Last week’s front cover article of BusinessWeek had the headline “Can GE Still Manage?” I can’t imagine any magazine subscriber not having her attention grabbed by that copy. Cutting to the chase, I considered it a sensationalist way to keep readers turning their pages. But is the headline accurate, even as a leading question?I don’t completely fault the editorial staff. Blue-chip institutions across automotive and financial services– long known for unquestionable quality and success– are mired in crises and cover-ups. So every for-profit organization is seen through an increasingly scrutinizing and cynical lens. With respect to GE– to quote the article– we have seen a “hellish decade that cut GE’s value in half.” Any stakeholder of the company could be unnerved.
In reading the article, I kept waiting for objective comparisons to companies of GE’s size and scope across the same time period. Jack Welch continuously says measurement is in part about relativity– where you stand vis a vis others. BusinessWeek didn’t do that, at least in this article. So we did. Our research was quick, so feel free to debate the methodology. But the results are interesting.
One decade ago– in the year 2000, the last full calendar year before Jeff Immelt became CEO– GE stood at #5 on the Fortune 500, posting more in annual profit than any other company on that list. #1 that year was General Motors. #4 was Ford Motor Company. Numbers 7 and 8? Citigroup and AT&T respectively. Numbers 16, 17 and 18 were Sears Roebuck, AIG, and Enron.
In the most recent posting of Fortune 500 companies, GE (the only company mentioned in this blog with the same CEO since 2001) stands at #4, posting double-digit profit gains vs. 10 years ago, though less profit than one oil company and Wal-Mart. General Motors is now #15 on the Fortune 500 with no earnings. The company that was AT&T ten years ago no longer exists. Citigroup at #12 in 2010 lost $1.6 billion on $108 billion in sales. Sears Roebuck, AIG and Enron can be discussed in another blog (though Enron the Broadway Musical is glowing with preopening buzz.)
The decade from hell has decimated many other companies that were once at or close to GE’s size. Or perhaps, the mistakes in management at Citigroup, General Motors, Sears Roebuck, AIG and Enron The Broadway Musical caused these companies to decimate during the decade from hell. I am exposed only to information publicly available about GE, therefore far from an expert. Here’s what information is available. Its leadership position from a revenue standpoint has been relatively stable across manufacturing, consumer goods and financial services. GE brings infrastructural innovation to developing countries like no other enterprise in the world. Annual volume of ecomagination products outpaces 370 companies in the Fortune 500 in total sales. During this decade from hell– when no company was too big to fail– GE would have long unraveled without immensely talented managers guided by a continuously improving work ethic. One can easily lose sight of this without the very comparison that makes for objective measurement and journalism. And when BusinessWeek publishes articles headlined “Can GE Still Manage?,” that’s what readers should expect.