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"I want GE India to be viewed as one of India's best Indian companies"

John Flannery, in a candid interview, talks about GE missing the bus in India, rural opportunities and what lies ahead

Published: Dec 16, 2009 08:55:57 AM IST
Updated: Dec 16, 2009 05:21:41 PM IST

The GE Capital veteran, John Flannery, is stepping into the role of India president and chief executive officer at a rather critical juncture. As he himself says, “In this ‘reset world’ succeeding in fast-growth emerging markets is not a ‘nice to have’ — it’s going to be ‘oxygen’ for any global company going forward.” Succeeding in India is critical for GE and a lot will depend on how Flannery cracks open the opportunity. In this email interview with Malini Goyal and Neelima Mahajan-Bansal, Flannery shares his vision for GE India. Excerpts:

All eyes are on you as you take over the top job in India, as this signals a big shift in GE's India strategy. Going forward, what is your agenda for GE India? What will your top three-four priorities be?
Our overall agenda is to become a much bigger player in India than we have been historically. As much as India has grown in the past decade, it is still in the very early stages of its long-term development. To achieve our agenda, we will be focused on enhancing our local product development and marketing capability, expanding our technology and manufacturing base and seeking to partner with leading Indian companies where that makes sense. As with any successful organisation, making sure we attract, develop and retain the absolutely best human resources is of paramount importance.

How does your appointment change things for GE India? What difference will the "One GE" approach make for GE India? Why was this important and critical step in GE's India growth strategy?
On the margin, of course, my appointment is of limited importance. However, running the organisation directly from India as “One GE” is a very significant evolution. Our theory is that by concentrating more resources and decision- making in India we will be able to better serve local customer needs and ultimately achieve faster growth. We also hope that by conceiving and developing products for the Indian market, we can in turn use those products to penetrate more mature markets outside of India. This is the “reverse innovation” concept you saw our chairman, Jeff Immelt write about recently in the Harvard Business Review. We will still have deep connections with our global organisation, but the “center of gravity” will move towards India.

I want GE India to be viewed as one of India’s best Indian companies — not one of its best MNCs. By combining strong local talent with our global experiences, we can help India develop important sectors like power, health care, transportation and infrastructure. Achieving that vision will benefit our customers, our employees and India as a country — and doing so will provide rewards to GE shareholders as well.

GE Capital veteran, John Flannery
Image: Sebastian John/Forbes India
GE Capital veteran, John Flannery
One of the really inspiring aspects of this opportunity is our potential to impact the lives of the large population in India’s rural areas. Low-cost, innovative product breakthroughs such as Mac i, an ECG machine that runs on battery and takes an ECG report at less than the cost of a bottle of mineral water; Lullaby, a baby-warmer that plays a key role in survival of newborns and helps reduce infantile mortality in India through high technology and significantly reduced price (70 percent lower than an imported product) are going to bring high quality health care at an affordable cost to millions of people. How can you be anything but motivated by the prospect of that kind of change?

How do you view the India opportunity for GE? What areas will GE bet on in India?
It is still early days for my assessment at this point, but what is so exciting about India is how broadly based the opportunities are. Across the country, you look at sectors like energy, health care, transportation, infrastructure, financial services — they all are on steep and sustainable growth curves that will play out over decades. We are open to a wide range of investments including direct capital and technology bets in our own businesses as well as partnership ventures with leading Indian companies.

GE watchers feel that the MNC giant has perhaps missed the India opportunity so far — from financial services to appliances (barring a few stray successes like outsourcing and healthcare). Would you agree? What is your evaluation of GE India's performance over the last few years?
I would agree in the sense that when we look at where we are today in India we are not fully satisfied. We have had solid success in many areas but given the opportunities in this country and their excellent fit with our areas of strategic focus, we should be doing more — significantly more.

How different are the expectations from the two big Asian economies — India and China? Can you share some perspective on the different growth trajectories that the two countries are expected to take in the GE future world?
China and India are distinctly different in so many ways, but they are united by the fact that they are both incredible economies that will be engines for global growth for decades to come. In terms of GE, our organisation is probably a bit deeper and more mature in China right now but we are closing that gap in India.

In the "reset world", growth is tapering in the mature economies and the big money spinner — financing business — is undergoing a difficult time and substantive scale down. Help us understand the relative importance of India in this reset world.

In this “reset world” succeeding in fast-growth emerging markets is not a “nice to have” — it’s going to be “oxygen” for any global company going forward. India stands right in the middle of that equation, so it is no exaggeration to say that GE views success in India as critical. While that may not enhance my quality of sleep each night, it does mean we will be getting the resources and support we need to succeed.

Large MNCs have impressive structures and processes. But it also makes them bureaucratic and less nimble. What are some of the changes at the headquarters to bring in this nimbleness?
The trick is to keep the “best of both”. Many of these processes and disciplines have proven effective over many years in many situations. The key is to have that capability “in country” so you maintain quality and discipline but accelerate decision- making speed and allow some customisation for local market norms. We did this in my prior role in GE Capital Asia and it worked well — same disciplines but locally executed.

What are some of the challenges — internal and external both — you envisage in your new assignment?
On the external side, I see a lot more opportunity than challenge at this point. Our success will be driven by our ability to execute — to really understand the local market needs and then be able to harness GE’s strengths to deliver the right products at the right price points. The upside is enormous.

Internally, it is a change in organisation structure and that always has a period of transitional issues and growing pains. I have worked at GE for 22 years now and one thing that has remained constant is our culture of continuous learning and improvement. People are quite accepting that change is always a part of that process.

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