CNBC: Fmr. Medtronic CEO: I’m Disappointed in How Zuckerberg Has Handled This
Mike Jackson, Event Solutions CEO, and Bill George, former Medtronic CEO, discuss the ongoing fallout for Facebook following the Cambridge Analytica data scandal.
This content was originally posted on CNBC.com on 3/22/18.
The PR Week 3.9.2018: Former Medtronic CEO Bill George
CNBC: Cigna Deal Feels Like 2 Jilted Lovers: Fmr. CEO Medtronic
CNBC contributor and former Medtronic CEO Bill George discusses health care consolidation and the latest deal between Cigna and Express Scripts.
This content was originally posted on CNBC.com 3/9/18.
CNBC: If You Have to Take a Position, Come Down on the Right Side
Bill George, former Medtronic CEO, and Jim Stewart, The New York Times, discuss what responsibility CEOs and other corporate leaders have in the gun control debate.
This content was originally posted on CNBC.com on 2/23/18.
HBSWK: Black Business Leaders Series: Oprah’s Path to Authentic Leadership
Oprah Winfrey believes in sharing the experiences that led her to become the wealthiest woman in the entertainment industry and the first African American woman billionaire. Professor Bill George traces her growth from childhood, focusing on how and when she discovered her true voice and how that authenticity spurred her career success.
Brian Kenny: See if you can name this person. North America’s first multibillionaire black person and the greatest black philanthropist in American history. Serial entrepreneur who combined business savvy with showmanship to revolutionize an entire industry. Recipient of the Presidential Medal of Freedom and honorary doctorates from Harvard and Duke. Author, publisher, Oscar nominee, but before all of that, rural Mississippian, born to an unmarried teenage mother, who endured poverty, abuse, and prejudice in the deep South. This is a true rags-to-riches tale about a person known and admired throughout the world by one name only: Oprah.
Today, we’ll hear from Professor Bill George about his case entitled, Oprah!I’m your host, Brian Kenny, and you’re listening to Cold Call. Bill George is an expert on leadership, a topic that he teaches and writes about extensively, including numerous books, articles, and business cases. Bill, thanks for joining us today.
Bill George: Thank you, Brian.
Kenny: I’m going to ask you to start by stating the obvious. Who’s the protagonist in this case and what’s on her mind?
George: Oprah Winfrey, and what’s on her mind is being responsible for your life and how you use your crucible for personal growth to achieve a great life.
Kenny: What prompted you to write this case?
George: Well, I was writing my book Discovering Your True North, and we had a section on crucibles and it seemed this captured it perfectly. And I had a chance to interview Oprah over dinner in 2005 at the Nobel Peace Prize ceremonies.
George: It was a rather unique opportunity to spend three hours alone with her. Photographers were coming by and snapping photographs. She didn’t even look up for them, and she wanted to tell me her whole story, going all the way back to her childhood, all the way to the fact that she had chartered an airplane filled with books to take to Africa, where she had started a home or a school for children and had spent 30 million of her own money.
“HER MESSAGE FROM THAT TIME FORWARD WAS, ‘YOU ARE SOLELY RESPONSIBLE FOR YOUR LIFE, AND YOU DON’T HAVE TO LIVE YOUR LIFE TO PLEASE OTHERS'”
Kenny: When you talk about a crucible, can you put a definition on that? What do you mean by a crucible?
George: Crucible is that really difficult time in your life, when you come face-to-face with who you are at your most basic form, the things that are really important in your life, but you only discover it when you’re faced with existential questions like, “Who am I? What’s the purpose of my life? Why am I here?”
Kenny: Let’s talk about Oprah’s past. I’m sure everybody would love to hear what she was like over dinner and I’m sure she was lovely, but probably also a little intense, given her stature in the world. So where does that come from? What were the formative things in her life as she was growing up?
George: She grew up an unwed mother, very poor family in Mississippi, and the thing that saved her was what she called BTU, Baptist Training Union. She would go to church and as young as three and four, she was citing biblical verses, and all the sisters sitting in the front row of an African American church, they were saying, “Oh, this girl is gifted,” and she got this idea that she was something special.
The thing that opened her life to the outside world was learning how to read because she had no exposure to the world outside of poverty in Mississippi and frankly, rank discrimination in those days. It was a very rough place to grow up, and this was her refuge.
Kenny: She was born in 1954. Is that right?
Kenny: In the deep South. Post World War II. Racial prejudice was still very, very common in that part of the country in particular. She migrated back and forth. Talk a little bit about her experience moving between homes.
George: Well, when she was nine, she went to follow her mother to Milwaukee, and that turned out to not be a good experience. She was sexually abused by relatives … so much so that she got to thinking, “Well, this is just the way life is.” That’s her statement. A real tragedy and she wasn’t prepared for this. At 14 she had an unwanted child, unfortunately, that died in child birth.
It was just a real tragedy to be abused like that and in those days we didn’t recognize or make public sexual abuse the way we do today. It’s a very good thing for this to come out. I think the behaviors of many of our celebrities, political leaders, and others are abominable. The treatment of women. It’s held women back from leadership roles in many sectors of our society and something that deeply concerns me.
This case gives some visibility to how you can deal with the incredible trauma that she overcame and turn that from a crucible into what we call post-traumatic growth.
You’ve heard of post-traumatic stress syndrome. Many people come back from wars and never recover. This is always on their mind, and … suicide, but I think if you could turn that trauma into growth, post-traumatic growth, you can become a great person like Oprah. That door is open for all of us.
Kenny: The case mentions what sounded very much to me like a “Me too” moment. You describe in the case where Oprah’s reading the opening entry in a book–again, back to the importance of reading in her life–and the author shares her own account of sexual abuse. That was a real eye-opening thing for Oprah.
George: She was actually on the set of a show with a woman named Truddi Chase. Oprah was 36 at the time; it’s important to recognize she was not a young woman, she was well into her career. Truddi Chase is actually holding a mirror up to Oprah by reciting her own experiences, which were virtually identical to Oprah’s, and this got Oprah so upset. She left the set, said, “Stop the cameras. Stop the cameras.” They didn’t stop. They kept rolling and eventually, she came back.
This was the first time that she realized that she was not responsible for what had happened. She realized this and that changed her whole career. Up to that point in time, she had been, I’d say, muddling along, doing well, but trying to be something different than she was. Earlier in her career, she tried to emulate Barbara Walters and she said, “Looking nothing like her,” and almost the absurdity of that. And then at 36, she said, “I can be who I am,” and her message from that time forward on her show was, “You are solely responsible for your life, and you don’t have to live your life to please others.”
Oprah’s weakness, which influenced her, even decades later, was that she felt she had to be a pleaser rather than being her own person, and when she encountered this situation with Truddi Chase, she changed. She said, “You don’t have to please people.” And she delivered that message to women and to men through her show. That gave her a sense of real power and to the people who had heard her. From then on, her career escalated very rapidly.
Kenny: In all of your experience meeting with leaders from all walks of life, is it fairly common to find that they have overcome [large] odds?
George: Well, no one can say they all did, but certainly, many of the greatest leaders of our lifetime did. Look at Nelson Mandela. Look at Martin Luther King. Look at what they overcame. Going back in the history, look at what Abraham Lincoln overcame.
I think those that actually have a deeper experience become more real and no longer feel they have to put on a mask to please the world. They can be their own person and be accepted as an authentic person.
This way of looking at life is core to my whole thought of authentic leadership. How can you behave as an authentic leader, be who you are, and not try to emulate Jack Welch or Oprah Winfrey or anyone else? Just be yourself and that’s good enough. You don’t have to fake it to make it.
Kenny: Do a lot of people rise to the CEO level without having figured this out? Like, they get there and they say, “How did I get here? What do I do now?”
George: They sure do. A lot of them are scared. They try to put on a mask to be powerful when deep inside there’s maybe a scared little boy inside that’s fearing rejection, fearing being overpowered. So they overuse their power and oftentimes reside in having a lot of money as being a sign of success, rather than how people perceive them in their organizations, people they work with every day.
I’d say a much greater criteria is, “Do they touch the lives of people in their own organizations every day through their actions? Do they set a standard of values and morals and commitment to a mission?” That’s what great leaders do. They don’t try to tell you how great they are. In fact, they know that they have a lot of weaknesses and vulnerabilities.
Oprah recognized her vulnerabilities and I think that enabled her to become a great leader because in a sense, vulnerability is power. She was no longer afraid of hiding these things. She’s been very, very public about what happened to her, and I think that’s been one of her great sources of strength that appeals to so many people.
Kenny: What is she like as a business leader? We see the public face of Oprah all the time in front of the camera and she’s remarkable in that way, but she’s leading a huge enterprise.
George: I haven’t really engaged her much as a business leader. I’ve engaged her as a human being and as a human being she’s amazingly warm and personable and real, extremely authentic, and I suspect that gets translated in her business life.
Kenny: You can also learn a lot from a leader when they are involved in some kind of scandal or controversy, and Oprah’s had her share because she’s such a public-facing image. What would you say about the way that she’s reacted in times of controversy that involve her or her charitable activities or things like that?
“WE NEED MORE LEADERS LIKE HER WHO ARE REAL AND OWN THEIR PAST, ARE OPEN ABOUT IT”
George: She’s responded very well, and I think she has every right not to kowtow to the forces that are critical of her. But she makes mistakes and she admits her own mistakes on set. If she offends someone or says the wrong thing, she admits it. She’s very real and very authentic, so I have nothing but the highest admiration for her.
I think we need more leaders like her who are real and own their past, are open about it, share openly, and become role models for other people that [show] you can be authentic and become highly successful, and you don’t have to sell out to powerful bosses and the powerful forces of money.
Kenny: She’s also found interesting ways to bring her own personal passions and the things that she cares about into her line of work. She’s been able to be a champion for causes, both in her work and also in her private life. Is this something that other leaders should try to do?
George: Yes, and that’s what makes her so successful is she does champion it, and you know that she’s there when she’s promoting the idea of reading. That’s a very noble thing, and we should all do that. There’s nothing wrong with bringing our passions and things we believe in. If you’re not passionate about your work, you ought to quit and go sit on the beach. I really do. If it’s just a job, you’re giving your best years of your life away.
A lot of people think you can’t be successful [this way]. I find just the opposite. People that are highly successful carry those beliefs forward and they’re reflected every day in their interactions with their customers and their employees.
Kenny: What kind of response did you get [when you discussed this case in class?] I’m sure people are excited to talk about it.
George: We have to get away from Oprah the celebrity and get to Oprah the human being. There’s a danger in a class like this that you focus on the celebrity status, not the person. When you show videos, you really focus on the human being side, and then you get down to what’s real about her and how did she deal with it. What can you learn from it and how can it influence you? You’re not going to be Oprah. You have to be Sarah or Charlie, you know?
Kenny: Bill, thanks for joining us today.
George: Thank you, Brian. It’s a privilege to be here and thanks for the great questions.
Kenny: You can find the Oprah case, along with thousands of others, in the HBR case collection at hbr.org. I’m your host, Brian Kenny, and you’ve been listening to Cold Call.
Transcript edited for length and clarity. Interview recorded December 12, 2017
This content was originally posted on HBSWK.hbs.edu on 2/2/18.
CNBC: We Need Employers to Step Up and Change Health Care
Bill George, former Medtronic CEO and CNBC contributor, and Ipsita Smolinski, Capitol Street managing director, discuss the health-care partnership between Amazon, J.P. Morgan and Berkshire Hathaway.
This content was originally posted on CNBC.com on 1/30/18.
HBSWK: Leadership Lessons from a Young Martin Luther King, Jr.
As the Montgomery Bus Boycott starts in the 1950s, the young Martin Luther King, Jr. faces challenges to his leadership goals, strategic vision, and personal and family safety. Professor Bill George discusses King’s early years and how they shaped his ability to respond with courage at his crucible moment—and how leaders today can find the strength to do the same.
“And I’ve seen the Promised Land. I may not get there with you, but I want you to know tonight, that we, as a people, will get to the Promised Land. So, I’m happy tonight. I’m not worried about anything. I’m not fearing any man. Mine eyes have seen the glory of the coming of the Lord.”
Brian Kenny: Dr. Martin Luther King, Jr. delivered those remarks in a now famous speech in Memphis on April 3, 1968. Everyone present felt the power of his words, but no one could have known just how prescient they were. The following evening, at 6:01, Dr. King was assassinated outside his room at the Lorraine Motel in downtown Memphis. Although he was just 39-years-old at the time of his death, the autopsy revealed that he had the heart of a 60-year-old. Thirteen years leading the civil rights movement, suppressing the fear that accompanied daily threats of violence towards him and his family, had clearly taken its toll.
Today, we’ll hear from Professor Bill George about his case entitled Martin Luther King, Jr.: A Young Minister Confronts the Challenges of Montgomery.I’m your host, Brian Kenny, and you’re listening to Cold Call.
Bill George is an expert on leadership, a topic that he teaches and writes about extensively, including numerous books, articles, and business cases. He’s also the former chairman and chief executive officer of Medtronic, and he’s the author of this really wonderful case that we’re going to discuss today. Bill, thanks for joining us.
Bill George: Thank you, Brian.
Kenny: I can’t imagine there’s anybody listening who isn’t familiar with the legacy of Martin Luther King Jr. He’s obviously one of the icons of American history, and all of the contributions that he made to our country. But, I’ve learned a lot from reading the case about his background and kind of what was maybe behind the scenes that people didn’t know about him. I would ask you maybe just to set the stage for us, how does the case begin, Bill?
George: The case is set about 12 years before that Mountaintop speech, back in January of 1956. This is about two months after the famous incident with Rosa Parks, when she refused to move to the back of the bus. That led to the formation of the Montgomery Improvement Association, where Dr. King was nominated four days later as the president. He was only 26-years-old, a very young man to say the least.
But, he is in a fearful place. He has just gotten a death threat on his phone, using the N-word, telling him to get out of town. He says he gets about 30 or 40 death threats a day in those days. So, it was a very, very rough time in Montgomery, Alabama. I went to Georgia Tech in the early 60s, and it was a little bit better by then, and certainly better in Atlanta than it was in Alabama. But, a rough time for everyone, and certainly for any African American.
Kenny: So, he’s turning this invitation over in his mind and thinking about the implications. I’m curious, Bill…what prompted you to write a case about Martin Luther King?
“HE ACTUALLY GETS DOWN ON HIS KNEES AND PRAYS, AND ASKS GOD TO LET HIM OFF THE HOOK”
George: Well, at the time, I was introducing my new course Authentic Leadership Development, and one of the things we talk a lot about are crucibles that people face. Dr. King at this time was facing perhaps the greatest crucible of his life that set the stage for everything that followed. You know, he actually had no intention of being a civil rights leader. His desire was to be a great minister, and he had been extremely well schooled, certainly for an African American in those days. He’d gone to Morehouse College at the age of 15. By the way, my [HBS] colleague David Thomas just became the new president of Morehouse.
He had gone on from there to Crozer Theological Seminary, then elected to go north to Boston University to get his PhD, a very famous school at that time as well. He had married Coretta Scott and had a daughter. But, his great goal was to take over daddy King’s church, Ebenezer Baptist Church in Atlanta, and he had no idea of being a civil rights leader. He was thrust into this. He said if he had more time to think about it he would have said, “No way I can do this, I’m just a minister.” But, he got asked to do this.
So, at the time of the case, he is fearful, afraid of what’s to come and pleading with God to let him off the hook because he says, “I have no courage, I am weak, and I want to get out of here. I just can’t do this.”
Kenny: You mention his father, what was his childhood life like? What were the sort of things that shaped him?
George: He grew up in a middle class environment, so he had a reasonably good environment. His mother taught him self-respect, his father was a strict disciplinarian who would engage in whippings in those days. But, at age six, he was playing with a white friend of his, and his parents told him, “You can’t play with my son ever again.” He said he resolved, at that point, to hate all white people. Then, his parents said, “No, no. You don’t understand. You’re a Christian and that’s not what Christians do. We love our enemies, we love people, and you must change your point of view.”
So, that was a very positive environment he grew up in. But, meanwhile, around him, there was a tremendous amount of racism.
Kenny: You mention the fact that he went to college at a young age, but he talks about the fact that when he got there, even though he had graduated from high school, he was only reading at an eighth grade level.
George: That’s right. He had some very famous teachers: Dr. Benjamin Mays, Dr. George Kelsey. Mays was then president of Morehouse, but they all became mentors to him, and they were ministers that really encouraged him to serve humanity through the ministry.
Kenny: They also encouraged him to continue his education, which was highly unusual at that time, right?
George: Well, certainly for a minister as well. I mean, if an African American was fortunate enough to get into medical school or law school, probably in the north, that was one thing, but ministers … And he almost didn’t want to go into ministry because he saw most African American ministers were not educated, and he was a real scholar. His sermons are filled with great depth of biblical knowledge, and he had really become quite famous, well before he got to Montgomery, for speaking around the country at Baptist churches.
Kenny: I think it’s also interesting because the case starts to shine a light on the person that was Dr. King, and some of his own insecurities. Can you talk a little bit more about some of the insecurities and the fears that he had, that maybe led to his crucible moment?
George: Well, remember he’d gone from Morehouse, which was a historically black college, to Crozer, which was predominantly white, as was Boston University. There were just a handful of blacks there. In a sense, he felt he had to do everything perfectly. He had to show up on time, he had to be well prepared, he had to do much better than his fellow white students in order to be accepted, and so he was extremely careful to do those things and not get himself in any kind of trouble, or not fall short. In some ways, I think he felt like he was a role model for other African Americans who might follow in his footsteps.
Kenny: Of course, we know he didn’t do all of this alone. Coretta Scott King was a hugely important influence on him. What made them such a good team, and I wonder could he have been as successful without somebody like Coretta Scott King kind of pushing him from behind?
George: I think perhaps not. She was a great partner for Dr. King. She was a scholar in her own right, she had studied music, had a great singing voice. She basically gave up her career to support him in going to Montgomery, and she was a real partner. But, he always said she was the stronger of the two. He felt he was weak and that she was the one that would stand behind him and give him the strength to take on these leadership roles.
The crucible we speak of here, Brian, is really a turning point in his life, which he had to make the call: did he stay in the ministry as a minister in churches, or did he use his ministry as a calling to help African Americans and attack the problem of racism? He actually gets down on his knees and prays, and asks God to let him off the hook and not have to do that. He said, “I just can’t take it alone.” I think he knew he needed his support from above as well as from his wife, Coretta, to go forward into this very troubled, very violent environment.
Kenny:In your experience, having talked and worked with leaders of all kinds, how common is that? My guess is that most leaders aren’t able to do it alone and they need somebody to help them, and they need to be willing to accept help from other people.
George: Exactly. Particularly, a lot of people try to act like they can do everything themselves, but they need help. The higher up you go in leadership, the lonelier it gets, the fewer people you can talk to, the fewer people you can look to for support, and you need that support team around you. But, I’ve found, Brian, that almost every great leader goes through these crucible moments, like Nelson Mandela did, even Jim Burke and Tylenol, the second time around, was very fearful. You don’t know what’s happening, and you need people around you to support you and be there for you, or to give you the courage to step up. Perhaps not be shot at like Dr. King was, or put in jail for 27 years like Mandela was, but certainly to be attacked and criticized from all sides. That takes enormous courage, which really is a distinguishing characteristic of great leaders like Dr. King.
Kenny: Even in the excerpt that we at the opening of the podcast here, he was very fearful, right up until literally hours before he was assassinated, but he was able to overcome those fears and kind of push forward, and I guess compartmentalize that kind of thing. You know, as we look around the world today, I’m wondering are there people who are able to step up and play that kind of a role?
George: Well, in the business community today we have leaders with enormous courage. As you know, we have a very powerful president of the United States, and we have people that are willing to stand up to him and do the right thing by their companies. I’m thinking somebody like Mary Barra at General Motors, where they’ve said you can’t have a supply chain that goes around the world. Well, she’s plunging full speed ahead and doing just that.
“HE FELT HE WAS WEAK AND THAT [CORETTA] WAS THE ONE THAT WOULD STAND BEHIND HIM AND GIVE HIM THE STRENGTH TO TAKE ON THESE LEADERSHIP ROLES”
In the UK, Paul Polman, the CEO of Unilever, was attacked by the Brazilian firm 3G–tried to take him over. He has been the great advocate for sustainability. I read his posts every day, he has not backed off one bit because he knows how important this is and he believes very deeply that companies that do the right thing by sustainability will perform better.
So yes, I think we have a lot of business leaders. Indra Nooyi at PepsiCo is another one. Alan Mulally who was at Ford. We have some leaders of great courage today, and I am very encouraged by the kind of leaders we’re turning out in the business community, that have risen to the top and realized their role goes well beyond making the numbers to satisfy their shareholders, but they have to do something to really make a difference in the world, through the power that’s vested in them with their companies.
So it’s quite analogous to Dr. King and what he did.
Kenny: That’s great to hear. It gives me more confidence, I guess, going forward. So, you’ve discussed this in class, I’m guessing, with both MBA students and probably executive education participants. How do people react to reading about Dr. King?
George: Well, they’re very moved. Of course, I try to put this issue back to them. When have you faced a situation where you were scared, you wanted to get out, and wanted to be let off the hook for your leadership roles? Are you prepared for this, and how prepared are you? I think that’s a really important thing, not just to think about it like a great leader, like Dr. King, but let’s take it down to ourselves, and how does it affect me.
All of us have had a crucible. I’ve had students tell me that they too were not allowed to play with white children in their neighborhood, and how crushed they were, and how they carried that with them until they were at HBS, which was 20 years later, and how impactful that seemingly simple experience was. So, these things are very formative in peoples’ lives, and I think it’s important that our students at HBS, and other people studying business, get prepared when they do have to step up to the big one. Because if they aren’t prepared for the ones that come earlier in life, they will not be prepared when they get the really big challenge.
Kenny: Really, really great lessons, Bill, and a terrific case. Thank you for discussing it with us.
George: Well, thank you for giving me this opportunity. I am thrilled that we are honoring Dr. King every year on the anniversary of his birthday, because what could be more important? What a great leader he is, and we need to venerate the great leaders of our time, like Dr. King.
Kenny: You can find the Martin Luther King, Jr. case, along with thousands of others, in the HBS case collection at hbr.org. I’m your host, Brian Kenny, and you’ve been listening to Cold Call, the official podcast of Harvard Business School.
Recorded on January 10, 2018. Transcript edited for length and clarity.
This content was originally posted on HBSWK.edu on 1/12/18.
CNBC Appearance: Innovation is Key to Solving America’s Health-Care Problems
- Innovation can solve many of our most pressing health-care problems by making the delivery system more efficient.
- Breakthrough drugs can help treat disease, but prevention and better use of information can also go a long way.
- Radical transformations can help keep Americans healthier outside of political solutions.
This content was originally on CNBC.com on 12/7/17.
NPR: GE Struggles To Show It Still Has Magic Touch
Listen to the Podcast here.
When General Electric’s new CEO John Flannery spoke to investors and analysts last month, he acknowledged things are bad.
“I was forced to confront a lot of sort of deeper questions about this company,” he said. “Why do we exist? How do we impact the world for the next 100 years the same way we have for the last 100 years?”
General Electric is one of the most storied corporations in American history, co-founded by Thomas Edison and re-defined by legendary CEO Jack Welch.
For more than a century, GE’s products — from dishwashers to MRI machines — changed the way Americans live. But now the company is in deep trouble. Its stock price plummeted over the last year, losing more than 40 percent of its value while the market as a whole soared.
To get a sense for just how shocking the decline at GE is, NPR traveled to Schenectady in upstate New York, headquarters of the company’s power and energy division. Five thousand GE employees live and work here and it’s a place where magic used to happen.
Bill Buell, a local newspaperman who has written for years about GE and the company’s history, points to the place where Ernst Alexanderson lived. “[He] did the first television broadcast anywhere in the U.S. right here in his home here.”
Schenectady’s boom years started in the 1890s when Thomas Edison built laboratories and factories here.
For more than a century, GE’s global operations seemed unstoppable. The company built everything from TVs and dishwashers to jet engines and power grids. It became one of the most reliable market performers, while reshaping American culture.
Along the way, the company’s scientists won two Nobel Prizes. The cursive GE logo and “we bring good things to life” catch-phrase seemed as much a part of the nation’s identity as Coca-Cola or McDonald’s.
Bill George, former CEO of Medtronic and a fellow at Harvard Business School, said GE helped invent America’s corporate culture.
“Throughout my lifetime, GE has been the leader in coming out with new ideas, new organization structures and has always been 5 to 10 years ahead of everyone else. So all the rest of the corporations looked to them for setting the standards,” George said.
The last decade, however, that storied history seemed to unravel. Bold new products stopped appearing. The company was hit hard by the financial crisis and whole divisions — including the broadcast network NBC — were sold off. Other corporations, like Amazon, Apple and Google, moved to the center of corporate culture.
In the past year, GE’s stock has plummeted and Flannery was forced in November to slash the company’s dividend by 50 percent. “We understand this is an extremely painful action for our shareholders, our owners,” he said.
Flannery’s plan for reinventing GE is focused on simplification. He says the company will sell off $20 billion in assets, including the lighting division, which means that Thomas Edison’s company will no longer make light bulbs.
GE will now focus on three major product lines: energy, aviation and medical technology.
So far, a lot of analysts, including Bill George at Harvard, say they’re not impressed.
“GE could become a typical industrial company and perform reasonably well,” he said. “But that’s not the GE we knew.”
It’s not that people doubt GE can still make and sell good products. This remains one of the biggest corporations in the world, with nearly 300,000 employees. But George says investors once looked to GE for something bigger, more exciting.
During his mid-November call with analysts, Flannery asked them to withhold judgment and to give GE one more shot. “It’s a heavy lift but I think for our teams this is really the opportunity of a lifetime to reinvent an iconic company,” he said.
Bill Buell, the newspaperman in Schenectady, agrees there’s a lot at stake, not least for places like his home town. In the 1980s, GE employed more than 25,000 people here, but wave after wave of layoffs has reduced that number to 5,000, and people are afraid.
“I know right now they’re worried about people losing their jobs. It’s a pretty sad story,” Buell said. “Hopefully it won’t get any worse than it is.
Flannery hasn’t released details, but part of his reorganization plan involves cutting $2 billion in annual operating costs, with much of that savings stripped out of the company’s power and energy division, headquartered right here in Schenectady.
LULU GARCIA-NAVARRO, HOST:
President Trump may announce this week that the United States will recognize Jerusalem as the capital of Israel. Also on the table, the eventual relocation of the U.S. embassy from Tel Aviv, where it’s been for over 50 years, to Jerusalem. Those would be enormously controversial moves with profound implications should they happen. To talk about why, we have Aaron David Miller. He’s the director of the Middle East program at the Wilson Center. He’s also a former State Department Middle East negotiator. Thanks for coming in.
AARON DAVID MILLER: Always a pleasure, Lulu.
GARCIA-NAVARRO: So Palestinians want Jerusalem as the capital of their future state, so the city’s fate is profoundly intertwined with the peace process. What’s your view on this announcement, should President Trump make it?
MILLER: You know, worked for half a dozen secretaries of state. My advice to all of them was always the same when it comes to Jerusalem. Don’t mess around with it. Don’t fool around with it. It’s a tinderbox waiting for a match. And the reality is, we’ve skirted the issue these many years. The argument for an Israeli embassy – a U.S. embassy in west Jerusalem is compelling, no question about it. The issue is timing and the implications of such a move. And the president on Wednesday presumably is going to announce that the U.S. recognizes Jerusalem or west Jerusalem – a tricky issue in itself – as capital of the state of Israel.
GARCIA-NAVARRO: And if he does that, what do you think the ramifications will be?
MILLER: I mean, it’s hard to say with respect to violence. It’s impossible to predict. The reality, though, is it…
GARCIA-NAVARRO: Palestinians are warning against the move, saying that there will be a violence – Hamas in particular – and that it will be the end of the peace process.
MILLER: Well, if Hamas and the Islamic jihadis were looking for an issue to exploit, this would clearly be it. And violence, essentially, has been the story many times – 1990, 1996, 2000, most recently over metal detectors on Haram Sharif – Temple Mount. My take on this is quite simple. There is simply no compelling U.S. interest to deal with Jerusalem at a time when Israelis and Palestinians have zero trust and confidence in one another, at a time when the president of the United States is pursuing his ultimate deal and when he wants to involve key Arab states, Jordan and, particularly, Saudi Arabia, to facilitate and help Israelis and Palestinians in a negotiation. I don’t see the logic. I don’t see the timing. I think it’s driven largely by the fact that the president of the United States is tired of certifying. He’s got campaign commitments he’s made. And frankly, he also is in a position – I suspect psychologically – where he can do this, and he’s going to.
GARCIA-NAVARRO: Is there a chance that this may be part of a wider plan? We have the president’s son-in-law Jared Kushner, who has been tasked by Trump to deal with this issue. And there are reports in Bloomberg that he may have cut a deal with Arab powers in the region, namely Saudi Arabia, to fund a Palestinian state. Could this be part of a bigger picture?
MILLER: I mean, is it possible there’s a compelling coherent strategy that’s going to be revealed sometime early next year? Perhaps. It’s just the issues that separate the parties, Jerusalem border security, refugees, recognition of Israel as the nation state of the Jews, end of conflict in claims. The gaps on those issues are huge. And why an administration, even if it had such a compelling plan, would want to inject Jerusalem into the mix right now is difficult for me to understand. I met Mr. Kushner several months ago, and I told him, I wish my father-in-law had as much confidence in me as his father-in-law appears to have in him because he’s given him literally mission impossible, if not mission improbable. And at the same time, he is the repository. President’s son-in-law is the repository of an issue that is usually, normally accorded to the secretary of state. And that in itself, in many respects, becomes problematic.
GARCIA-NAVARRO: Aaron David Miller of the Wilson Center, thank you so much.
MILLER: Thank you so much, too.
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