In my tangible futures presentation last week, I repeated a statement I’ve written here, that sometime during the second half of the 20th century, American companies forgot how to dream. I’m happy to contradict that statement with a clear example: GE.
In Growth as a Process, Jeffrey Immelt reveals the process that led to their Ecomagination initiative. Not only is it not greenwashing or a flimsy vision statement, it grew out of their strategic planning process and has metrics that benefit the company and the environment, while bravely looking several years into the future.
The whole article is full of valuable insights, but this section is worth quoting:
The very economics [of scarcity], by the way, that drove you to read the demand for organic growth. You’re trying to make tailwind out of the headwind.
Exactly right. So we plugged that input from S-1 [GE’s strategic planning process] into the Commercial Council, which studied it for nine months. We met with people from NGOs, government offices, and other relevant organizations. We brought a lot of assets together, including our knowledge of public policy and how it gets influenced. Once we had done our homework, we launched ecomagination with 17 products we could point to. As always, we were metric driven. We said that our $10 billion of revenue from products tapping renewable energy sources like the sun and wind had to go to $20 billion in five years. The $750 million we were spending on R&D for clean technologies had to go to a billion and a half. Our own greenhouse gas emissions had to come down by 1% by 2012.
Has there been any push back from your customers, some of whom I can imagine would rather stick to their carbon-burning ways?
There were plenty of guys on our energy team who hated this in the beginning because half of their customers were saying they hated it. Never mind that half of the customers loved it. We just kept talking: “Here’s where we’re going. Here’s why we think it’s good for both of us. And it’s going to come someday anyhow, so let’s get ahead of it.” We hosted what we call a dreaming session in the summer of 2004 with the 30 biggest utilities. Some of the top players in the industry—CEOs like Jim Rogers and David Rutledge—came to Crotonville and heard Jeff Sachs from Columbia talk about global warming. There were other speakers who were pretty compelling on different topics, and breakout sessions. I floated the idea of doing something on public policy on greenhouse gases, and we had a good debate.
In part, ecomagination helped to show the organization that we can do these things. The company has been great in terms of management practice but more reluctant when it comes to what I would call business innovation. Ecomagination was one way to show the organization that it’s OK to stick your neck out and even to make customers a little bit uncomfortable.