"Our job is to sell more than just the box"
Welch foreseen long before most his contemporaries that much of the most profitable growth in the future for General Electric (NYSE:GE) would be related to services.
He looked at the existing core industrial strengths within the company, and challenged his people to come up with the types of services that could spring forth from their expertise in all sorts of areas they'd been working in for years.
The point he was making, is what led him to the comment above: "Our job is to sell more than just the box." Very few companies can compete any longer based on selling what's solely in the box any more.
Most companies know that in our time, but back when Welch was leading the company, it wasn't near as obvious, as very few were doing it. Although IBM (NYSE:IBM) also saw it years ago, as they knew computers would become a commodity, so they drew upon their wealth of experience in that area and developed highly profitable services to sell to users.
In our day, the simple fact of being successful in business over period of time brings us tremendous expertise that we many times don't think or take advantage of.
From any small company to a gigantic one, there is a wealth of information and experience that can be tapped in order to create services that can help companies in almost any area they struggle. And since that is our unique experience, all we have to do is mine and remember it, while putting it in a form that can be presented and taught to others that need it.
There is so much here in any company, that it takes rethinking everything to start understanding what it is we have.
For example, Disney (NYSE:DIS) provides customer service training to airports. What does Disney have in common with airports? They both have people standing around waiting in lines. But you have to think in different terms when looking at developing these types of services. Many times they can reach far outside your industry, but still be very relevant, as in the Disney case.
The reason our job is to sell more than the box, is the box, in most cases, has become a commodity, it's those that add the extra value of helping others use it efficiently and to their satisfaction that have a great future ahead of them.
This is an area that almost any company could take and create numerous new streams of income with. The key is understanding what you really have, and looking for ways it can help those even outside your industry.
General Electric has been doing this in a number of areas for years. It is very profitable and low cost. We hurt ourselves by not taking this on as a key priority in our own companies.
Other Jack Welch Resources:
Jack Welch's advice to MIT Sloan students
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