Winning - Jack Welch [72]
And in 1992, we had a $50 million business making small jet engines. It was practically invisible compared to the multibillion-dollar business we had in big commercial engines.
Neither PET nor Small Jet Engines got much in terms of time, attention, or investment from their divisions or headquarters, and they languished. Luckily for Small Jet Engines, it had a VP named Dennis Williams, who believed in the business and somehow managed to keep it alive. But PET came into our gun sights only when we tried to sell it—and no one would buy.
Market conditions eventually brought us to our senses, and only then did we begin to invest heavily in both businesses. Today, they are doing well. PET is a $400 million business. Small Jet Engines has gotten an enormous boost from the growth in commuter airlines. Its sales are about $1.4 billion, and it is the fastest-growing part of GE’s commercial engine business.
We got resource allocation a lot closer to right with China.
Back in the early ’90s, Asia for GE was mainly about Japan, where we had revenues of about $2 billion. But we knew that Asia was a lot more than Japan and that we had to get into China.
So we took one of our best leaders and put him in charge. It was Jim McNerney, whom I mentioned in the previous chapter on budgeting.
At the time, Jim was the CEO of GE’s $4 billion industrial systems business in Plainville, Connecticut. He was, in every way, a big hitter. He had twenty-five thousand people reporting to him in one of our mainstay businesses, a comfortable office, and a well-trained, hand-picked staff. Most people in the company believed that Jim had a very promising future with GE and that his next step would be vice-chairman, at the very least.
Instead, we put him in an office in Hong Kong with an assistant and a few employees.
The impact was immediate. Jim was like the Pied Piper. As soon as headquarters raised the bar and sent someone to China who was widely acknowledged to be a star, all of our businesses started sending their best people too.
Jim and his team launched GE businesses in China into the $4 billion operation they are today. He has since gone on to do a great job as CEO of 3M.
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GUIDELINE TWO: Make an exaggerated commotion about the potential and importance of the new venture.
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When we sent Jim McNerney to Asia, we didn’t just send out a press release and let the news go at that. Instead, we made a hoopla about the event. I ranted and raved about Jim’s appointment at every senior management meeting, and when I was in the field visiting businesses, I made sure everyone got the message that GE was going aggressively into China and we had to send our best. Jim was the perfect role model for the point I was trying to convey.
In the same way, when NBC launched the cable channels MSNBC and CNBC, I gave them an inordinate amount of attention in every public setting I could find. At NBC business reviews, for instance, I would focus much more intently on these cable presentations than on NBC’s West Coast team promoting their new network comedy shows. I didn’t ask questions about the stars appearing in NBC’s next promising big hit. Instead, to demonstrate my support, I would ask the executives of MSNBC and CNBC—neither one then posting any revenues to speak of—about subscriber growth and content.*
Start-ups need cheerleading—constant and loud.
Cheerleading, however, isn’t just about senior managers making noise. It’s also about giving new ventures sponsorship. This may mean breaking old bureaucratic norms, but with a new venture, organizational visibility is critical. For instance, new ventures should report at least two levels higher than sales would justify. If possible, they should report directly to the CEO. At the very least, they should always have a special place on the CEO’s priority list.
Admittedly, there is one big problem with making a huge scene about a new venture.
How dumb you look if it fails.
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