Despite the pervasiveness of the corona virus, the media does feature some stories that are not primarily driven by the pandemic. An example is a recent Wall Street Journal article about what went wrong with GE’s bold vision “to remake itself as a software powerhouse’. The article is titled “The Dimming of GE’s Bold Digital Dreams’ and it was written by Ted Mann and Thomas Gryta in the Wall Street Journal’s July 18-19, 2020 issue.
The article states, “The CEO wanted GE to be known around the world for more than just jet engines and MRI machines, power plants and nuclear reactors. Deep costs, employee confusion and delusions about what it would take to reposition the company for a digital future would make it more difficult to turn Mr. Immelt’s (GE’s CEO) vision into a profitable business, according to former board directors, GE executives and employees.”
Based upon my 25+ years researching business success and failure patterns, delusions about what it takes to reposition a company are not uncommon. Companies often pursue visions that have characteristics indicating that the vision would likely not work. These companies need to do a better job assessing how well their planned visions are a fit for their business.
Companies must remember that merely identifying a trend and building a vision around that trend is not enough for success. In a newsletter of mine back in 2017, I wrote about how this might apply to GEs digital aspirations. It appears that GE did correctly identify a trend. The Wall Street Journal article says, “To Mr. Immelt, the future of industrial companies was in software and hardcore computing. Even now that vision is widely considered to be correct.” But, GE’s pursuit of it was ineffective. My 2017 newsletter pointed out red flags that could be a problem for GE’s digital vision.
Companies should learn from GE. They shouldn’t merely create visions around trends. They must identify a vision that fits well. They must avoid pumping vast sums of money into dreams that are unlikely to materialize as a successful business. There are ways to evaluate the possibilities a company might be considering. A well thought out strategy that fits the company can bring success. But, wishful thinking about a significant trend that is pursued in ill-fitting ways generally won’t do well. So, heed the lesson of GE, and go for a vision that actually can work well for your company.
If you’d like help with evaluating possible visions for your company, just contact us.