When GE realized that its products would no longer sell themselves, it had to invent a formidable marketing function from scratch. by Beth Comstock, Ranjay Gulati, and Stephen Liguori
90 Harvard Business Review October 2010
ILLUSTRATION: GARY NEILL
ust 10 years ago General Electric had no substantial marketing organization. For decades the company had been so confident in its technologies that it seemed to believe the products could market themselves. People designated as marketers were assigned to sales support (lead generation and trade shows, for example) or communications (advertising and promotional materials). In discussions about corporate strategy, marketing wasn’t at the table. At best it was considered a support function; at worst, overhead. In a few GE businesses, such as appliances and the former plastics unit, marketing was a viable contributor; but in most of the others, its brilliant minds were languishing in dead-end jobs. Many internal skeptics did not see how marketing as a function could help GE grow its businesses. Take GE Aviation, the multibillion-dollar division that develops and manufactures jet engines for commercial and military aircraft. The commercial aviation industry is relatively simple: a handful of aircraft manufacturers, two GE competitors (Rolls-Royce and Pratt & Whitney), and about 300 airlines. “You could put the entire industry in a conference room— it’s that compact,” says Thomas Gentile, the vice president of engine services for GE Aviation and a former chief marketing officer at GE Capital. “So the challenge was how could market research really help us? Because we could literally pick up the phone and call everyone in the industry who mattered and find out what was on their mind.” But things were changing. The businesses were maturing, and like other companies, GE was learning that it could not win simply by launching increasingly sophisticated technologies or by taking existing technologies to new markets. Some of its best-thought-out new offerings were fast becoming commodities. Even executives within a business like Aviation were having trouble making sense of a rapidly changing industry. Fuel prices were volatile; demand was slowing; stronger regulatory oversight was around the corner. How could the business remain competitive and also prosper? “We didn’t really October 2010 Harvard Business Review 91
UNLEASHING THE POWER OF MARKETING
know how to translate what we knew about customers into the next growth idea,” Gentile admits. GE’s solution was to focus on growth from within, across all businesses—a shift from the past, in which the top line was grown primarily by acquisition and the bottom line by seeking out efficiencies. The refocus ushered in a strategy fueled by technology, innovation, global markets, and stronger customer ties. To succeed, GE would need a marketing engine that drove more-direct collaboration with customers and led to new markets—one with standards as rigorous as those for functions such as finance and human resources. CEO Jeff Immelt issued a mandate that marketing should be a vital operating function across GE that spurred organic growth. Recognizing that marketing was vital to all GE units was one thing; acting on that recognition was an entirely different matter. The marketing team took on the challenge of identifying and clearly codifying the modern-day skills it needed. We had to define what success would look like and describe how we would measure results. At the time, GE had no
ready or consistent way of calibrating marketing efforts across units, markets, or business models, and we couldn’t find one in any textbook. Perhaps most challenging, we had to identify and develop leadership capabilities in our team, whose track record was uneven at best. In the process of creating what we believed would be the definitive marketing function, we arrived at new ways of thinking about...