How does a company become successful and stay successful? Certainly not
by playing it safe and following the traditional ways of doing business! Taking a
strategic risk is what General Electric (GE) did when it launched its Ecomagination
strategic initiative in 2005. According to Jeffrey Immelt, Chairman and CEO:
Ecomagination is GE’s commitment to address challenges, such as the need for cleaner,
more efficient sources of energy, reduced emissions, and abundant sources of clean water.
And we plan to make money doing it. Increasingly for business, “green” is green.
1
Immelt announced in a May 9, 2005, conference call that the company planned to more
than double its spending on research and development from $700 million in 2004 to $1.5 billion by 2010 for cleaner products ranging from power generation to locomotives to water
processing. The company intended to introduce 30 to 40 new products, including more
efficient
lighting and appliances, over the next two years. It also expected to double revenues from
businesses that made wind turbines, treat
water, and reduce greenhouse-emitting gases to at
least
$20 billion by 2010. In addition to working with customers to develop more
efficient power
generators, the company planned to reduce its own emission of greenhouse gases by 1% by
2012
and reduce the intensity of those gases 30% by
2008.
2
In 2006, GE’s top management informed
the many managers of its global business units that in the future they would be judged not only
by the usual measures, such as return on capital, but that they would also be accountable for
achieving corporate environmental objectives.