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Hello Forbes Career readers,
Do you call something a trend when it’s been going on for decades?
That’s the question that arises with the announcement that at least three big old companies – General Electric, Johnson & Johnson and Toshiba – are considering going their separate ways.
On Tuesday, General Electric announced that it would split into three companies over the next two years, eliminating the iconic GE of the past that offered everything from light bulbs and jet engines to mortgages and TV shows. Next were Johnson & Johnson and Toshiba, with the diversified healthcare company saying it would divest its famous consumer business while the electronics maker announced it would split into three infrastructure-focused companies, semiconductors and devices. The news followed that of IBM just a week before it completed the separation of its managed infrastructure services business, with the spin-off now marketed under its own company name, Kyndryl.
But these are movements that are slow to come. “GE is sort of the last one at the party, so to speak,” John Joseph, professor of strategy at the University of California, Irvine Business School, told me in an interview last week. The conglomerates, which came to power in the 1960s and 1970s, have been separating for decades. “It is the end of a chapter rather than the beginning of one.” He was hardly the only one to say that the conglomerates were dead.
Yet two Forbes Contributors argue that the conglomerate model is not finished, it just takes different forms. Howard Yu, professor of strategy and innovation at IMD Switzerland, posted a clever article describing how companies like Amazon and Microsoft are part of a third wave of conglomerates that are sustaining themselves not by offering a discount to investors, or by assuming a management technique, but by “digital glue” and “their prowess in the management of data flows”. He writes that “From this perspective, the history of GE, J&J and Toshiba is easy to understand. Their disparate activities are unrelated because their data remains siled. They failed to imagine how to release their knowledge in different divisions. “
Christian Stadler, professor of strategic management at Warwick Business School, makes a similar point, comparing IBM’s decision to lay off companies and Microsoft’s increasingly diverse positions. “In the age of platforms, the opportunities to leverage customer relationships will grow even more,” he writes. “Amazon is perhaps the most effective company in this regard. In the words of Jeff Bezos: “When we win a Golden Globe, it helps us sell more shoes. “”
Whatever the strategy, these newly distinct companies have their work cut out for them. Contributor George Bradt explained what each of these spinoffs needs to do to create their own culture. Shame on these new companies, he wrote, if they “don’t take the opportunity to accelerate through the inflection points by resetting strategy, organization and operations.” Culture, writes Bradt, “is the only sustainable competitive advantage.”
GE has looked after insiders for years. A stranger is finally breaking it.
General Electric CEO Larry Culp, the first outside CEO to lead the iconic company in its 129-year history, announced on November 9 that he would finally break the languid industrial giant. As a non-GE lifer, he is not attached to the history of the company and is not encumbered with a career aimed at growing his business, factors which can make it more difficult for insiders to do the same strategic movements.
On our agenda
What we’re watching this week
Retail Profits: Walmart, Target, Home Depot, Lowe’s and more are reporting their results this week, offering a snapshot of where these big retailers are going as we head into the all-important holiday shopping season.
Speaking of retail: Black Friday buying and selling is in full swing, starting at the start of the year due to supply chain issues. More are sure to arrive in the coming week after Walmart and Target launched their offerings on Monday.
An eye on vaccination mandates: The United States Court of Appeals for the Fifth Circuit on Friday reaffirmed an early judgment of the Biden administration’s rules for employers regarding vaccine and testing requirements. Then, on Monday, the United States Chamber of Commerce recommended companies to meet the requirements despite the shutdown. With a range of business business groups filing warrant lawsuits, we’re keeping an eye on the court’s next decision. On December 5, large employers will have to start asking unvaccinated employees to wear masks if they aren’t already.
Five essential stories about work, careers and leadership on the web
Several CEOs, including those of PwC, Upwork, Kate Spade and IBM, spoke to the New York Times for an article that explains how they envision the future of the office and how they plan to bring their employees together. “I miss the meetings where you can get up and go to the whiteboard and draw what you think and ask others to look at it,” said Sundar Pichai, chief executive of Google and its parent company, Alphabet.
Research shows that people change screens an average of 566 times a day, and that it takes an average of 25 minutes and 26 seconds to resume the task, the the Wall Street newspaper reports in this look at what all those email alerts are doing to our focus, attention, and productivity.
Paternity leave has drawn criticism from some conservative pundits during the leave of Treasury Secretary Pete Buttigieg. But many companies see real rewards in giving dads generous paid time off, HR Diving reports.
Psychologists advise a slow return to normal life in the rest of society, writes author and strategist Rahaf Harfoush in Harvard business review. The same easing approach should also apply to returning to the office.
With “critical race theory”, the politically charged controversy in education, teaching systemic racism will fall more on employers, writes S. Mitra Kalita in Time.
The latest reading on work, leadership and careers
Intelligent, insightful and written for senior executives, Bias interrupted (November 16) is the latest book to come out in the wake of last year’s corporate racial calculus and growing emphasis on diversity, equity and inclusion.
Written by Joan C. Williams, professor and director of the Center for WorkLife Law at the University of California, Hastings, the book argues that diversity training generally does not work and that many diversity “programs” are not effective. because they are designed more to help women, people of color and other under-represented groups navigate corporate systems, rather than helping executives change the systems themselves. Yet, if they approach these human resource systems (hiring, performance reviews, promotions) as “bias breakers” and measure them as they would with other business systems, they would come close to driving business. ‘a real change.
Key quote: After the murder of George Floyd, many companies organized town halls for open dialogues on race and diversity issues, revealing difficult issues and personal experiences with race that had rarely been discussed in the workplace before. . But talking about problems isn’t enough, Williams says.
“It can increase a sense of belonging in people of color, but sincere conversation is not a model for effective organizational change,” she said in an interview. “If companies face diversity challenges, it’s usually because they have biases that are constantly conveyed through their core business systems, through hiring, through who has access to opportunities. You have to fix the systems. A sincere conversation will not do that.
Work at home
Forbes contributors on remote working – and smarter working
For some, teleworking is coming to an end. Hearst’s magazine employees are taking action to keep this going.
A hybrid work environment is new to many people. Here are some tips for success with your team.
The possibility of working remotely could open the doors to a new era of directors and creatives.
Learn to lead
Forbes contributors on managing, leading, mentoring and navigating organizational issues
Aiming for perfection could prevent you from being a great leader. Here’s how to change that.
A humble attitude can help leaders stand out with their team.
As leaders struggle for a better future, they must admit what they don’t know.
Find your balance
Forbes contributors to work-life balance, stress, vacations and juggling all that
In a situation of professional burnout? Here are ways to start recovering.
The increasing use of technology in the workplace has started to impact the well-being of workers.
Is the “Great Resignation” in fact a mass retreat?