In the wake of President Obama’s appointment of Jeffrey Immelt to lead the President’s Economic Recovery Advisory Board, it seems a good time to examine how GE has performed over the decade of Immelt’s leadership.
Looking at GE stock performance alone, the company has, unfortunately, performed dismally. GE stock has declined more than -50% over the past decade, and the Dow Jones Industrial Averages are up +5% – basically flat for the decade. Primary competitor Siemens, by contrast, is up by more than +50% over that same time frame.
This stunningly bad performance would have cost other CEOs their jobs, but perhaps it isn’t management that is causing the problem. CoreBrand quantitatively benchmark tracks the reputation of 800 companies across 49 industries, and the findings are very consistent for evaluating a company’s corporate brand over time. When Immelt started, Familiarity for GE was 89 and Favorability was 77. Today, Familiarity is 91 and Favorability is 76. Not much of a drop in Favorability, but the lost opportunity becomes evident when examining how the corporate brand that grew early in his tenure from 2001-2006 has shown significant declines since 2007 (illustration #1).
It is even more revealing to examine the attributes that CoreBrand measures over time. The “reputation” has been carrying the company for the past decade along with expected “investment potential,” but “perceptions of management” have been regrettably detrimental. Most revealing, the attributes are all heading south in a significant, consistent manner, and with growing momentum (illustration #2). This is not good for a company that is supposed to inspire confidence in the economy.
Finally, the appointment of Immelt would also seem curious when examining his track record for job creation since GE cut 24,000 jobs from its U.S. workforce from 2001-2009. If President Obama’s stated goal is to foster private-sector job growth, this appointment just won’t inspire confidence at any level.
It might have been better to select someone who actually created some energy through the recession or perhaps a company that didn’t require a government bailout. I can think of a number of better candidates. Alan Mulally, CEO, Ford Motor Company, would be at the top of the list. Steve Jobs, CEO, Apple, would be a wonderful candidate if he were not on a health leave. The point is that there are others who have proven themselves at reinventing industries, and that is the kind of leader who should be managing this initiative.
Author: James R. Gregory, CEO of CoreBrand