The last major GE factory in Winchester VA, that was making ordinary incandescent light bulbs in the United States is closing this month, marking a small, sad exit for a product and company that can trace their roots to Thomas Alva Edison’s innovations in the 1870s. This was reported by the Washington Post on September 12, 2010.
Remember we all learned our first lesson in entrepreneurship when we studied that Thomas Edison invented the light bulb. We grew up with it. It helped change the life of Americans for generations. This iconic American invention will now disappear from the American landscape.
The Post reports that “what made the plant here vulnerable is, in part, a 2007 energy conservation measure passed by Congress that set standards essentially banning ordinary incandescents by 2014. The law will force millions of American households to switch to more efficient bulbs resulting savings in energy and greenhouse-gas emissions are expected to be immense.”
What’s ironic is that they will be replaced primarily with compact fluorescents (CFLs) and sadly no American manufacturer produces CFL’s. Why?
After the 1973 energy crisis, a GE engineer named Ed Hammer and others at the company’s famed Nela Park research laboratories were tinkering with different methods of saving electricity with fluorescent lights. But GE decided not to develop and market CSLs. So though they were first developed by American engineers in the 1970s, none of the major brands make CFLs our country.
That torch will now pass to China. Why? Because as the reporter points out, Ellis Yan, a Chinese immigrant to the United States, who had started his own lighting business in China, in the early ’90s turned his attention to the possibilities of CFLs.
“Everybody in the industry stayed back and was watching me,” he recalled. “No one else wanted to make the big investment for the next generation of technology.”
The business prospered and Yan’s factories in China employed as many as 14,000.
This is a story of the failure of entrepreneurship at one of the world’s leading American companies.
How was it possible? Time and time again companies that resist changes in the marketplace do so at the peril.
As business owners or leaders you can well understand the insights of scientists to the process of change”.
“It is not the strongest of the species that surprise, nor the most intelligent, but the one that is the most responsive to change”. This was from Charles Darwin scientists writing in the Origin of Species.
If you doubt how the world response to change ask yourself why we have lush green forests and deciduous trees in Wisconsin, but in the deserts of Arizona are filled with cactus plants that need little water? That didn’t happen by accident, as each adapted to the change is in its environment.
Effective business leader realize survival requires change and adaptation to the continual challenges of a market economy.
Professor John Kotter of the Harvard Business School captured it best when he said:” Truly adaptive firms with adaptive cultures are awesome competitive machines. They produce superb products and services faster and better. Even when they have far fewer resources and patents or less market share, they compete and win.”
Contrasts that with the advice of Niccolo’ Machiavelli, famous political scientist writing in the Prince:
“It must be considered that there is nothing more difficult to carry out, no more doubtful of success, nor more dangerous to handle, than to initiate a new order of things”.
Who was right?
They both are. Change is inevitable. It’s how you bring about change at your company which will spell success or doom for your business.
Now what you do about it? How do you get your management team or even yourself personally to embrace change and generate creative and effective solutions to the challenges facing your company? The temptation to do “business as usual” is overwhelming. After all, it’s worked in the past, why shouldn’t work in the future?
The most critical step is to start is facing what has been called by Professor Kotter “the brutal facts”. Get your management team to step back in a planning session and ask them:
- What’s happening to our markets? What our competitors doing that we are not
- What technological shifts have occurred that we did not anticipate?
- What do we see on the horizon?
- What our customers telling us about opportunities they see coming?
GE’s team needed to look hard at what was happening in the oil markets and the growing demand for energy conservation.
This requires homework and talking to customers. Assign somebody or a team to scan the environment and lay out the facts.
When you meet make one ironclad rule: nobody is allowed to say “I think”. Focus on brutal facts and changes in your markets. What will be happening in the next five years?
My investment networks The Successful Entrepreneur Investors helped capitalize Helios USA. The President Steve Ostrenga will manufacture solar panels right here in Milwaukee in the Menomonee Valley. Here’s a startup company getting ahead of the curve.
The value of facing the brutal facts is it helps people except the reality that change is coming. It gets your management team to recognize the need to be creative and think through new solutions to the problems that customers face and to explore new opportunities.
Failure to get the brutal facts on the table and get a consensus as to the realities hitting the business can be fatal. People will oppose new initiatives unless you’ve laid the groundwork for getting them involved in understanding the consequences of doing nothing.