THE MODERN GENERAL Electric was the house that Jack built, but Jeff Immelt had shown that he planned to do some remodeling. He moved to put his mark on the company, even if only superficially at first.
He painted the corporate jets, a fleet that included a 737 that shuttled GE executives all around the world. Immelt, as GE’s CEO, was required by the board to use only the company’s planes and barred from flying commercial. The reasoning was to ensure his safety—an excuse also used at other big companies—but protests about such “rules” were rarely heard.
The painting of the jets by the new leader was perplexing to those at the top of the company. Although the painting project wasn’t expensive enough to move the needle at the massive company, it did cost a lot of money. Furthermore, the jets didn’t need to be painted and the reasoning for the move was unclear. It was another lesson about Jeff Immelt. If he wanted something, he got it and it was best not to question too much.
General Electric’s portfolio continued to churn as the company bought and sold pieces of its business lines. Immelt, aware of the concerns of Wall Street and eager to put a more personal stamp on the company, had come up with a new mantra: organic growth.
That was just Wall Street jargon for growing the businesses you have, rather than growing by buying other companies—the inorganic approach that some investors like Bill Gross accused Welch and Immelt of pursuing. Immelt was eager to prove that he didn’t need acquisitions to produce strong profits—that he could supercharge GE by stirring up its existing units to produce more revenue, which would fall as profit right to the bottom line. It sounded good to analysts, though Immelt’s plan would work only if he and his team could find ways to bring in new revenue without much additional spending.
The headwinds of Immelt’s first years hadn’t vanished—the economy remained sluggish, investor scrutiny was still harsh, and stock returns continued to be lackluster—but the promise of steady organic sales growth was a clean path he could promise to take in leading GE into the new century. Taking that path would also be a good reason to focus on one of Immelt’s favorite parts of the business: marketing, a facet of the company that he felt could be its differentiating power.
Immelt believed deeply in the power and value of GE’s brand. Indeed, the force of its broad recognition and global approach alone, Immelt believed, would help him grow the company’s sales. But he also wanted to market the company more aggressively to the media and the public, to show society how impressive the company and its products really were. And he had just the right executive in mind.
Beth Comstock had spent her career in media relations, rising through NBC to the corporate parent, when Immelt tapped her to be GE’s chief marketing officer in 2003. The company hadn’t had such a position for two decades, but Immelt believed that Comstock, despite her lack of experience in marketing, was a “change-maker” who could reshape the image GE presented to the public and help him drive growth in the company’s sales. Immelt was “raising our game” in marketing, he said. Comstock dove into the role, reading marketing textbooks to learn the basics and networking with other CMOs.
In choosing Comstock, Immelt, like Welch, was going with his gut. He wanted more than just an aggressive new marketing executive. Immelt’s stated mission to Comstock was to “resurrect marketing at this company.” He wanted to put his own stamp on the GE brand itself. The company said that the brand awareness it derived from the stalwart Monogram logo was worth billions. But in spite of its immense value, Immelt felt that the GE brand needed refreshing: a modernization that would better reflect the twenty-first-century image he was trying to put forward.
The new boss thus set his sights on one of the most iconic elements of the brand: the advertising tagline that GE had used since 1979, familiar to millions of Americans who knew the jingle from GE TV commercials that hawked everything from lightbulbs to clock radios: “We Bring Good Things to Life.”
Immelt wanted something newer, breezier, and evocative of the technological innovation he planned to emphasize as GE’s core offering. It was lost on no one that his desire for a new tagline would also sever the company more completely from the Welch era, and all the lingering comparisons that arose from it.
Immelt turned to BBDO, GE’s go-to advertising agency for decades. The request was no small undertaking. The old tagline and jingle were still inextricably linked to GE in the public mind. The advertising tune itself had been composed by a veteran jingle writer named David Lucas, whose compositions were heard in ads for huge corporations every day. (Lucas’s more eye-opening claim to fame: moonlighting as a rock producer. He claims to have been the one playing the cowbell on Blue Öyster Cult’s “Don’t Fear the Reaper.”) Even if Immelt felt that Welch had neglected his marketing responsibilities, the company had still plowed more than $200 million into ad campaigns in Welch’s final year, an investment in the trademark that Immelt now wanted to wipe away.
BBDO came back to Immelt with a surprising suggestion: leave the slogan alone. GE would be reckless to make a change, the advertising staff said. GE’s brand was the strongest in the market other than Coca-Cola’s.
But Immelt wasn’t having it. It wasn’t an evolution that he wanted, but a revolution. If BBDO wouldn’t draw up a better tagline, he retorted, “then I’ll change ad agencies.”
BBDO followed orders and went back to the drawing board, returning with a phrase that perfectly captured what Immelt wanted for his company’s new look—the sense of an organization that could make happen whatever its customers dreamed up: “GE: Imagination at Work.”
Immelt loved it. The new tagline summarized the innovation that would come out of GE. It conveyed new ideas and unlimited potential in the brave new world driven by high technology. GE was no longer about lightbulbs, turbines, or engines—it was about dreaming up the next era of world-changing inventions.
In fact, Immelt wasn’t making quite the break from GE’s past that he liked to think he was. Welch had once told shareholders that the company’s talk of setting “stretch goals” for its performance “essentially means using dreams to set business targets—with no real idea of how to get there.” Like the guy he had chosen to succeed him, Welch had believed that an aspirational goal could always be met by a sufficiently motivated and determined worker—or if not by him, then by the colleague who wanted to take his place. Still, the new tagline represented Immelt’s effort to declare his transformation—however vaguely defined—of the massive company he now led.
“Imagination at work is not a tagline,” Immelt declared. “It’s a reason for being.”
The overhaul kept going. GE tweaked its beloved meatball logo and offered the Monogram on a solid field of baby blue. Marketing consultants from Wolff Olins squeezed the company’s 3,500 business offerings into eleven market groups so that customers could more easily understand what this new iteration of GE made and sold.
GE even commissioned its own typeface, to be used in everything from advertising copy to press releases. The company said that the font was “conceived from” the rounded letters of the GE Monogram. GE named its new typeface “Inspira.” (Never prone to underselling, the company described the font this way: “When introduced, the rounded and flowing forms of Inspira caused some to question its open nature. Others felt a breath of freshness and inspiration.”)
New slogan in place, an ad campaign followed. BBDO’s campaign mashed up images of GE’s past and present, making an argument for the company’s technology as a force shaping the world. Hard-rowing Vikings surpassed by a sailboat highlighted the ability of GE’s wind turbines to harness the wind. At Kitty Hawk, the Wright Brothers’ flying machine was now powered by a GE jet engine strapped on top of it. Edison, naturally, popped up in an ad depicting electronic health records that whisked information to doctors in seconds.
Immelt felt that the rebranding effort was a home run, though some in the company grumbled. Was the new boss marking his territory? Was all this branding a solution in search of a problem? Were the splashy new ads superficial? And what did the tagline really mean, especially compared to the old slogan? Everybody knew what bringing good things to life meant.
The eye-rolling was especially pronounced at GE Capital. Whimsical advertisements and talk of imagination were all well and good for Super Bowl commercials. But GE Capital dealt with hard numbers. Given the wider scrutiny of accounting and transparency, including at GE, some at Capital thought that the new slogan was insulting, if not risky. GE Capital saw itself as an elite finance operation—better than the hidebound bankers of Wall Street—and the sturdy scaffolding that was holding up the results of the lumbering conglomerate. As they saw it, there was no imagination in their work. Nor was any needed.
Immelt dismissed such concerns. This was the new GE, he felt. There would be those who couldn’t keep up with his changes, but those who did were his fellow visionaries. They understood that the company’s story of itself was the heart of its strategy. Selling products wasn’t enough. The company was doing more than making widgets—it was making the future. And Immelt, his good cheer notwithstanding, was not interested in hearing his judgment questioned.
“My job is to make the company perform,” Immelt told a newspaper reporter, “and my job is to make sure that nobody defines this company other than me.”
The doubters soon realized that “Imagination at Work” wasn’t just advertising. Immelt was intent on putting marketing at the heart of GE strategy to dictate not just how the company sold the things it made but what it made in the first place. Much as Welch had before them, Comstock and Immelt hatched new jargon to express the process they wanted the company to follow. GE business leaders would now convene to come up with “Imagination Breakthroughs”—that is, ideas about products the company should design and sell.
Immelt wanted division heads to generate imaginative new product and service concepts, which in turn would generate the new organic revenue on which his vision depended. It was a tall order: a handful of product ideas that would each pull in $100 million in new sales for each business. More important, Immelt wanted these “breakthrough” sessions to be led by each unit’s marketing department—to have the division that usually dictated advertising and branding stepping into the role that had been the province of product engineers. Immelt’s inspiration for the directive was an article he read about a smaller industrial conglomerate called Danaher Corporation that had formed an internal incubator to develop new ideas that could drive revenues and profits. Its CEO was a young whiz named Larry Culp who, at age thirty-seven, was even younger than Immelt had been when he took the reins.
The marketing focus was clear across the company. Immelt established the Commercial Council, an intracompany panel composed of “the best sales and marketing people in the company,” and served as the chair himself. “That turned out to be a big deal,” Immelt told the Harvard Business Review. “The council was designed to share best practices and plan growth programs, but more fundamentally, it began to develop this idea of growth as a process.”
The marketing people were now charged with running GE’s growth strategy. This new focus brought a lot of new spending and a lot of advertising. Everything the company did now had to have a story behind it, and all decisions and strategies had to fit into a broader story—or else they made no sense to the new team at the top.
Story was strategy, Comstock would argue.
Spinning that story cost a lot of money. As Immelt changed the master narrative of General Electric for his audience, intent on his strategy for growing top-line sales and reaping profits by keeping costs low, executing his strategy was becoming increasingly expensive. The GE corporate umbrella—the layer of the company that oversaw the individual businesses—began to spread, and it would continue to expand, in size, cost, and complexity, throughout the Immelt era. For the CEO, the true benefit of the conglomerate lay in having all its disparate pieces gathered together under a strong organization to oversee it all.
They called it the “Borg”—the unified research, sales, information technology, and back office departments housed within the corporate hub of GE. Borrowed from Star Trek, the term referred to an alien race that assimilates others into its hive mind of collective intelligence, while erasing individuality.
Seizing on a Welch-era concept, Immelt called on GE workers to pursue “boundaryless sales”: selling not just particular products from their own GE business unit but the entire catalog. Taken even further, you were now selling the entire product portfolio. An executive selling a locomotive in Delhi was in perfect position to nose around for leads about prospective buyers of X-ray machines or electrical switchgear or asset-backed commercial loans.
All those salespeople leaned back on the Borg, which funded their jobs as well as the research and production costs of the heavy industrial goods they were selling. The idea was to allow more than half a dozen industrial companies to lean on the same source of financing and an overlapping pool of talented researchers and patents in order to achieve the ultimate sales synergy. It was a strategy perfectly suited, Immelt felt, for a world in which the battle would be fought for market share in the burgeoning frontiers of the Middle East, China, Africa, and South America.
The challenge would be ensuring that profit margins on sales exceeded the growing costs of the Borg—all those layers of marketing, research, finance, and other supports for the industrial operations. But Immelt believed that the promise of future sales would offset the cost of swelling the corporate hub.
Immelt felt that he was truly innovating, forging a new unifying vision that justified the conglomerate structure so out of favor elsewhere. Danaher, for example, used a very thin umbrella, only a few hundred people, to oversee its portfolio companies. Berkshire Hathaway, the conglomerate run by the billionaire investor Warren Buffett, was even leaner, with just a handful of people at the top. All other functions were put into the divisions so that they could manage costs appropriately and then be held accountable for keeping them under control.
By contrast, GE’s corporate structure not only could prevent managers from developing the skills they needed to run an independent business, but also made it impossible to get an accurate picture of a division’s performance or health. Measuring profit without including all the underlying costs distorted the performance of the businesses and their management. It was great for painting a picture of success to investors. Less clear was whether the thickening of the corporate layer was a solid strategy for the long term. Immelt was effectively undoing the aggressive cuts that Jack Welch had inflicted on the GE bureaucracy. Welch’s dreaded layers were now returning under another name.
One more element of Jeff Immelt’s vision would now dictate GE’s strategy. Tying the company’s fate to growing top-line revenues required finding markets where sales were growing. For power equipment, locomotives, jet engines, and hospital machinery, the critical markets were not likely to be found in Europe or the United States, where GE had historically focused. The company’s footprints had been laid around the world for decades, but they were mostly just that: footprints. Immelt’s notion of a wave of sales growth that would alter the makeup of GE’s earnings for good depended on finding major new sources of sales outside the West. In short, GE would have to go to China.
GE wasn’t the first company to boldly move into international markets, but it faced unique challenges in doing so. Tapping international markets wasn’t as easy as just opening an office in a foreign city; it required deep connections with local, regional, and national governments. Moreover, GE wasn’t selling cell phones, or any other product that could be sold just by parachuting in. Its machines cost hundreds of millions of dollars and would be in place for decades. GE needed local operations that understood their market and could establish roots.
Entering new markets, including those that weren’t stable or particularly welcoming to American interests, could also get complex and risky. On some sales trips to unstable regions, Immelt would sleep in the corporate jet because it was considered to be the safest place for him to stay. It was often difficult to win business in countries saturated with corruption, especially for GE, which claimed that it was the rare multinational company that played it straight.
Growth at all costs, grabbing market share, and establishing a presence were all essential to selling in frontier markets. But struggling to profit while expanding was okay with Immelt, because the spoils would come later, he hoped, as GE leveraged its size and new customer relationships in those markets.
Immelt traveled almost constantly, spending about a quarter of his time, he told associates, outside the United States. He had a travel schedule and a retinue befitting a world leader. And there were signs that the world reciprocated. Amid a war of words about trade tensions between China and the United States, Premier Wen Jiabao stopped in New York City in 2003 on his way to meet with President George W. Bush. Wen and his entourage made their way to 30 Rockefeller Center, where they endured the full dog-and-pony show—demonstrations of a locomotive customized to Chinese working conditions, a jet engine for cross-Pacific flights, and a security scanner for better crowd control in advance of the country’s Olympics. Wen’s government had already signed on for $900 million worth of GE power turbines, and it had also offered the company a slot building engines for China’s first commercial airliner, which GE said would generate $3 billion in profit over time.
“In my view the cooperation between Chinese enterprises and GE is successful,” Wen told the Associated Press before heading to Washington to meet the president.
The world had finally heard the new story, it seemed, about Jeff Immelt and General Electric.