Country needs Surgeon Leaders at all levels.

In 1993, I published my book: "Risktakers, Caretakers, Surgeons, Undertakers- the four faces of strategic leadership" because I had concluded that one of the major reasons companies, organizations and government's failed was because they had the wrong type of leader. The underlying premise is that leaders had to fit the life cycle of the organization and its strategic drivers. (Drivers are those areas that provide the organization with a sustainable competitive advantage, such as innovative products, unique sales and marketing skills, ability to have lower costs and so on.)

For instance, if an organization is a "start up venture" and trying to grow aggressively by product or service innovation, it requires a leader that is a missionary, highly intuitive, willing to adapt and betting their career on this new venture. I call this type of a leader, a risktaker. However, when the organization requires more management and selectivity, a "caretaker" leader is required. When the organization is sick it requires the skills of a Surgeon leader who is able to not only save the patient but make the organization healthy for the long term.. Undertakers were rare at the time that I wrote the book , but in recent months have multipled in number and appear to be the most typical type of today's leaders. Undertaker leaders are the individuals who are able to walk away and not worry about the future of the organizations. In many American companies, today...the undertakers walk away with hundreds of millions, never look back and their companies either are merged or sold in pieces, leaving the other employees without jobs and sometimes without pensions.

The United States Presidents have been primarily risktaker and caretaker leaders, but the country now needs "skilled SURGEON leaders" in both the executive and legislative bodies, who can do preventive surgery and permit the country to live within its "means" and not become so overweight and ill that it requires "emergency surgery in the intensive care ward".

My next few blogs will discuss the type of leaders required and the actions required to permit these leader to succeed.

Bill Rothschild
Author of "The Secret to GE's Success" and "Risktaker, Caretaker, Surgeon, Undertaker- the four faces of strategic leadership" Available on AMAZON and on www.strategyleader.com.

It takes a CRISIS TO CHANGE AMERICA...

Over the course of American history, the United States has faced a number very serious crises and has been successful in overcoming them. However, the country's response has always been reluctant and reactive, versus proactive.

Lets take a few examples:

During the 1920's the United States and the world enjoyed unusual prosperity and "perceived wealth". It was called the "roaring twenties" and no one believe it could end. There was rampant spectulation and spending over the head. Unfortantly, the world found that nothing goes up forever and it came to a "crashing halt". Though Hoover tried to turn around the situation, it took the drastic moves of Roosevelt to stop the fall and move the country upward. Roosevelt instituted welfare programs, social security and even was willing to allow cartels, under the NRA.
The country was willing to accept a loss of individual rights because there was no choice.

In the mid and late 1930's, Hitler conquered Europe and was on the verge of destroying England, Japanese took over most of the far east, but the American people felt safe and didn't want to fight other people's war. It took bombing of Pearl Harbor to get their attention and willingness to give up everything to fight to win.

Russia launched the Sputnik and the country again became fightened and was willing to invest in a space program...Sept 11th is the most recent crisis and reactions.

In each case, the country was willing to give up their rights and had leaders and resources to recoup and be successful.

In my last blog, I described what I consider the current crisis, which includes the problems of the GREAT DEPRESSION, fighting a war- almost alone, and the lack of concern on the part of the country's leaders.

It is not my intent to be a "gloom and doomer" or to say that it is too late to address and beat the crisis, but I am convinced that it will require STRONG CRISIS leadership and the willingness to accept reality, set priorities and recognize that our resources are limited and time is running out.

In the next two blogs I will describe the characteristics of a crisis leader and the ACTIONS REQUIRED NOW...

Bill Rothschild

Author of "The Secret to GE's Success" and "Risktaker, Caretaker, Surgeon, Undertaker- the four faces of strategic leadership. Both available on AMAZON and on his site" www.strategyleader.com.

A Nation in Crisis needs Crisis Leadership

Whether we want to admit it or not, the United States is moving into a crisis. In fact, it may already be in a crisis. I am not just talking about the "sub-prime mortgage/ liquidity crisis" but crises in all key aspects of the nation.

Let me explain.

1. First of all we are a "debtor nation". It starts at the top and goes down to the individual. The nation continues to rack up huge negative balance of trade each month. China, Dubai and other nations literally own the country and it gets worse, since we continue to be dependent oil and export our manufacturing and service jobs. The individual household is maxed-out on their credit cards and since their wages either remain stable or decline and cost of living increases, they are in jeopardy every month of going bankrupt.
2. Second, we have over extended our military and spend billions each month to keep Iraq secure and rebuild its infrastructure. We don't have enough military to respond anywhere else and can't afford to spend money we don't have.
3. Our infrastructure, roads, sewers, railroads, electricity etc have been HARVESTED and are being fixed in a piecemeal and shabby way. Everyday there is grid lock in the major cities. When it rains the electricity goes out and we get flooded.
4. Everything is for sale... we are willing to sell off our businesses and financial institutions. "greedy self serving" executives are willing to cash out and allow the highest bidder or most convenient investors to buy our assets CHEAP.
5. We have already exported our good jobs, given away our technology and open up facilities and R&D labs in China, India and other countries that are not secure and are not willing to honor our patents and copyrights. Even our financial service jobs are being exported.

I could go on and discuss our declining educational and health care institutions, but this has already been " beaten to death".

In short, even if we would like to ignore the reality...we are in crisis and need a new type of leader.

In my next blog, I will describe the type of leaders we need and why the current "presidential, senator and congressional leaders at the national level and the governors and their legislators at the state and local levels ALL LACK THE RIGHT TYPE OF LEADERS.

In addition, I will describe PAST situations when our country was in crisis and how the right type of leaders rose to the top and saved us....

Bill Rothschild (www. strategyleader.com)

Author of "The Secret to GE's Success" and "Risktaker, Caretaker, Surgeon, Undertakers- the four faces of strategic leadership".

My Hero-- Warren Buffett

Over the last year, I have become a student of the genius of Warren Buffet. This led to my article, in Chief Executive Magazine, comparing the simplicity of Warren with the complexity of GE. Both have a "go big" vision...but how they got there in entirely different.

Warren, only invests in businesses that are simple and he understands. This is my logic and so I agree with what he is doing and how he does it. Though he is a BILLIONAIRE and could buy the world, he has elected to lead a simple life and place his estate in the hands of other billionaires, the GATES to invest to benefit of the less fortunate.

My admiration for Warren, whom I have never met and never will, is his opportunistic purchasing of assets that fit his portfolio and make economic sense. The Forbes article of February 11, 2008 about his "super investor" Walter Schloss... who is 91 years young...still has Warren's attention is recommending "unloved stocks"....

The only issue, I have with Warren is succession planning... but he probably has already selected a competent successor and his "virtual company" Berkshire Hathaway may continue even after the legend is only just a legend.

The message is clear:

• know what you like,
• be consistent,
• do what you say
• keep it SIMPLE
• and let the competent, acquired business management run their own businesses...
  
  WHY ISN'T THIS BEING TAUGHT IN OUR BUSINESS SCHOOLS, rather than the art and science of being creative financial geniuses.
  
  Take a look at my Chief Executive article: "Decision Time for Buffet and Immelt". It can be found on my website and BLOG: www.strategyleader.com
  
  Bill Rothschild
  

GE's Back to the Future

In my book: The Secret to GE's Success, I describe how Jeff Immelt and his team have reverted back to some of GE's successful past strategies. GE's investing in and operating generation plants was one of the early Edison strategies (pages 5-6). The Edison GE company, the predecessor of the current company, built and operated power plants. Later when it merged with Thomson Houston to form the current company, it invested heavily in Utilities to enable these emerging companies to gain a competitive position. When the company became over extended and almost went into bankruptcy, it helped create the Electric Bond and Share company (EBASCO) to provide financing and still maintain a control over its customers.

Now that the electrical generation and distribution business is unregulated it makes sense to invest in these highly profitable and growing companies. Being the owner and operator of generation plants makes strategic sense and clearly is a major opportunity for GE globally.

One of the best ways to create new ideas and ventures is to search the past and see if what worked or didn't work in the past might work in the present and future, especially when the market, customers, competitors and regulations have changed.

Learn from the successes and failures of GE...by purchasing and reading my book...The Secret to GE's Success, which is now in Spanish and Japanese and will shortly be available in Chinese, Korean and Indonesian. It is also summarized on a CD...visit my site: http://www.strategyleader.com/ to learn more.

GE is still highly ADAPTABLE... the NBC/ Universal story.

In my book, "The Secret to GE's Success", I emphasize that one of the five reasons that GE has been able to grow and prosper over its 127 years is that it has been adaptable. I emphasize that "nothing and no one is sacred". This was clearly demonstrated when GE sold its Plastics business, which was the home of Welch and Immelt.

In the Financial Times, January 21, 2008 edition there is another illustration of the company's adaptable strategies. This focuses on the "turnaround" of NBC Universal. Jeff Zucker, CEO of NBC Universal, describes how the company is taking advantage of the writers strike to "end long-term production contracts worth millions of dollars and is planning to go further by cutting the pilot season." He points out that NBC Universal has become "cable network" and the cable operations "now contributes more than half the earnings". The company is moving to acquire more "non-US" cable operations.

Adapting to reality has been a major strength of GE, but it also confuses the investor and other key stakeholders and re-enforces the view that the company is just another conglomerate and is in the buying and selling of assets business.

My personal belief is that the NBC Universal business needs to be continually reviewed and that it still isn't certain whether it has been really turnaround ed. Further there appears to be a highly political issue, since many believe that the organization is too liberal and therefore putting itself in the Presidential election spot light, which could negatively impact GE as a whole.

So far, it is difficult to see what NBC/Universal's real competitive advantage is. Clearly, it has not been able to develop highly creative shows and its cable programming is nothing unique.

Your comments are welcome.

A Unique Employee Organization being liquidated by GE

Last week I was delighted to be able to discuss my book ( The Secret to GE's Success) and evaluation of GE's current "GO BIG" strategy with 150 Senior Elfuns in Schenectady, NY.

The Elfun Society was formed by Gerard Swope in 1928 to enable the company to gain the objective insights (even criticisms) from a select group of GE managers and professionals.

This was the mission of the organization from Swope's own words: "A society which would be their own, which would be separate and independent of the company and where we can have an open form for discussion, where any question may be asked and will bring someone to his feet to answer it".

In short, Gerard Swope was interested in getting the input of his "best and brightest" and to challenge his strategies and actions. In addition, he established one of the first "mutual funds" so that GE leaders would increase their personal wealth outside of company stock and had a managerial education program.

Over the years, the Elfun Society moved into providing volunteer work for the GE communities. For instance, the Schenectady chapter has a unique personal computer program, where it salvages old computers and gives them to needy schools and students. It helps to rehabiliate community buildings, parks and so on. In short, it makes a great contribution and shows the world that GE and its employees care.

The ELFUN society is truly unique and should be encouraged and developed, but interestingly enough, GE has been trying for the past few years to liquidate the organization, even though it continues to do "volunteer work" and serve as an alumni association and place where retirees can keep their company friendships alive and learn about what is happening in GE today. It has discouraged recruiting new members and having meetings.

Most companies today, say that they want to get employees involved and have the benefit of their objective opinions and insights, but few have an organization like the Elfuns to build on and use for this purpose.

I don't understand why GE is not growing and supporting the ELFUNs and trying to liquidate it, DO YOU?

If you want to learn more about the ELFUN society review pages 43-44... and if you want to see how Swope invited the Union to organize the company...continue to read the next feww the next few pages.

Swope truly believed in having employee participation and gaining the insights of others. Many talk about it but few do it.

"The World's Strongest Company's Secret"

The Japanese translation of my book is now available. It was published by Index Communications Corporation... and is entitled "The World's Strongest Company Secret", even Jack Welch and his mighty communications skills could not have opted for such a great title....

I agree that GE is still on one of the world's strongest companies"...

BUT I am concerned whether the company's current leadership and strategies can continue to earn this great title.