General Electric, better known simply as GE, has an underlying strength in its ability to anticipate change and to continually evolve, both as an organisation and in the way it does business.
So says Pornlert Lattanan, GE's president and national executive for Thailand and Laos, when speaking of the vast US-based conglomerate that Forbes this year described as the world's largest company.
He said the director of the Sasin Graudate Institute of Business Administration, Toemsakdi Krishnamra, had recently aasked why GE had responded so well to the world's financial crisis.
In reply, GE denied "responding" to the crisis. Rather, it had anticipated the crisis and prepared well beforehand.
"We anticipated this, at my level, two years earlier and we had an action plan one year beforehand," Pornlert said.
Having anticipated a shift in the world's economic power, GE began several years ago what it calls "reverse innovation". This involves the design of products for emerging markets and making them global, instead following conventional wisdom and creating products for developed economies land adapting them for emerging countriems (GE's chairman and chief executive, Jeffrey Immelt, has written specifically about this. See "How GE us Disrupting Itself", Harvard Business Review, September 28.)
Pornlet told The Nation in an exclusive interview that GE had redesigned its business mod,el to develop products "from scratch" for developing markets, and although these products might not be among the most sophosticated, they worked well for those markets.
However, the products are now being sold in the US and other developed markets because users in those countries have been forced to reduce their costs.
"They are now willing to pay 50 per cent for an 80-per-cent performance," Pornlert said. "You don't have to drive a top-class car every day.When you go out looking for a land site, would you drive your Lexus? Wouldn't you rather drive a pickup?"
In his Harvard Business Review article,Immelt refers to a US@1,000 (Bt33,400) handheld electrocar-diogram device and a portable ultrasound machine, developed originally for India and China, as being among GE's "reverse innovation" products that are now being sold in the US.
As well as product development, GS has found Asia to be a good place in which to study new applications that can be applied worldwide, Pornlert said.
Pornlert said the "evolving GE" had given rise to a joke within the company: "If you don't like something, don't worry. It will be gone in six months. On the other hand, if you like something, it may also be gone in six months.
In a big corporation, there is always a chance that something will have to be ahandoned, even if it is believed to be good, because it doesn't work well elsewhere, he said.
"Internal reflection" is a mechanism that helps GE to maintain its evolution. The company has an executive development course for executives with high potential. It covers the conglomerate's worldwide operations. Four of the 30 executives chosen for this year's course, which had the theme "Leadership for the 21st century", elected to come to Southeast Asia, where they visited Singapore, Malaysia and Thailand.
During a one-week visit to Thailand, the executives explored some leading Thai companies and universities, including Siam Cement and the Sasin institute. They also interviewed members of GE Thailand's staff.
Pornlert said he could not disclose what the executives thought about leadership for the 21st century before they submitted their final reports to GE's chief executive. However, one point of reflection was that GE Thailand was staffed mainly by "Generation X" workers, and a future challenge would be dealing with youngenr generations so that they felt pride in working for GE and an obligation to the company.
Pornlert believes the spirit of corporate social responsibility could help, and feels that CST should assume a broader concept, and should not be limited, for instance, to having the staff paint a school.
"We'd like them to feel good about what they do.[They should feel that] what they're doing has produced some impact on society; has been meaningful."
To motivate younger-generation workers, the company must not only be concerned for the young ones, but also for the older staff, who have to be trained to adjust their communications, their job assignments and their coaching methods, he said.
Pornlert said GE had succeeded well in Thailand, where it had achieved 25-per-cent annual growth for the past six or seven years. Last year, the firm recorded flat growth, mainly because it movejd out the high-growth finance business to merge this operation with Bank of Ayudhya, in which it acquired a controlling stake.
GE Thailand's business strategy is to look out for more non-finance enterprises, including energy infrastructure, technology infrastructure and consumer and industrial businesses.
Pornlert said the government's three-year Thai Khemkaeng investment programme was expected to be a boon to GE's businesses because it highlighted many areas in which the company had know-how and expertise.
Despite its worldwide coverage, GE would liek to be perceived in Thailand as a local player "that shares the same destiny as everybody in the country", Pornlert said.
Friday, October 2, 2009
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