EP 63 - How the Mighty Fall: A Case Study

Thomas Edison was born in 1847 and died in 1931. He truly was an American inventor and a businessman. He was often described as America's greatest inventor. His inventions included the phonograph, the motion picture camera, and the long-lasting practical electric light bulb which had a widespread impact on the modern industrialized world. He was a prolific inventor holding 1093 U.S. patents. His talents eventually led him to found 14 companies including General Electric; still one of the largest publicly traded companies in the world. Now let's take a few minutes to look at the history of this American icon of a company, General Electric, and see what lessons that we as NISC may learn. So General Electric is an industrial giant with a storied list of products from appliances, jet engines, marine engines, military engines, locomotive engines, financial services, real estate, power generation and distribution, renewables including solar arrays and wind turbines, Energy storage, Healthcare, Oil and gas production, Software Design and Development, mining, and the list goes on and on and on. The point is this General Electric over the years has become one of the largest and most diversified companies on the planet. Their management training programs are legendary. At least 16 former G.E. management types are now CEOs of U.S. publicly traded companies including huge companies like GM and Home Depot. The unprecedented culture and training program that would produce that many outstanding leaders from just one company is perhaps the most fitting tribute to the culture of G.E. It's fair to say that working at G.E. was one of the most coveted and promising careers in corporate America. Now you could say that G.E. had it all. They were financially strong, they had an amazing market share, they were diversified, they had a strong culture and a very deep bench of talent. At their peak, General Electric was one of the largest valued companies in the world. But today it seems as if General Electric has lost its luster. They have struggled mightily, financially. They have sold off many of their assets and companies. In 1988 their share value was sixty dollars a share placing the value of their company at six hundred billion dollars. But today they are barely a shadow of that company and their value is under 100 billion dollars. The share price is about 12 dollars a share. Ouch. I hope you don't have too much of G.E. stock in your 401k account. So what happened? How did this mighty icon of a company fall so far? And could that happen to NISC? Did G.E. get too comfortable? Did they lose their hunger and their drive? Did large margins allow them to get sloppy and inefficient? Did they take the loyalty of their customers and the engagement of their employees for granted? Did they stop learning and stop innovating? What can we learn from this tragic fall from grace as they have gone from being one of the most admired companies in the world to a bit of a laughing stock? I wonder what Thomas Edison would say? Today as we look at NISC we can say we enjoy a strong financial position, we are leading the industry in market share, we are winning as we compete in the marketplace and our competitive prowess has placed our competitors on their heels, we have a diversified product mix, and have made good progress in developing and strengthening the bench of our talented employees. Does all of that sound familiar or parallel the history of G.E.? While it's taken almost 50 years for us to get NISC to this place I would submit to you that we will have even more challenges to manage our growth, to maintain our culture, and to make the necessary organizational changes that will be required as the scope of NISC continues to grow. Our goal at NISC is simple; to be the best in the industries we serve, to be the most innovative, and have the most robust enterprise solution in the utility and telecommunications space. We want and we're working towards a solid reputation and a 100 percent reference ability among our member-owners. We aspire to be a place where the employees can trust and believe in management and our board of directors. A place where doing the right thing is not only understood but expected. Maintaining a sense of organizational humility and a determination never to be satisfied with our products, our position in the market or the engagement of our employees is something that we must absolutely stay focused on in order to maintain our leadership position. While we have made progress we still have much work to do to achieve those lofty goals. General Electric was once a great and an admired company. Today, not so much. Let that never be said about NISC. We have worked too hard to build this organization into what it is today. Let's keep growing, keep improving, keep learning, keep innovating, and never lose our resolve to be the very best at serving our employees and serving our members. Thanks for listening. I appreciate you, Vern.