Sunday, December 18, 2005

The Business of Green

As always, The Economist from December 10th has an insightful article about the greening of GE. Several fascinating points about how GE is going green.

First, CEO Immelt is announcing at the start of 2006 that all global managers will be evaluated not just on their financial performance but also on their green bottom lines. All units will have ambitious targets for reducing carbon dioxide by 2012.

Second, I found it particularly interesting how GE got started with its focus on clean technologies. GE began with its customers. Eighteen months before the new green strategy was launched, CEO Immelt invited top exec customers to two- day "dreaming sessions" to talk about what products they might need in the future and where the world might be in 2015. Immelt's thinking was that if my customers want clean energy, GE better be ready. Whereas former CEO Jack Welch began strategy with supreme execution (Six Sigma), Immelt begins with the customer.

Third, the article not surprisingly compares GE with BP's "Beyond Petroleum" environmental thought leadership. The comparison is meant as a warning to GE to not overpromise with its new Ecoimagination manifesto. The writer seems to believe that BP might be back-pedaling from its lofty talk of alternative fuels and climate control. The point being made is that change comes slowly to the energy business and GE should be careful because going green could backfire. BP CEO Lord John Browne is quoted as warning companies: "Be very careful to separate aspirations from actual promised action. Business is about doing business, it's not a surrogate for goverment or public service." GE has stirred the global business pot with its message about green technologies but it needs to keep a lid on overreaching in case GE has to pull back from its ambitious targets. However, my bet is on GE making its targets.


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