Explore cases offering real-world examples to demonstrate the concepts of the FOAMSHIP approach and how it impacts the potential for success
In 1979, Larry Ellison, founder of Oracle Corporation, saw an opportunity other companies missed when he came across a description of a working prototype for a relational database and discovered that no company had committed to commercializing the technology. With a vision to spend less and do more, Oracle promotes these money-saving steps:
- Consolidate and simplify IT systems at all layers.
- Adopt the self-service model for internal/external clients.
- Analyze and automate all business process flows.
- Move to shared service centers with high accountability.
Such measures can save one-fourth of IT costs with better information, one-fifth of customer service costs by focusing on profitable customers, and one-half of purchasing costs by consolidation and better negotiation.
Using this recipe, Oracle has managed to save over $1 billion US dollars internally. And with this financial power, Oracle has gone shopping for partner and competitor companies alike, concluding in the recent acquisition of rival PeopleSoft. As a sailor himself, Mr. Ellison knows the true value of constantly “trimming the sails” aboard the Oracle ship.
In 1979 FedEx chairman and founder Fred Smith had the vision that “The information about a package is as important as the delivery of the package itself”. This vision remains strong as FedEx has revolutionized the way business is done in the global transportation industry.
FedEx pioneered the use of the Internet and wireless technologies and harnessed this power to provide fast, easy, and convenient delivery services to its customers. At the heart of FedEx Operations is the web-based ‘package tracking application’ that processes 1.1 million package-tracking requests daily, with package bar codes scanned at least a dozen times between pickup and delivery. In all, electronic transactions account for almost two-thirds of the five million shipments FedEx deliveries daily.
In terms of the FedEx ship, we observe how technology acts as a vehicle that facilitates the flow of information and closely links a highly efficient distribution machine with its end customers. As you can imagine, FedEx’s engines are finely tuned, because if they operated at only 99% efficiency, over 1.5 million shipments would get lost every month!
The nation’s number one retailer promises “everyday low prices” and accomplishes this by stringent cost control mechanisms; in particular, highly efficient purchasing and distribution. A documented “Standards for Suppliers” charter clearly outlines the responsibilities of Wal-Mart suppliers who are subject to periodic vendor certification procedures that ensure compliance with the standards. The assembly of the Wal-Mart engine is highly standardized and rigorously supervised, therefore maximizing supply chain Operation and providing the highest value to the customer.
No wonder Wal-Mart has become one of the largest companies in the world and continues to expand. You can sense everyone’s commitment and involvement from the employee that greets you at the door, to the folksy, down-to-earth style of its President.
In Operations, Dell also sets a standard. Dell’s direct model starts and ends with its customers. The Dell ship is a solid example of closely integrating the operations work team with the marketing/sales work team. This integration is illustrated by the five tenets of their model:
- Most Efficient Path to the Customer: A direct relationship with the customer avoids inefficient ‘translation’ of customer needs via resellers and middlemen.
- Single Point of Accountability: A direct relationship provides customers with streamlined and fast access to resources.
- Build-to-Order: A direct relationship enables easy and custom configuration/ordering, minimizes the cost of inventory and provides the best pricing and latest technology features sought by customers.
- Low-Cost Leader: A highly efficient supply chain and manufacturing environment, a focus on technology standards co-developed with industry partners, and continuous process improvements allow the company to provide customers consistent superior value.
- Standards-Based Technology: A focus on standards, stemming from extensive R&D efforts in-house and with industry partners, provides customers flexibility and choice for relevant, high-value products and services.
The direct model tied with the “Soul of Dell” allows the company to provide customers superb value, high-quality, relevant technology, customized systems, superior service and support, and products and services that are easy to buy and use. Few companies can make that claim.
Richard Branson – Virgin Records and Virgin Atlantic Airlines
Back in the early 80’s Richard Branson was probably best known for Virgin Records – the legendary record label that signed major names like the Rolling Stones, Janet Jackson, and The Human League. In 1984, much to the horror of his directors, Richard announced to the world that a high-quality, value-for-money airline would begin operating within three months. Three months, some licenses, staff, and an aircraft packed with celebrities later, Virgin Atlantic Airways was born. By the end of the decade, they had flown over 1 million passengers and started shaking up services onboard by being the first airline to offer individual TVs to their business class passengers.
In 1992 Branson sold Virgin Music to Thorn EMI and invested the proceeds into Virgin Atlantic, improving on an already great service. In the same year, they launched the first super economy service that went on to become award-winning Premium Economy. He spent most of the nineties buying new planes, expanding the route network, and generally breaking new ground in passenger service, both on the ground and in the air. In 1999 Branson sold a 49% stake in the company to Singapore Airlines valuing it at a minimum of £1.225 billion British pounds. During that same year, for services to entrepreneurship, Richard received a knighthood.
2001 saw Virgin being voted Airline of the Year. Branson says: “A business has to be involving, it has to be fun, and it has to exercise your creative instincts.”
Colonel Sanders, Kentucky Fried Chicken
Colonel Harland Sanders has become a world-known figure by marketing his “finger-lickin’ good” Kentucky Fried Chicken. His chicken is now served daily across the United States as well as in more than eighty other countries. It is one of the largest fast-food corporations in the world. The spectacled Colonel Sanders could easily be identified by his clean, crisp white suit, black string tie, and walking cane. A statue of this man can be seen as far away as Nathan Road in Hong Kong.
What makes Colonel Sanders’ story so amazing, you might ask. One of the most amazing aspects of his life is the fact that when he reached the age of sixty-five years old, after running a restaurant for several years, Harland Sanders found himself penniless. He retired and received his first social security check which was for one hundred and five dollars. And that was just the beginning of his international fame and financial success story.
He had loved cooking since he was nine years old and had an idea for a perfect and quick-fried chicken. He bought some pressure cookers and made a few adjustments. After a lot of experimenting with cooking time, pressure, and temperatures, he found a way to fry chicken quickly, under pressure, and come out with the best chicken he’d ever tasted.
Confident of the quality of his fried chicken, the Colonel devoted himself to the chicken franchising business that he started in 1952. He traveled across the country by car from restaurant to restaurant, cooking batches of chicken for restaurant owners and their employees. If the reaction was favorable, he entered into a handshake agreement on a deal that stipulated a payment to him of a nickel for each chicken the restaurant sold.
By 1964, Colonel Sanders had more than 600 franchised outlets for his chicken in the United States and Canada. That year, he sold his interest in the U.S. Company for $2 million to a group of investors including John Y. Brown Jr., who later was governor of Kentucky from 1980 to 1984. For years, Colonel Harland Sanders carried the secret formula for his Kentucky Fried Chicken in his head and the spice mixture in his car. Today, the recipe is locked away in a safe in Louisville, Ky. Only a handful of people know that multi-million-dollar recipe and they’ve signed strict confidentiality contracts.
Colonel Harland Sanders finally retired from the business when he was eighty years old.
If you own a cell phone, there’s a high chance it is a Nokia. Nokia is commonly mistaken for a Japanese company; however, it is Finnish-owned, based in Espoo, Finland. And this is a company whose management has transformed it into a global telecommunications giant. By 1966 Nokia was already 100 years old. The company’s original product line was wood products and wood-grinding mills. The management of the company realized that the future was not in old, outdated technologies and embarked on a journey that would transform it and the Finnish economy.
In 1970 the Nordic Mobile Telephone Network Project paved the way for the Groupe Special Mobile (GSM), which was the design of the all-European digital mobile network of 1982. A recession in 1987 stimulated Finnish companies and the government to concentrate on telecommunications and education, in order to create a technological labor pool.
With Finland being so vast and remote, cell phones became the preferred method of communication amongst Finns, even before cell phones were popular in the United States. Nokia seized the opportunity to make cell phones a non-luxury consumer item in 1994. The rest is history. Nokia dethroned Motorola in the cell phone market and became the leader.
Nokia’s management gives the world a lesson in courage, learning, perseverance, teamwork, and visionary thinking. Finland has now become the first or second (depending on the study) most competitive country in the world, on par with the United States.
Procter & Gamble
Many of us may be familiar with consumer products from giant multi-national Procter & Gamble. From a soap and candle factory back in 1837, P&G products are now used by some 5 billion consumers worldwide. However, few of us may be aware that the company invests approximately 4% of worldwide sales in world-class R&D activities, with over 7,500 scientists working in 22 research centers in 12 countries. P&G has created incredible and powerful brands such as Charmin toilet paper, Bounty paper towels, Ivory soap, Crest toothpaste, Pantene hair products, Clairol cosmetics, and Tide laundry detergent.
P&G’s unique innovative capability revolves around the company’s ability to link this leading-edge R&D across a broad range of product categories with a deep understanding of its consumers’ habits and product needs. P&G has made a science of methodically studying customer likes, dislikes, and trends; they can pinpoint with near certainty the next best-selling brand. Pantene started with samples distributed in the morning newspaper to become one of the leading brands of shampoo. Pringles almost failed as a potato chip due to all the fake-potato propaganda against it, but clever positioning strategies ensured its survival.
This is a real-life example of how the marketing and sales crews aboard the P&G ship work closely with the crew in the engine room to produce new and better products. From a soap and candle factory ‘raft’ in 1837, P&G has evolved into the aircraft carrier it is today.
One of the world’s most recognized brands is Coca-Cola. The world’s leading manufacturer, marketer, and distributor of non-alcoholic beverage concentrates and syrups, Coca-Cola produces more than 400 beverage brands with local operations in over 200 countries. The Coca-Cola ship cruises to these 200 ports, where an expert marketing/sales crew listens closely to native tastes. According to Coca-Cola “what people want in a beverage is a reflection of, who they are, where they live, how they work and play, and how they relax and recharge”.
As per the company website, Coca-Cola utilizes a strategy they call Community Marketing, where employees play a major role in customer success by increasing the presence of Coca-Cola at the neighborhood level. Through various activities, the employees develop opportunities to become involved in outreach and service to youth, education, and the environment. At the same time, they offer fresh ideas for advertising and merchandising and show retailers how to use Coca-Cola to draw more consumer traffic and generate sales.
Whether, soft drink, tea, juice, or water, the Coca-Cola Marketing & Sales strategy is carefully crafted to touch the souls of its clients. That is why the Coca-Cola ship is Number One.
Citigroup pioneered the use of information technology to reach out to clients in the financial services industry. This organization is committed to providing customers a full suite of banking, brokerage, and insurance products/services, accessible 24/7, on any device anywhere, and in a secure and personalized manner. Even though the company has leading-edge technology, it still tailors its offerings to provide customer services in traditional brick & mortar branches, via telephone, online, and wireless devices.
As the world’s largest card company with more than 100 million cards outstanding, Citigroup is the preferred payment choice for online purchases. Citigroup R&D efforts are creating new payment options designed specifically for the Internet that will allow users more flexibility and security. The Citigroup fleet, comprised of battleships such as Citibank, Diner’s Club credit card, Smith Barney brokerage, and Traveler’s insurance, is well equipped to deliver its multiple goods to multiple client ports.
Southwest Airlines may just be one of America’s most fun-spirited companies. It understands that nurturing investments in the Southwest Spirit creates an intangible element that clearly differentiates the airline from its competitors. Furthermore, the Southwest Spirit is perhaps the key success factor for survival during the industry’s hard times. In tough times you don’t want your crew to jump ship; that’s when you need them most.
Southwest clearly states its mission as “Dedication to the highest quality of Customer Service delivered with a sense of warmth, friendliness, individual pride, and Company Spirit”. In fact, Southwest’s documented Customer Service Commitment has led to the airline boasting the industry’s best cumulative consumer satisfaction record, according to the U.S. Department of Transportation.
Southwest recognizes the value of its crew and is committed to creating a work environment with equal opportunity for learning and personal growth. Crewmembers are encouraged to exploit their creative talents to improve the effectiveness of the company in any area. And all employees have shared financially in the success.
Southwest’s Soul is so strong and vibrant that it is shared with its customers, providing a unique and entertaining flying experience. This can be seen in everyone from the jovial Founder, Herb Kelleher, to the baggage handlers and humorous flight attendants. Southwest’s collective can-do spirit has kept it on top of the airline industry when many other airlines have long lost their soul.
Dell Computers, a world-leading computer manufacturer, is well-known for its direct-to-consumer business model. Interestingly, the company characterizes its work environment in a statement of corporate philosophy called the “Soul of Dell”. The statement defines the personality of the company, its future aspirations, and forms the basis of a “winning culture”.
Quoting the core elements of the Soul of Dell:
- Customers: We believe in creating loyal customers by providing a superior experience at a great value.
- The Dell Team: We believe our continued success lies in teamwork and the opportunity each team member has to learn, develop and grow.
- Direct Relationships: We believe in being direct in all we do.
- Global Citizenship: We believe in participating responsibly in the global marketplace.
- Winning: We have a strong passion for winning in everything we do.
The Dell Soul brings together, with great pride, all crew members of the Dell ship. And that’s exactly what FOAMSHIP is all about.
Winston Churchill, Prime Minister of Britain
Here we have an example of a leader who elevated the attributes of Soul to a national level. If there was ever a role model of a leader for the ages, it was Sir Winston Churchill. Two times the Prime Minister of Britain, during times of war and peace; journalist; lord of the admiralty; prisoner of war who managed to escape; and leader in the defeat of fascism. Churchill was a man of extraordinary resilience, dedication, enthusiasm, and focus; and he instilled those qualities in all around him. As Lord of the Admiralty, he was in constant communication with his fleet of ships and kept informed of the most intricate operational details as seen in the countless memos and letters he wrote to his subordinates.
He was a man who didn’t accept defeats, either politically or in war; although he did understand the importance of taking time to regather his energy and momentum. This was also a man who would not compromise his values and beliefs. During the Second World War, he would not accept anything but Hitler’s unconditional surrender and “Victory, at all costs, victory in spite of all terror; victory, however long and hard the road may be.” During the German bombing of Britain, Churchill’s radio addresses kept the English people hopeful and united.
Churchill received many honors, far too many to detail here. He was knighted in 1953, the same year in which he was awarded the Nobel Prize for Literature, and in 1963 he was conferred by the U.S. Congress honorary citizenship of the United States. Men like Churchill occur once in a lifetime. Anyone interested in learning about leadership and human character is encouraged to read his biography.
Salesforce is another example of a company that takes pride in its Soul, and in creating a positive environment for all the individual souls on board. Employees can take up to 7 days of paid volunteer time off each year. This can be used to support their communities in a wide variety of ways. Since beginning the program in 1999, Salesforce employees have donated more than 1 million volunteer hours to improve the lives of others. Giving back is a focal part of the company culture at Salesforce and this has proven to be a significant incentive for joining the company.
Nestlé is another good example of a company that cares, which is evidenced in their motto “Good Food. Good Life.” A focus on the improvement of public health, aligned with the United Nations’ Sustainable Development Goals is an important focus within this organization.
The clothing industry is known for experiencing a significant amount of unethical practice accusations, particularly in terms of child labor. However, not all organizations are created equal and some not only strive to maintain their morals but also go above and beyond to put right injustices they uncover.
A prime example of this can be seen in Levi Strauss. At one point, the company discovered that one of its contractors was guilty of hiring children under the age of 15 to work in a factory in Bangladesh, India. This is both illegal, and against the values of the organization. The obvious, and easiest, solution would have been to dismiss the child laborers and hire legally consenting adults to replace them. However, in Bangladesh, the wages earned by these children were likely to support entire families. If the children lost their jobs, they would have almost certainly have ended up resorting to begging on the streets to try and put food on their tables. This would have been one of those rare instances where doing what seemed to be the obvious “right thing”, would have had severely negative and harmful results.
So, Levi Strauss devised an alternative solution – one that aligned with the organization’s Soul and values of empathy, originality, integrity, and courage. Instead of simply firing the children, the company paid the children to attend school instead. Not only did Levi Strauss continue to pay the children their salaries and benefits, but it also paid for their tuition, books, and school supplies. The organization rejected the easier and cheaper course of action to pursue a route charted by its values and beliefs.
Volvo chooses global benefit over profit
In 1959, Nils Bohlin, a Swedish engineer employed at Volvo, designed an innovative safety feature that can be found in every car today – the three-point seatbelt.
Although this changed with the passing of federal law in 1966, at this stage in history seatbelts were not a mandatory feature in vehicles, and those that did exist were inadequate two-point lap-straps that provided no upper body protection at all. In many cases, these restraints actually caused more harm during accidents than they prevented. Bohlin’s invention took him less than a year to design and he filed for his patent in 1959 – the same year that Volvo began to incorporate this incredibly beneficial safety feature into all of its vehicles. When asked in the patent application to state the purpose of his design, Bohlin declared that it:
“is to provide a safety belt which, independently of the strength of the seat and its connection with the vehicle in an effective and physiological favourable manner, retains the upper as well as the lower part of the body of the strapped person against the action of substantially forwardly directed forces and which is easy to fasten and unfasten and even in other respects satisfies rigid requirements.”
On 10 July 1962, the United States Patent Office issued patent number 3043625 to Nils Bohlin for his seatbelt. This was also when Bohlin and Volvo showed the true soul of the organization by choosing to open up the patent, instead of licensing it out to all other automobile manufacturers. This enabled the entire automotive industry to incorporate this safety feature into their vehicles without additional costs, and Bohlin’s original design is so effective that it has required barely any improvements over the years. Volvo has estimated that well over a million lives have been saved by Bohlin’s three-point seatbelt, and the risk of injury or death in the event of an automotive accident is reduced by at least 50%.
The organization’s strong sense of soul led to the belief that Bohlin’s innovative new seatbelt design had significantly more value to the world as a free life-saving device than it did as a money-making tool. Volvo stated the following about its gesture of global goodwill:
“The decision to release the three-point seatbelt patent was visionary and in line with Volvo’s guiding principle of safety.”
Founded in 1995, eBay is the World’s Online Marketplace for the sale of goods and services. Today the eBay community consists of tens of millions of registered members from around the globe. People spend more time on eBay than any other online site, making it the most popular shopping destination on the Internet.
eBay’s Heading is one of economic empowerment – a world where information technology overcomes geographical, social, cultural, and economic barriers and enables everyone to fully access and participates in the benefits of a global economy. With eBay, you can buy or sell almost anything, anywhere. We can say, the eBay ship is charting new courses in the digital world. Who would have thought ten years ago that you’d be selling your Marilyn Monroe memorabilia to someone in Mombasa!
Here are some examples of truly great vision statements to inspire and motivate:
- Amazon: “To be Earth’s most customer-centric company where customers can find and discover anything they might want to buy online.”
- Ben & Jerry’s: “Making the best ice cream in the nicest possible way.”
- Caterpillar: “Our vision is a world in which all people’s basic needs – such as shelter, clean water, sanitation, food, and reliable power – are fulfilled in an environmentally sustainable way, and a company that improves the quality of the environment and the communities where we live and work.”
- Google: “To provide access to the world’s information in one click.”
- Habitat for Humanity: “A world where everyone has a decent place to live.”
- Hilton Hotels & Resorts: “To fill the earth with the light and warmth of hospitality.”
- IKEA: “To create a better everyday life for the many people.”
- Intel: “If it’s smart and connected, it’s best with Intel.”
- LinkedIn: “Create economic opportunity for every member of the global workforce.”
- Oxfam: “A world without poverty.”
- Patagonia: “Build the best product, cause no unnecessary harm, use business to inspire and implement solutions to the environmental crisis.”
- Prezi: “To reinvent how people share knowledge, tell stories, and inspire their audiences to act.”
- Samsung: “Inspire the world, create the future.”
- Smithsonian: “By 2022, the Smithsonian will build on its unique strengths to engage and to inspire more people, where they are, with greater impact, while catalyzing critical conversation on issues affecting our nation and the world.”
- Southwest Airlines: “To become the world’s most loved, most flown, and most profitable airline.”
- Sweetgreen: “To inspire healthier communities by connecting people to real food.”
- TED: “Spread ideas.”
- Walgreens: “To be America’s most-loved pharmacy-led health, well-being and beauty company.”
- Warby Parker: “To offer designer eyewear at a revolutionary price, while leading the way for socially conscious businesses.”
- Wyeth: “To lead the way to a healthier world. By carrying out this vision at every level of our organization, we will be recognized by our employees, customers, and shareholders as the best pharmaceutical company in the world, resulting in value for all.”
Dave Carroll vs. United Airlines
A true example of how tremendous the impact of innovative thinking can be is found in the tale of Dave Carroll and his Taylor guitar. Dave, a singer-songwriter, arrived at Chicago’s O’Hare airport for a layover in 2008, to find that his Taylor guitar, valued at $3,500 US dollars, had been damaged by United Airlines baggage handlers.
Despite the damage being obvious, Dave’s repeated attempts to claim damages via the United Airlines reimbursement procedure were rejected by the enterprise. The next nine months saw Dave send a steady stream of emails, phone calls, and pleas to the airline’s customer service representatives – including a proposed solution that the airline provide $1,200 worth of flight vouchers as compensation for the damaged guitar. Still, United Airlines remained unyielding.
So, Dave did what Dave does best. He wrote a song about it.
United Breaks Guitars went viral. Within the first four days of the song being posted online, United Airlines’ stock price saw a 10% drop, which cost the shareholders an estimated $180 million US dollars. The organization also suffered such a tsunami of negative publicity that by the time the song reached 150,000 views on YouTube, United Airlines was begging Dave Carroll to accept payment in exchange for taking the video down. Dave refused, suggesting that they donate the money to charity instead, and “United Breaks Guitars” now has over 20 million YouTube views.
The age of technology had led to the internet becoming a critical platform and a global community that can share both positive and negative experiences instantly, and internationally. As well as the 20 million negative impressions on YouTube, a Google search of the story yields around 8 million results – permanently available to forever document the terrible mistake United Airlines made by not agreeing to Dave Carroll’s request for $1,200 worth of travel vouchers as reimbursement for the damage to his beloved guitar.
Boeing Misses the Boat
In the late 1950s, Boeing revolutionized the way the world traveled with its Boeing 707 aircraft. Boeing was an industrial and military powerhouse in aviation and aerospace in America and the rest of the world. For many years, Boeing was the single largest global exporter of American goods. It developed iconic aircraft like the Boeing 747 Jumbo, known as the “Queen of the Skies” with its distinctive domed upper deck, as well as other reliable and trustworthy airplanes like the original 737 and 767 aircraft lines. At one point in time people used to say: “If it ain’t Boeing, I ain’t going.” The mighty aircraft producer was the king of airspace for a long time and problems with Boeing airplanes were unheard of – especially ones that cost lives.
Then in the late 1960s, a consortium of European companies and countries decided to give Boeing a run for its money by launching the Airbus A300 Programme. Suddenly, there was a wider range of airplane choices available to airlines, and the competitive pressure led to Boeing taking excessive cost-cutting measures and shortcuts. The gorgeously designed 787 Dreamliner developed a fault where its batteries would catch on fire below deck. Then came the disastrous reengineering of the Boeing 737, one of the airlines’ workhorse airplanes. The redesign of the engine’s positioning, and the addition of new software, caused several crashes that tragically cost hundreds of lives. This triggered the grounding of the 737-MAX fleet worldwide and gave the Boeing reputation a black eye.
The damage to the brand has been hard to shake and persists to this day. Industry executives and former Boeing executives have publicly lambasted Boeing for its flawed approach to building airplanes which, in some cases, compromises quality and safety. It seems that issues relating to Boeing keep surfacing time and time again.
Boeing, and other highly revered companies such as General Electric (a supplier of Boeing jet engines), have lost their luster because they forgot what made them great in the first place. Quality does come at a price, but quality-reducing shortcuts can come at a cost that is as high as the loss of life. As the philosopher and poet George (Jorge) Santayana said: “Those who don’t remember the past are condemned to repeat it.” It will be interesting to see if the great companies of today such as Google and Apple repeat the mistakes of these titans of industry from the past.
General Electric – A Failing Legacy?
Paying close attention to an organization’s passage is essential to ensuring that it remains on course. An example of how drifting off-course can severely impact an organizational vessel can be seen in the disappointing tale of General Electric.
With Thomas Edison as one of the founders, the Edison General Electric Company came into being in 1889, when multiple electricity-based enterprises he had business interests in were merged to form a single entity. In 1892, the merger between Edison General Electric Company and Thomson-Houston Electric Company was the metamorphosis that created General Electric. 1896 saw General Electric proudly become one of the initial 12 organizations listed on the Dow Jones Industrial Exchange when this was first formed. Over the next several decades, General Electric was at the forefront of emerging technology – from radio and television broadcasting, to computing, to aviation, to renewable energy, to its involvement in the Moon landing, it appeared that GE had an invincible Midas touch.
However, no organization is invincible. Somewhere along its passage, General Electric lost sight of where it was heading, and it veered off-course. Allegations of accounting fraud, misappropriation of funds, intentional misrepresentation of information to investors, government bribes, and reckless environmental damage led to the ship taking on water slowly, but steadily, for many years.
In his role as CEO, Jeffrey Immelt served as the captain of the General Electric ship from 2001 to 2017, and there has been much criticism over his handling of the organizational vessel. Many believe that during his time as captain Immelt overpaid for acquisitions, allowed areas of the multinational conglomerate to spiral out of control without correction, and was too stubborn to adapt to the tides turning around the GE ship. This resulted in the vessel’s share price plummeting by 30%, causing a disastrous whirlpool that wiped out over $150 billion in market value and sunk the retirement savings of thousands of former General Electric shipmates.
Conditions had deteriorated so dramatically that they continued to decline even after Immelt jumped ship in 2017. Over $200 million of the ship’s fuel supply was spent on settling legal infractions, it was dropped from the Dow Jones industrial average, and General Electric became almost unrecognizable as the previously proud pioneer of the oceans of industry. Regardless of where the blame truly lies, this once exemplary organizational vessel was steered in the wrong direction and the treacherous passage chosen almost wrecked the ship completely.
However, although only time will truly tell, there may be hope on the horizon. Larry Culp took over as captain of the General Electric ship in October 2018, and since then there have been some improvements in plotting its course. Despite the global pandemic affecting almost every industry around the world, with a tremendous impact on aviation, in particular, General Electric has shown an upward trend in its growth, significantly increased share prices, and some seemingly positive changes such as reduced debt lessening the burden on the ship’s fuel supply and improved operations to assist the ship in sailing more smoothly. Although there is still much work to be done to truly turn the General Electric ship around, the new attention to its passage offers the potential for this once-great titan to sail proudly once more. This is one of those cases that has the potential to become an example of setting a misdirected business vessel back on course.