Congratulations to General Electric's 50 year Commitment to the Gas Turbine Business..

The General Electric Energy site reported the following on December 16, 2008

"Government of Iraq Signs Power Generation Agreement with GE Energy Valued at Approximately $3 Billion Iraq Power Initiative Nearly Doubles Electricity Generation Capacity (Baghdad, Iraq - December 16, 2008)The Iraqi Ministry of Electricity and GE Energy announced today at a ceremony in Baghdad that they have signed an agreement for power generation equipment and services valued at nearly $3 billion to provide much-needed electricity to support Iraq's future economic development. The announcement is a significant milestone as the country seeks to rapidly develop its energy infrastructure and increase its electricity production.Under the agreement, GE Energy is providing heavy-duty frame 9E multi-fuel gas turbines capable of supplying 7,000 megawatts (MW) of electricity. The Government of Iraq plans to install the units at key sites around the country to provide needed support for the electricity grid. GE's 9E gas turbine technology has proven reliability and performance in more than 400 applications worldwide."

This order demonstrates GE's long term commitment to its core, innovative products and services.

A Historical Perspective.
The Gas Turbine business had its roots in the Second World War and made a major venture under the leadership of Ralph Cordiner in the late 1950's. This technologywas used in electrical generation, locomotive and ship propulsion systems. In addition the technology was developed in Evendale's Jet Engine business. Both the Schenectady and Evendale competed aggressively to gain market share in some cases competed against themselves.
In my book: The Secret To GE's Success (page 96) I used this internal competition to describe why decentralization had some limitations. "One of the major limitations of decentralization was that in some situations the departments competed against each other. For instance, the jet engine and gas turbine department developed two different versions of the gas turbine and found themselves competing against each other in some markets. This wasn't resolved until much later during the Borch era; meanwhile, the result was customer confusion and the loss of business to competition".

General Electric has long history of product innovation and a willingness to take a long term view, even experiment with organizational systems that provided both external and internal competition. This is a unique characteristic of GE and has contributed to its continuing growth and vitality.

Bill Rothschild, author of the only comprehensive, objective and insightful evaluation of GE's 127 years of successes and failures, THE SECRET TO GE's SUCCESS, now in six languages and a global best seller.

Rothschild Strategies Unlimited LLC

Right Leader...for the right time

In 1993, I published my book: Risktaker, Caretaker, Surgeon, Undertaker- the four faces of strategic leadership, because it was clear to me, based on my corporate and consulting experience that there was "no leader for all seasons". The book describes how leaders and their teams must relate to the organizations position on the life cycle and with the "strategic differentiator and drivers of the business.

The book was moderately successful because this was the period of unique growth and everyone wanted to believe that it was going to continue. The glorified leader was the innovator, risktaker who created new businesses and everyone prospered.

But times have changed dramatically, and now we are in the period of the UNDERTAKER leader when it is fashionable to liquidate organizations, merge them with others or just ask to be saved. This is what is happening in all of the key industries, but most prevalent in financial services. Major organizations, like Lehman.. no longer exist... Merrill is now part of Bank of America, AIG is a ward of the Federal government and ONCE MIGHTY BIG THREE are eating humble pie.

The key is to step back and refocus and recognize that organizations are PORTFOLIOS of growing, maintaining and harvesting organizations and each requires a unique type of leader.
Some need RISKTAKERS...missionaries who will create new organizations... CARETAKERS who will be able to manage and selectively grow, SURGEONs who are able to carve up the organization and focus on the winners and discard the losers and UNDERTAKERS who know when to call to merge or liquidate...

If you want learn more ...purchase my book RISKTAKER, CARETAKER, SURGEON, UNDERTAKER- the four faces on strategic leadership...on www.strategyleader.com

I can assure it is worth reading and using the concepts...

Bill Rothschild, CEO of Rothschild Strategies Unlimited LLC.. the organization that helps to integrate people and strategy.

The GREAT AMERICAN AUTOMOBILE HARVEST

It is amazing to watch the three automobile CEO's sit before Congress and ask for the Federal Government to save them. The American Automobile companies are a classic case of a HARVEST strategy, which in simple terms they have sold off market share over several decades, reaped handsome profits and then collapsed.

Each of these three companies were once led by visionaries and strong leaders. Alfred Sloane was the leader in market segmentation and providing unique brands and autos for each segment. He led the idea of market migration...the first buyers purchased a Chevy, then migrated upward to the ultimate a CADDY.

Henry Ford was the low cost, manufacturing genius, introducing the assembly line and offering one color BLACK.

Chrysler focused on product innovation and differentiation and introduced many new ideas and concepts.

Each of the companies prospered until the early 1960s, when they all assumed that there would be FEW automobile companies and they could compete against themselves and ignore the new comers, Japanese automakers. In fact they allowed the Japanese to take control of the small, economy car segment because its margins were lower than the big, gas guzzler segments.

They all moved to a manufacturing strategy and ignored the markets and the trends. They sacrificed quality and innovation for lower costs and then gave away the shop to the UNION, providing unreasonable benefits and increasing salaries. They sold the same cars under different brands and downgraded the quality of the high end, prestige brands, like Cadillac, Lincoln and Chrysler.

All of these companies instituted "cookie cutter" manpower and educational systems, so that all of the candidates looked alike and were "automobile" men. Further all of them divested their non automobile subsidiaries to focus on just automobiles. For instance, General Motors sold its Frigidaire appliance business, its ALLISON division, its locomotive business and so on. All of which were market leaders, but didn't fit the automobile mentality.

The reason that it has taken decades to put these companies on the edge of collapse is that they had very large share and were so big. It takes time to harvest giants, but ultimately they meet the same fate of smaller companies, they go out of business. This is the point they are today.

I have mixed emotions about whether to save them or not, but I do think that all of the current leaders, the company's Board of Directors SHOULD RESIGN now... but the problem is that because of their COOKIE CUTTER development systems, it is unlikely they have replacements that can do the surgery and competitive/ market based strategic thinking and development requried and unfortunately it has been demonstrated that bring in outsiders doesn't work either. Further it is difficult to do creative strategic thinking when you are in the EMERGENCY room and just trying to stay alive. Strategy MUST Be DONE when you are healthy and have options and not when you are trying to survive.

Sloane, Ford and Chrysler must be turning over in their graves.

Bill Rothschild, author of the book that shows why GE is different and hopefully will avoid the same mistakes as the Automobile companies...THE SECRET TO GE's SUCCESS and PUTTING IT ALL TOGETHER - a guide to strategic thinking and decision making.