GE adapts marketing model

04 October 2010

NEW YORK: General Electric is treating marketing as a "critical function" for the first time, in recognition of its crucial role in driving growth.

Beth Comstock, GE's cmo, joined under former ceo Jack Welch, who concentrated its communications output on certain sectors like plastics and appliances, but emphasised expansion via acquisition.

"For the time he ran the company, it was very much a focus on acquisitions and growing largely from acquiring businesses, and not necessarily the focus on 'How do we grow from within?'" Comstock told the Harvard Business Review.

Jeff Immelt took over from Welch in 2001, and has revolutionised the organisation, pushing up sales through internal initiatives like the Ecomagination clean energy programme.

"He said we're going to do that by being more global, being ore innovative and investing more than technology than ever, and being more customer-focused, more market-focused," added Comstock.

GE's marketing division was thus handed a "revenue-generating role in its own right", based around the notion of "commercial innovation."

In demonstration of marketing's heightened importance, worldwide staffing levels doubled from 2,500 people in 2003 to 5,000 at present.

Immelt also created chief marketing officer positions for all GE units, providing in-depth training when required.

However, the recession led to a major reappraisal pf the company's approach to this aspect of its operations in a minimal growth environment.

More specifically, it conducted a "Maturity Evaluation", an in-house "self-audit" tracking eight capabilities extending across strategy, sales force effectiveness, market knowledge and targeting.

This process encompassed 35 individual skills and 140 definitions of success, and revealed there was inconsistency in performance and uncertainty about which abilities were integral.

In response, approximately 30 senior marketers established new standards, and the talents vital to meeting common challenges.

They divided these eight core activities in to two groups, in the form of "go-to-market" tasks like segmentation, and "commercial essentials" covering elements such as branding and communication.

Ultimately, four key assignments for marketers were identified, including "instigators" who disrupt the status quo and "innovators" that transform insights in to goods and services.

"Integrators" engage with other divisions, and "implementers" are responsible for executing ideas.

The Maturity Evaluation is on-going, offering an objective way to measure results and allowing comparisons across GE's diversified portfolio.

An example of how this scheme has worked in practice is turning GE's medical arm into a "home health" pioneer, which would not have happened before, when it typically acted as a "technology pusher."

"We had a tendency to develop products because we could do it and not because they were wanted in the market," said Jean-Michel Cossery, cmo, GE Healthcare.

Thomas Gentile, vp, engine services, GE Aviation, argued a similar shift characterises his unit, which operates against a limited number of competitors and in an industry with unique features.

"We didn't really know how to translate what we knew about customers into the next growth idea," he said.

Elsewhere, GE Capital held a weekly "war room" at the start of the downturn, featuring 20 executives from the ceo to general counsel, reacting to changing conditions.

"At first the war room was a process, but it's since become more of a mentality for making commercial decisions and for instilling accountability," said Lee Cooper, cmo, GE Capital.

"It's become part of our culture."

GE also now taps its top 50 up-and-coming marketing "rock stars", providing additional coaching and career counselling, and including them in planning process for the department's future, Comstock added.

Data sourced from Harvard Business Review; additional content by Warc staff