Strategy is what you do and not what you say

Many companies develop elaborate strategies describing what they plan to do and then do something different. This has a very negative impact on creating realistic expectations and guiding the key stakeholders.

GE seems to be falling into this situation.

Organic Growth-
Immelt has stated that he wants to grow the company organically and not just through acquisitions and yet it was reported, in a recent edition of the Financial Times, that GE made 2311 deals, worth $382 billion, in 2007. Is this consistent with the stated "organic growth"?

Financial Services
GE became highly dependent on its financial services portfolios and Immelt has stated that the company would focus more on technology based business and less on financial services. Yet it continues to pick up more financial assets. This week they purchased the Merrill Lynch Capital assets which added $10 billion in assets and $5 billion in commitments to the GE Capital Commercial Finance's base of $260 billion. This is most likely a deal they couldn't refuse, but it still adds financial assets.

Further, it is interesting to note that the combination of GE Money and GE Commercial accounts for 30.6% of the first nine months 2007 overall company revenues and 36% of earnings. Both of these have increased over the first nine months of 2006, when the combination accounted for 28.% of 2006 revenues and 33% of earnings.

It is clear that GE is still highly focused on making deals and being a financial services company, though it has asserted something different.

It is vital that words and actions be consistent. When they are not it adds confusion and can be detrimental. This may be another reason that GE has had such a difficult time increasing its stock prices.