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Online Extra: Immelt on Being an "Embedded Partner"

General Electric Co. is famous for launching management initiatives that shake up the bones of the organization. The latest push for Chairman and CEO Jeffrey R. Immelt is to make GE truly customer-centric with "At the Customer, For the Customer" (ACFC). In contrast to other GE programs such as Six Sigma, Work-Out, and Change Acceleration Process, which were focused on how things were done at GE, this initiative involves packaging up some of GE's best practices and sharing them with GE customers to make them more efficient.

Immelt recently spoke with BusinessWeek Associate Editor Diane Brady about how he's implementing ACFC, and what it means for GE (GE). Edited excerpts of their conversation follow:

Q: When did the whole concept of "At the Customer, For the Customer" come into your mind?

A: It was about the late '80s, when I made the transition from our plastics business to our appliances business. That's when I recognized how important it is for suppliers to be embedded in their customers' work. I wanted to find ways for sales forces to be able to redefine what it meant to sell.

Q: Did you think GE was inadequate in serving its customers in the late '80s?

A: My goal has always been to find and maximize the amount of value we can bring to customers. I didn't think we did a great job of that, in terms of linking all the things that we could do. When you're a company like GE, how do you use your breadth as an advantage and be able to package that in a way that's beneficial to customers?

Q: Do you think it's harder for a large, multi-industry company like GE to be truly customer-focused?

A: Any time you get big, you always have to worry about layers of bureaucracy. One of the things that keeps a company small and fast is a real focus on the marketplace, on the customer. Customers have a way of weeding bureaucracy out of you if you really listen to them.

Q: What's the real difference between ACFC and a good sales call?

A: We've got a lot of parts of the company where our products are differentiated by technology and service and things like that. It's just another edge you can bring when you're trying to sell a GE [medical] scanner vs. a Siemens (SI) scanner. That's why sales people exist -- to try to drive differentiation vs. the competition.

The focus of most of these projects is to improve customers' profitability. It means fewer down times, outages that don't last as long, leadership development. It's tangible stuff.

Q: Do you think this may come at the expense of bottom-line results for some of your best salespeople?

A: That's clearly not what we've seen. I'm not doing projects for the sake of doing projects. Growth is what we're after, what we measure. The people in the field believe, as do I, that if you do this you're going to get better growth.

Q: Does every single customer want to see more of GE?

A: No. The goal for us is to ask. There are a lot of customers who say, "I don't have any ability to use it. I don't necessarily want it," and then we have to do other things. But I would say easily 30% or 40% of our customers look at this as something they really want to be involved with -- and that's not bad.

Q: Do you think GE is better positioned to do this kind on holistic selling than it was, say, 15 years ago?

A: I do, because we know more and, as we've grown bigger, there are six key industries where we can have a lot of knowledge: incredible domain knowledge in areas like aviation, energy, health care, retailing, locomotive transportation. We can bring a ton of stuff that nobody else who competes with us can bring.

Q: What has been the toughest part of executing this?

A: The first thing is to drive training. This is something that requires us to be training our front-line people all the time and setting expectations. Beyond that, the challenge is to shed and break down every ounce of arrogance. It's driven from the CEOs of our businesses, and it has to be a function where those businesses are really listening to their customers and executing programs on their behalf.

The third thing is you've got to have focus. This is not for every customer, and not every project works. We've probably made a few mistakes along the way, but we're generally focusing on the things that matter to our customers.

Q: Do you think sales has been second fiddle at GE?

A: It has been fragmented. We've got a lot of good salespeople, but that's not enough. We've got indisputably the world's best finance function. We got a financial-management program that has been in place for 80 years. We have an audit staff, an incredible caliber of people. By any measure, it's the best. My vision is to have the same thing commercially.

You have to start at the beginning, so we want to hire 150 or 200 people in this program every year, and we want to have the mechanisms to pick the best, track their careers, and do other things to ensure we develop the best people.

Q: Was there resistance from your salespeople? Obviously, they wouldn't say it to your face, but did you sense it?

A: Sure. In the beginning, they said, "You mean I have to sell and do this too?" It's like night school. O.K., I have to check this box and do my day job too. I think it has taken me a couple of years to say this is your day job, and it can help you grow faster, and it can make you more money.

Q: What will GE be like five years from now?

A: There will be many more resources closer to the customer. We will be an embedded partner in how our customers make money. We'll be much faster to market in new products and services, and we'll be able to do it anywhere. And we'll be growing faster than our peers.

Q: Can you feel a difference already?

A: It has been about two and two-and-a-half years. When I go to the field today, the language is there. Every salesperson knows what they're expected to do. We're sharing best practices. But we're at a very early stage of what I see as a multiyear process. This has a lot of legs. I don't even see the end. EDITED BY Edited by Patricia O'Connell

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