Newswise — It's always a challenge following a famous CEO when it's your turn to run one of the world's largest companies. It's even tougher taking over in a rapidly evolving, globalizing economy undergoing a tumultuous worldwide reshuffling of currencies, asset valuations and debt structures.
With that backdrop, General Electric CEO Jeff Immelt had plenty to share during a speech on campus to more than 300 students and faculty from USC's Marshall School of Business and Viterbi School of Engineering.
GE has designated USC a partner school, because it hires so many Trojan graduates, some 350 already. A tall man whose big shoulders betray his football-playing youth, Immelt was both relentlessly self-confident and entertainingly self-deprecating in his first USC appearance.
He pointed to three major economic factors currently affecting his and every other company: "¢ a housing industry "in a tough way," so much so that it likely will slow the U.S. economy for the next two years;"¢ a still-healthy economy elsewhere in the world;"¢ a liquidity problem that has dried up access to capital and financing for many companies and consumers.
"This is the fourth correction I've been through in the last 25 years," Immelt said. "It's never pretty but we'll get through this, like everything else. My job is, (whatever happens), GE succeeds."
In response, General Electric is focusing its $175 billion worth of operations on what Immelt called "six big themes:" "¢ Infrastructure " everything from roads to refineries to desalination plants " needs to built or rebuilt worldwide. That's a $70-billion-a-year business for GE; "¢ Emerging markets. For the first time in GE's 125-year history, it will generate more revenues from outside the United States than in it. "This is going to be your future," Immelt told students. "No matter what industry you go into, it's going to intersect with these emerging markets. You inherently have to be a global thinker." "¢ Environmental technology. GE's "Eco-magination" initiative has jumped from a $6 billion business in 2004 to a $14 billion business now. "It's going to be one of the key growth technologies of the future," Immelt said. "I'm not inherently green, but the whole notion of environmental sensitivity has moved mainstream." "¢ Investing in demographics. A third of the United States population will be over 65 by 2025, and the situation is even grayer in major economies such as the United Kingdom, Japan and Germany. "It's good to be long in healthcare and consumer finance," Immelt said. "Healthcare is going to be 20 percent of GDP; right now it's 14 percent." "¢ Digital connections. The company already makes $1 billion a year from its online operations, but those technologies will transform the workflow of every business over time. "¢ Accessing global capital. The rise of sovereign wealth funds " large financial operations controlled by countries flush with some $15 trillion in export and oil revenues " will change where companies look find the financing for their big investments. It no longer will be Wall Street.
To take advantage of these six large trends, Immelt said he has to be a risk taker on behalf of his company. And anyone wanting to find their way forward in their career also will need to take risks, though he said too many MBA students are "not independent-thinking enough and are risk averse."
The better path is build a deep competency in one's chosen field, "seek out great teams," and be willing to be unique and different.
"You didn't get a great USC education," said Immelt, "so you can play it safe."
About the USC Marshall School of Business Based at the crossroads of the Pacific Rim, in Los Angeles at the University of Southern California, the USC Marshall School of Business is dedicated to training global leaders to make a difference. USC Marshall is the best place to learn the art and science of business.
The school's complete array of programs annually serve more than 5,000 undergraduate, graduate, professional and executive-education students, who attend classes at the main University Park campus in Los Angeles, and in satellite facilities in Irvine and North San Diego County.
In conjunction with Jiao Tong University in Shanghai, USC Marshall also operates a Global Executive MBA program in China. Marshall's many highly ranked programs and centers of excellence include the Leventhal School of Accounting. For more information, go to www.marshall.usc.edu
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