The GE trade trick: Reveal trade tricks to customers

Conducts training programme for Southeast Asian customers to give an insight into the success of GE

OSSINING (NY): On a warm October morning, some three dozen executives gathered at General Electric Co’s training campus north of New York for a weeklong programme.

But rather than a group of up-and-coming GE managers, this class was made up of executives from airlines, oil and gas producers and power companies, all of them GE customers from Southeast Asia.

The training course is just one way that GE, a conglomerate with more than 300,000 employees in 100 countries, stays close to its markets around the world.

Asia is one of its fastest-growing regions, and GE holds about six such training programmes each year for executives from the region.

“Investing in the relationship pays huge dividends,” said Stuart Dean, president of GE’s Southeast Asian operations.

“We almost always have the higher price in a particular transaction, and where we’ve had a strong relationship with the customer, where there’s a high level of trust, we always get a last look, at a minimum.”

GE expects to generate about half its sales outside the United States this year, and growth in Asia will be key to hitting its goal of getting 60% of its revenue outside its home country by 2010.

In a sign that these efforts are paying off, the company’s emerging-market revenue rose 20% last year to $29 billion, or about 18% of its total revenue of $163 billion. It aims to boost the emerging market figure to about $50 billion by 2010.

For those who made the trip across the Pacific, the desire is to learn some of the tricks that GE has used to build itself into the US company with the second-largest market capitalisation.

In one exercise, a GE trainer asked the class to plot their reactions to statements like “innovation always starts with customer insights” on large sheets of paper, to show how opinions varied within the group.

“This is a very valuable chance, for me to come up here, to really learn from GE,” said Kathleen Tan, executive vice president, commercial, at Malaysian budget airline AirAsia Bhd.

“Everyone knows they are a big company with a long heritage, very strong leadership and I really like learning about the operating system and their management,” she said.

GE’s reputation for training — the chief executives of Boeing Co, Home Depot Inc and Honeywell International Inc all have GE pedigrees — seems to have a particular pull in Asia.

The Southeast Asian training course has been held every year since 1992, with the exception of 1997 during the Asian currency crisis and 1998, when it was held in Singapore.

Other customer programmes draw executives and government officials from China, Japan and South Korea, with plans next year for a Vietnamese contingent.

GE holds shorter courses in Europe and the Middle East for its customers there.

Founded in 1956 to prepare 1,500 top GE managers for a restructuring, the training facility in Ossining, New York, processes about 10,000 people each year. About 10% of them are customers, at a cost to GE of $1.5 million a year.

The facility is known as Crotonville inside the company, but its official name is the John F. Welch Leadership Development Centre, after the chairman and chief executive who stepped down in 2001.

The visitors studied GE’s operating mechanism, including the series of planning and review meetings that dominate its corporate calendar, as well as standard management training fare such as the importance of giving feedback to employees.

And while Welch’s name name is still a powerful draw, the culture at GE has changed under Chief Executive Jeff Immelt and some of Welch’s practices — such as targeting a certain number of poor performing managers for termination — are no longer taught.

“Those days are gone. I know that Jack Welch is still out there telling everybody that, but we don’t do that anymore,” Susan Peters, GE’s chief learning officer, told the group.

Now, managers at GE are asked to use their judgment, she said. About 7.5 % of poor performers among GE’s top 600 executives get nudged out each year.

“GE is different than it was. The machoness is really tempered,” Peters said. “We don’t need to be that macho anymore.”