Jeff Immelt, who stepped down as GE chief earlier this month, penned a piece in Harvard Business Review reflecting on his 16-year tenure at the company. From succession planning to divestitures to GE’s P/E ratio, Immelt lays bare the challenge of leading an industrial well into its second century, particularly in examining GE’s digital journey. An excerpt:
You can’t regard a transformation as an experiment. We’ve approached digital very differently from the way other industrial and consumer products companies have. Most say, “We’ll take an equity stake in a digital start-up, and that is our strategy.” To my mind, that’s dabbling. I wanted to get enough scale fast enough to make it meaningful. My view was that GE had as good a chance as anybody at winning in the industrial internet, because we were not starting from scratch: We had a $240 billion installed base of service contracts, a huge order backlog, and the ability to offer financing.
When it’s based on the blockchain, per Andreessen Horowitz partner Chris Dixon. Picking up Clay Christensen’s question from The Innovator’s Dilemma, Dixon makes a case for the technology’s significance in this short video:
“People say “Oh, it’s a silly occurrence and used by nerds.” What they’re underestimating is that there are probably on the order of 10,000 super-excellent software developers who are building things around Bitcoin. You could argue that Bitcoin is the largest software development organization in the world – and it’s moving very, very rapidly.
Racing forward alongside is Ethereum, a decentralized asset representation platform and cryptocurrency that Wired calls “Bitcoin’s hip, experimental cousin”:
The price of Ether, the coin underlying Ethereum, has skyrocketed by a factor of 20 over the last six months. But the ensuing get-rich-quick mania has led many to overlook Ethereum’s more lasting significance. More than a new type of digital currency, it is a new type of distributed computer – one that no one controls but inside which anyone can see. On this computer, a new generation of applications, called “DApps,” is being born.
With the NYSE offering little guidance for board evaluations, companies conduct their own assessments, with varying success, note Taylor Griffin and Courtney Hamilton in Directors & Boards. Key findings from a recent survey by Stanford University’s Rock Center for Corporate Governance and The Miles Group:
-Only one-third (36%) of board members surveyed believe their company does a very good job of accurately assessing the performance of individual directors.
-Almost half (46%) believe their board tolerates dissent.
-Nearly three quarters of directors (74%) agree that board members allow personal or past experience to dominate their perspective.
-And, perhaps most significant, the typical director believes that at least one fellow director should be removed from the board because this individual is not effective.
With 731 million people online, China has a distinct advantage in the AI race, says Qi Lu, formerly Microsoft’s search and Office head and now COO of Internet conglomerate Baidu – though he also identifies platform architecture as critical for the first big company winners. From an interview in Wired:
The phone, in my view, is going to be, for the foreseeable future, a finger-first, mobile-first device. You need an AI-first device to solidify an emerging base of ecosystems. It’s become so much clearer, living in China, what AI-first really means. … It has to be voice or image recognition, facial recognition, in the first interactions. You can use a screen or touch, but that’s secondary.
The recent closure of two coding bootcamps has provoked questions about the viability of the online learning industry, particularly for self-directed learning. Jake Schwartz, founder and CEO of global education company General Assembly, clarified how his company is positioned to respond to fundamental shifts in the talent landscape. From Forbes:
The starting point is always employer demand. From there, we investigate the feasibility of attracting the teaching talent needed to meet that demand. At the same time, we explore the consumer demand – do people actually want the jobs these employers are offering? If those three factors align, we evaluate how and whether we can develop really high quality courses and curriculum.
Companies led by female CEOs and those with high levels of institutional investors are more likely to be targeted by activists, per two new studies that examined over 1,000 activism events, including overtures by Carl Icahn at Xerox, Nelson Peltz at DuPont, and Bill Ackman at Valeant. On why activists might move on female-led firms:
The preference could be driven by the difference in managerial styles between men and women, arguing that female CEOs were more likely to communicate and cooperate with activist hedge funds. … The authors said that female CEOs experienced higher pay cuts and were more likely to be ousted than male counterparts as the result of activist campaigns.
For mature companies looking to breathe new life into their organizations, partnering with startups can offer a focused path to innovation. We sat down recently with Jim Stengel, former Global Marketing Officer of Procter & Gamble, to discuss his latest research on how businesses can cultivate entrepreneurship and his forthcoming book, Unleashing The Innovators. One takeaway from our interview:
What happens in legacy companies – and I would not exclude my alma mater, P&G, in this – is people get distracted from the product because they get too obsessed with their career, promotion, compensation, and title. Most of this is irrelevant at a startup company. Employees there are interested in making a difference and creating something awesome. Established companies must fall back in love with their product and service.