EU News Digest Latest News & Updates
Smith Collection/Gado | Archive Photos | Getty Images
Close-up of sign for GE Digital, a division of General Electric, in the Bishop Ranch office park in San Ramon, California.
General Electric’s stock surged Wednesday after the company raised its 2019 cash flow forecast and reported adjusted third-quarter earnings and revenue that topped analysts’ expectations. In premarket trading, GE shares jumped 8.1% from its previous close of $9.07 a share.
On the whole, though, GE reported a consolidated net loss of $9.5 billion for the third quarter. While improved from a $22.8 billion non-adjusted loss for the same period last year, the bottom line reveals that the 127-year-old company is still struggling.
The company, of course, has been affected bythe grounding of the Boeing 737 Max, but it is also grappling with another major challenge: executing a digital transformation.
One of the earliest movers to try to try to bring digital in and remake themselves, GE failed at its initial attempts, learning that not only are large companies resistant to change but that a digital transformation is less about a technology change and more about a cultural change.
GE is not alone: A surprising number of transformation efforts are failing, even at some of the world’s most profitable, innovative organizations.
Last year companies poured $1.3 trillion into transformation initiatives, 70% of which — or $900 billion — was wasted on failed programs at companies like GE and Ford. Among those that didn’t fail outright, only 16% saw improvements in their performance and ability to sustain change over the long haul. Even for digital-first industries like high tech, media and telecom, only 26% saw success.
Much has been written dissecting the reasons for digital transformation failure — most experts have settled on people/employees, organizational culture and leadership as weak links. But few acknowledge the real common thread: communication breakdown.
