Sept. 20, 2005
Changing World Requires Risk-Taking Growth Leaders
By Sandie Taylor

“Imagine,” General Electric executive Juan Mogollon urged. “What would happen if the United States had to compete with China for natural resources?”

According to Mogollon, GE Global Commercial Vice President for Equipment Services, it’s not really a matter of if, but a question of when and how. In his talk Sept. 15, “Leadership and Execution in a Global Arena,” Mogollon contended that GE’s success in competing in a global market depends on two aspects—driving growth at GE and building growth leaders.

Driving Growth
The two initiatives were introduced in GE’s 2004 annual report and letter to stakeholders, embracing a new goal to increase its organic growth revenue—revenue produced from a company’s products and services rather than from acquisitions, tax gains or foreign currency translation—from 5 percent (GE’s current growth rate) to 8 percent each year.

“To put it in perspective, that’s like adding two companies like Nike and Pepsi to our portfolio every year,” Mogollon explained at this year’s first MBA Executive Speaker Series event.

To achieve this extraordinary growth rate, GE keeps its eye on global trends. “If you understand the merging trends, you will see the opportunities that exist,” he said.

In response to macro trends such as a growing world population, global competitiveness and a heightened pressure on natural resources, GE has narrowed its focus on entering new markets and finding local talent to provide leadership in those countries—many of which are in Latin America.

While this area of the world remains risky territory for businesses worried about Latin America’s unstable governments, Mogollon believes two elements are about to change American companies’ reluctance. First, China will soon be the number one consumer of natural resources in the world. And what may be even more compelling—Brazil has the natural resources and Venezuela offers the oil that both China and the U.S. need.

“You have to be able to execute in those countries to be a growth leader,” Mogollon said. “If you move in too late, the competition will already be entrenched there and you won’t be able to compete.”

In addition to responding to the depletion of natural resources and global competitiveness, GE also is focusing its attention on the markets affected by the ever-increasing population.

“It’s not surprising that the world’s population is expected to grow from 6.5 billion to 9.1 billion by 2050,” Mogollon said. “What is surprising is that 80 percent of the world’s populations will be in developing countries. Imagine this enormous growth in countries that have little to no infrastructure.”

This great expansion provokes other macro trend and infrastructure building opportunities in industries such as energy, health care, transportation, water and security. It also means an increased demand for developing countries to invest in building infrastructure,” Mogollon explained.

The equation is quite simple—because developing countries’ have significant needs and GE has the product capabilities to handle them, GE expects to experience both global and emerging-market revenue growth.

“That, however, is only half of the equation,” Mogollon said. “The other half is execution, and we need growth leaders to do that.”

Cultivating Growth Leaders
GE is redefining what it means to be a growth leader, Mogollon said. Describing personal characteristics of growth leaders, Mogollon emphasized the importance of being imaginative and courageous—essentially, self-confident. “In order to be influential, you need to demonstrate self-confidence,” he said. Expertise in a specific field is an added bonus, he said. The combination of expertise and self-confidence gives you the ability to drive change.”

In this fast-changing world, Mogollon and his GE counterparts aren’t just looking to follow the trends—they’re seeking new leaders who can set them as well.

Notable Soundbites

On creating a personal brand:
“I think it’s so important to ask yourself, ‘How am I being branded?’ So, solicit feedback. Colin Powell (former secretary of state), Jack Welch (former GE chairman and CEO), and my boss, Art Harper (CEO-GE Equipment Services), all have a personal brand; you know what their vision is and what their values are.”

On Hurricane Katrina’s effect on GE:
“With a plant there, we had 220 employees affected by the hurricane, but no fatalities. We donated millions to fulfill our responsibility as a good neighbor. From the business perspective, we have GE insurance and we will probably suffer there.”

On working in sales:
“Sales demands emotional intelligence. You have to want to be in front of the customer and like people. I hate when people try to manipulate their customer. You have to enjoy selling, and be genuine and honest.”