June 9, 2006
News & Opinion: Book Quote of the Year
General Electric CEO Jeff Immelt says in Harvard Business Review this month:
"The business book that can help you has not been written yet."
He is referring to the message he sent to his managers at GE's annual Boca Raton meeting. Immelt's singular goal is growing the $150 billion company at 8% a year. He says nothing like this has been done at a company of this size.
There is a fair amount of research to show that once a company makes the Fortune 50, growth pretty much stops.
If I were to be so bold, I would recommend Clay Christensen's The Innovator's Solution. From the book:
Growth is important because companies create shareholder value through profitable growth. Yet there is powerful evidence that once a company's core business has matured, the pursuit of new platforms enatils daunting risk. Roughly one company in ten is able to sustain an above average increase in shareholder returns over more than a few years...Consequently, most executives are in a no-win situation: equaity markets demand that they grow, but it's hard to know how to grow.
(Hat tip to Michael Mauboussin, he uses this quote on page 199 of More Than You Know).