Learning from GE’s Stumbles

HBR IdeaCast

Harvard Business Review

Leadership, Entrepreneurship, Communication, Marketing, Business, Business/management, Management, Business/marketing, Business/entrepreneurship, Innovation, Hbr, Strategy, Economics, Finance, Teams, Harvard

4.4 • 1.9K Ratings

🗓️ 31 July 2018

⏱️ 17 minutes

🔗️ Recording | iTunes | RSS

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Summary

Roger Martin, a professor at the University of Toronto’s Rotman School of Management, offers two main reasons General Electric has lost its competitiveness. GE’s stock has been removed from the Dow Jones Industrial Average. Martin blames pressures from activist investors as well as a short-sighted mergers and acquisitions strategy. He’s the author of “GE’s Fall Has Been Accelerated by Two Problems. Most Other Big Companies Face Them, Too.”

Transcript

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0:00.0	When leadership advice feels like buzzwords and platitudes, it's time to get real.
0:05.9	HPR's podcast Coaching Real Leaders brings you behind closed doors as Muriel Wilkins coaches anonymous
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0:18.3	wherever you get your podcasts. Welcome to the HBR Ideacast from Harvard Business Review. I'm Sarah Green-Per-Michael. In June, General Electric fell out of the Dow Jones Industrial Average, a stock index of which it had been one of the founding members.
0:54.5	It caught some people by surprise, including me, because GE has long been held up as an example
1:00.1	of a well-managed company. So what's responsible for this and what can we learn from it?
1:05.2	In an analysis for HBR.org our guest today Roger Martin writes that GE was
1:11.2	hurt by two problems a lot of companies face.
1:14.0	Clueless activists investors and M&A folks masquerading as strategists.
1:20.0	When you're using M&A to acquire growth that you can't do yourself.
1:25.8	You're in 100% get mode.
1:29.9	I will get growth from that company.
1:32.7	Oh, yay, that's great, as opposed to here's what I can do
1:37.1	to make it more valuable.
1:39.1	Roger Martin is the former dean of the Rotman Business School
1:41.9	at the University of Toronto, where he now directs the Martin Prosperity Institute.
1:46.0	Roger, thank you for talking with us.
1:48.0	I'm always delighted to talk to you, sir. In a way it seems like GE dropping out of the Dow is kind of the exclamation point at the end of a sentence that began during the Great Recession.
2:05.4	They just never seemed like they were able to fully recover from that.
2:09.1	Why?
	...

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