Recently reread GE Jeff Immelt’s Letter to Shareholders in its 2008 Annual Report. A few comments. I like how GE has a picture of its senior team in the introduction. It is not the first time but it goes a long way in honoring the team. I always find GE’s CEO Letters revealing. The general theme is that GE along with the global economy and business in general have to be “reset” for the long-term and perhaps forever. “The interaction between government and business will change forever. In a reset economy, the government will be a regulator; and also an industry policy champion, a financier, and a key partner.” Immelt calls it a reset world. The CEO is resetting the company to focus on three big themes – emerging market growth, clean energy and sustainable healthcare.
One of my favorite parts, of course, came when Immelt discusses GE’s reputation. Immelt has often mentioned “reputation” in his CEO Shareholder Letters and clearly considers reputation a metric of success. He said in an earlier CEO Letter (2002): “My own role on the GE Board is clear. I have two functions: lead the company as CEO with integrity, clarity and purpose, as measured by financial performance and reputation.” This time he said, “Let’s face it: our Company’s reputation was tarnished because we weren’t the ‘safe and reliable’ growth company that is our aspiration. I accept responsibility for this. But, I think this environment presents an opportunity of a lifetime. We get a chance to reset the core of GE and focus on what we do best.”
When I wrote my book on Reputation Recovery, I had a section on Resetting the Company Clock which came from a statement made by Nissan CEO Carlos Ghosn. It is the role of the CEO to not only be the company’s reputation guardian but to reset the company clock when crisis strikes, winds shift or people do not recognize the urgency of the day. The word reset is a good one.
Interestingly, Immelt notes that GE has instituted more scenario planning, presumably to see around corners and a new process to identify what he calls industry “naysayers” who might have something important to tell his unit heads. We call these people “badvocates” but either way, GE intends to listen more carefully than before.
In the last paragraph, Immelt says “GE will be a better company winning through this crisis.” I underlined the word winning. In recent weeks, I have heard several CEOs use “winning.” Maybe something’s changing.