Chair and CEO of General Electric Jeffrey Immelt delivered the 2004 Hatfield address yesterday to Cornell students, faculty and the public. His talk, entitled “The Innovation Imperative,” focused on the importance of innovation and growth for corporations in the coming decades.
Immelt began his talk by stating, “When you wake up today in April of 2004, here’s what you see — the economy is better than it’s been in four years, the consumer remains strong, interest rates are low, the credit markets are stable and the government has got every stimulus known to man going in the economy … But everything I just said is more or less irrelevant to running a good company.”
Immelt listed five main trends that explain the importance of innovation in today’s world.
“First, we live in a slow-growth time — no place in the world has enough jobs,” he said. “When Cornell graduates leave this place, they’ll enter a world growing even slower.”
Immelt went on to speak about new competitors, distribution-based changes, demographics and the volatility of today’s world.
“Reacting to these five things is what I’m concerned with,” Immelt said. “It’s going to be a world where competition will be about innovation; if you can’t grow, you can’t survive … Without innovation, without technology, G.E. won’t see the next 100 years.”
Global competitiveness and cash flow also figured prominently in Immelt’s speech. When choosing which companies to invest in, Immelt said, he looks for five traits — a solid technological foundation, consumer interface, a global foundation, multiple revenue streams and capital efficiency.
“Every initiative we have inside our company has to do with growth,” Immelt explained, and listed four — technology, customer focus, sales and marketing and globalization. “That,” he said, “sets the strategy.”
Immelt also gave his audience tips on effective innovation. “First, you have to focus on people and processes,” he began, adding that G.E. uses three-year plans to achieve success. He also said that the next 20 years “will be all about the economics of scarcity,” listing the growing scarcity of energy, health care, security and water as examples.
“It’s also important to make size an advantage … and never make it a disadvantage,” Immelt continued. “We want to grow businesses … We want to take small ideas to big places.”
Knowing how to make money, he added, is also crucial. “I work at G.E. because I want to grow things. I want people to join us because they want to grow things.”
Immelt went on to describe the kind of person that G.E. seeks to employ.
“We need people that know what it feels like to pick up on external trends, who constantly have their antenna up, ready to learn. We need people that are determined and decisive. We need people who have imagination. We need people who know how to be inclusive and engag.e. partners and suppliers. We need people who can learn and teach. We need people that are passionate but still have process.”
“This isn’t just important at G.E., or even Cornell,” Immelt added. “This is a societal issue, the need to be innovative.”
In 2003, the Financial Times named Immelt “Man of the Year,” for moving the company forward after the economic downturn following Sept. 11. G.E. is 126 years old with 300,000 employees, and is the only company that appeared on the original Dow-Jones Industrial Averag.e. in 1896 that still appears on it today.
“The lecture was a great fusion of everything that Cornell is, bringing tog.e.ther learning, education and the real world for a better future,” said Vasilios Roussos grad.
“I think that his emphasis on people, his emphasis on being fair with his employees and the customers he interacts with, is critical to the success of the company,” commented Larry Newman, executive director of systems engineering at Cornell.
Immelt succeeded Jack Welch in 2001 as CEO of the world’s most profitable industrial company.
The Hatfield lecture is an annual event initially sponsored in 1980 by the Continental Group Foundation to honor Robert Hatfield, then retiring chair, president and CEO of the company.
This year, the Johnson School and Cornell University are celebrating the 20th anniversary of the naming of the business school.
Archived article by Maya Rao
Sun Staff Writer