GE has failed the Cocktail Napkin test. If you can’t explain your strategy to someone on the back of a cocktail napkin, it’s too complicated. The best-performing organizations have a single, overarching strategic posture that everyone in the organization understands. More complicated organizations end up tripping over themselves. That’s why GE is going to split up. Many of its individual businesses are focused. The conglomerate as a whole is not.
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