John Gapper’s recent essay in the Financial Times entitled “General Electric has too much imagination” is a must-read for anybody working in tech communications.
I took away three core lessons:
First, shareholder value is an outdated measure of business performance. The company was founded by the inventor of the light bulb, but had diversified into a variety of businesses in hopes of meeting the earnings expectations of its investors. Consumer finance was a big one (among many others that included broadcasting), and it evidenced a focus on a set of financial metrics that may not have evidenced the overall abilities or health of the company.
Gapper notes that it spent $1.8 billion since 2000 on consultants that helped it execute “hundreds of deals,” which helped obfuscate the actual performance of its units, such as the aforementioned finance business. Delivering these actions promoted exciting new technologies, but didn’t provide accurate metrics for valuing the company’s ability to operationalize them.
Second, it added fuel to the fire by promoting an image that far exceeded its reality.
The company perfected the hype thing, not just with symbolic financial deals, but by coming up with great marketing themes (“We bring good things to life” and, more recently, “Imagination at Work”). It generated endless videos and white papers about how it was leading the digitialization of every industry known to mankind, and claimed to have invented a platform on which the data of the world’s economy would reside (and branded it Predix). Its annual marketing spend was the envy of competitors.
It was a bunch of rubbish.
Sure, branding is supposed to be inspiring and memorable, but it must be rooted in facts and supported by tangible work. While its marketers had a field day promising a glorious future, GE’s businesses did very little to operationalize the present. Its former CMO has just published a how-to book for others who might want to emulate it, though it should be a cautionary tale to any communicator…perhaps entitled Reality Abides.
Third, conglomerates need more than systems or hype to bind them together.
Every company needs a reason to exist.
At my agency, we often challenge clients to contemplate a stark, somewhat existential question: What would happen to the world if your company didn’t exist? Of course, certain products wouldn’t be on the market, and lots of folks wouldn’t have jobs making them, but couldn’t another company fill the void with similar stuff and salaries?
We want to discover what company attributes are truly different and, most importantly, necessary, and from which build our communications plans. Marketers obfuscate these points with terms like mission, values, and purpose, but what matters isn’t what corporate leadership claims it cares about — GE went to town with that stuff — but, rather, the real things a company does that others either can’t, or won’t.
So Google or Amazon aren’t valued because of the creative perfection of their marketing, but because they have plans to apply data across their functions that no other companies could hope to duplicate, at least in terms of scope or depth. Apple is valued not for its efficient supply chain, but because it has a design sensibility (and rigor) that no other tech company on the planet seems capable of delivering.
GE’s challenge is to find that necessity for its existence, and help the outside world understand how it’s translating it into everyday operations and ongoing iterative improvements.
As Gapper notes in his essay, it must first overcome its penchant for an over-active imagination.