure recipe for disaster.
5.Don’t presume the destination. The interest in a story lies in the struggle of the journey. The result is much less exciting than the all the failures attempting to achieve the result. But your corporate overlords will want to keep everything positive, chirpy, and complete. You have to resist the pressure, and give them (and the world) effort, real emotion, and messiness. That’s the stuff of stories.
I don’t know how GE is going to straighten out its mess – that’s Flannery’s job. But I do know that GE needs a new story, urgently, to replace the one that’s currently dominant, and which has a lot to do with emperors and their clothing – or lack thereof.
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