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There’s a new book out this week on the collapse of General Electric by two Wall Street Journal reporters, Thomas Gryta and Ted Mann. (Their Amazon page says the book is already the “#1 Best Seller in Industrial Manufacturing” –which made me wonder what #2 is!) The Journal included an excerpt from the story here this weekend, that focused on the company’s ill-fated effort to champion the “industrial internet” through GE Digital and its Predix software.
I interviewed then-CEO Jeff Immelt about the effort back in 2016, and found, as always, his articulation of the strategy to be compelling. He had lived through the disruption of the media business–GE then owned NBC Universal–by Facebook, Google, Apple, Amazon, and he didn’t want the same thing to happen to his industrial businesses. “If you think about it, 15%, almost 20%, of the S&P 500 are consumer Internet companies, and the existing consumer companies in those areas–media, retail, consumer banking–got none of that,” he said. “I was able to see that. And I passionately believe that if you are an industrial company, you can’t allow that to happen.”
But articulating a good idea and turning it into a good business are different things. On the second point, GE seems to have failed–mastering the marketing more than the software and money making. (Although my favorite piece of trivia from the book excerpt was a marketing fail: Top GE executives couldn’t agree at launch whether to pronounce the new product “Preed-dix” or “predicts.”)
Immelt proclaimed in 2015 that GE would be a “top 10 software company by 2020.” But that goal has been abandoned by his successors. Today, the company focuses the digital business on its own product lines, and no longer discloses financial results. CEO Larry Culp said earlier this year the digital business “was getting close to break-even.”
I haven’t read the book yet. But if you are looking for a magazine-length take on GE’s fall, I still think Geoffrey Colvin’s 2018 piece– “What the Hell Happened at GE?”–is the best. You can read it here.
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