Deep Domain Expertise at GE


(B) In an interview in the June edition of the Harvard Business Review, Jeffrey Immelt, Chairman, and CEO of GE describes how he intends to grow organically GE two to three times faster than the world GDP.

I guess that the obvious industry growth opportunities for Mr. Immelt to increase GE’s stock price are much lower than it was the case for his famous predecessor Jack Welch.

Mr. Immelt’s execution plan is based on a six-step process: growth leaders that focus on customers and globalization. And, great technology that focuses on innovation and commercial excellence.

This six-step process did not strike me as an outstanding execution plan. But it did remind me of the McKinsey 7-S Framework from Tom Peters and Robert Waterman in the first business book that I ever read: “In Search of Excellence”.

However, what is very interesting in the article and worth reading it is how much Mr. Immelt stressed the fact that outstanding growth leaders and present successful GE leaders have “deep domain expertise”:

“the most successful parts of GE are places where leaders have stayed in place a long time. Think of Brian Rowe’s long tenure in aircraft engines. Four or five big decisions, he made -relying on his deep knowledge of that business -won us maybe as many as 50 years of industry leadership. The same point applies to GE Capital. The places where we’ve churned people, like reinsurance, are where you will find we’ve failed.”

So let me summarize that: the benefit of keeping people in position longer is “deep domain expertise”. And, what does “deep domain expertise” brings to an organization: growth and as a consequence (but not mentioned by Mr. Immelt in the article) increase in shareholder’ value. Right?

Obviously, Mr. Immelt’s remarks about deep domain expertise for leaders shall be applied to any manager and any contributor to a business organization.

In the high tech industry, very few leaders have been able to perform without “deep domain expertise”. I know only of two exceptions: Lou Gerstner at IBM and presently Mark Hurd at HP. Most successful public high tech companies have CEOs with deep domain expertise. And, that obviously even more true when you analyze the leadership of successful start-ups.

So why board members are changing their CEOs so often and why CEOs are changing their employees so often in today’s business world when acquiring and developing deep domain expertise should be so critical for the company shareholders?

I let you answer that question with your own experience.

Copyright © 2005-2006 by Serge-Paul Carrasco. All rights reserved.
Contact Us: asvinsider at gmail dot com.

Categories: Leadership