This is a great case study on the lack of future insight, but it’s only half complete. The author tells the story of how GE doubled down on its investment in traditional, fossil fuel energy generation with the 2015 purchase of Alstom for $13B just one month before the start of the meeting in Paris that would result in the Paris climate accord. The result was disastrous.
General Electric announced it would close a California gas plant 20 years ahead of schedule. The Inland Empire Energy Center in California, the company said, was “uneconomical to support further” in part because of outdated technology… The closure is not just a hiccup in GE’s energy plans, but is just one small piece of the American giant’s substantial stumble on clean energy in recent years.
What the author does not discuss is why GE made this decision. What was happening inside the GE decision making process that caused them to ignore the obvious trends that would lead to a plausible future in which fossil fuel energy would fade? There was a massive amount of ‘due diligence’ done by some of the smartest Harvard MBA’s around and this is what happened.
It is clear that there was a huge lack of foresight when the decision to purchase Alstom was made. And it’s not as if the relevant trends were especially subtle or hidden, they were in plain sight. One can only speculate on what was going on in GE at this time but it is likely that the analytic/quantitative overwhelmed the synthetic/qualitative inputs into the decision.
The author concludes that “GE can serve as a cautionary tale for other businesses on what it looks like to miss out on the world’s shifting use of energy”, but this story is much more than that. It is a cautionary tale about companies ignoring the increasingly important tools of foresight and futuring. Today, these tools are well developed and in wide use. Companies ignore them at their peril as the case of GE so aptly demonstrates.