Bob's Gutsy Leadership Blog

How to Escape the Status Quo

In the past two years, General Electric has done a good job of facing the fact that its business model of the past several years had run out of gas and that it needed to break out of the status quo and prepare for the future.

Over the decades, GE has received a lot of praise for evolving the company. It has often relied on its Leadership, Innovation and Growth (LIG) exercise. This formalized planning process has been written about often in publications like the Harvard Business Review. The results of its recent planning efforts are impressive; it has spun off various businesses such as GE Capital and GE Appliances, and has re-organized so that now GE is focused on the traditional core industrial strengths of the company; jet engines, power generation, etc. In launching this effort, it did help that GE felt the threat of being classified as “too important to fail” by the U.S. Government because of GE Capital, and thus facing suffocating regulations in the future.

Stepping back, most companies will claim that they have no need for any kind of special effort to redesign for the future, given they have an annual strategic planning exercise.   Unfortunately, that exercise usually focuses of the existing businesses over the next three years. Much of the effort consists of simply updating a bunch of standard charts, along with a summary of the competitive landscape. It does not ask the hard question of what specifically should we do to generate a significant growth in the future.

After reviewing what has been written about GE’s transition and about a number of other companies that have significantly restructured themselves for future success, here are the steps that I believe are necessary in any effort to escape the status quo:

1.) Take the Time – In the case of GE, their classic LIG exercise is 4 days. Making such a time commitment is key if you are really are serious about achieving success in the future.

2.) Put All Options On the Table – The effort should include outside perspectives on the markets you are in or are considering, as well as key technology and consumers trends. Consideration should also be given to closing down what is not working, narrowing your focus by spinning off things that don’t fit strategically, reorganizing, putting your top people in the key jobs , etc.

3.) Require an Action Plan – The effort needs to conclude with an action plan that all believe can lead to significant progress. If the group can’t achieve this, a follow-up to the session needs to be scheduled to arrive at such a plan.

The fact is if you do things the same way in the future, you will get about the same results. Strong leaders know that to breakout and gain the initiative, carefully planning is required.

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