|BACK AT THE RANCH
J. E. HOGG
Bill Mann has emphasized the importance of being customer-oriented.
Indeed, the keystone to General Electric's progress has been the
pioneering of this marketing philosophy which focuses the business on
understanding and serving the real needs of today's customers.
I personally support the company's philosophy of customer orientation,
and so do my associates in Marketing Administration. We are keenly aware
of the sensitiveness of your relationships with the customers before,
during and after the sale. We know that we must sell good products
competitively, yet profitably. .. Products which meet the customers needs.
Our marketing people must be honest, well informed, and well-trained. As
one of the supporting organizations, we are dedicated to help you meet
your commitments on time.
Only under these conditions will both the customer and the company be
satisfied. During the evolution of this marketing philosophy, our company
had to develop new organizational structures and outline new marketing
functions to implement this concept. In our department two of these
functions, Marketing Administration and Personnel Development, have been
combined; filling a vital supporting role in meeting the objectives of
These are the areas of support we work in:
1. Forecasting and scheduling the products you sell.
2. Establishing the procedures and processing your orders. Following
them continuously until our commitments have been fulfilled.
3. Establishing the two-way communication channels and transmitting
vital information to you and other levels of management.
4. Selection, training and placement of superior marketing personnel in
our various marketing functions.
5. Working with each of you in your self development program.
Back here at the ranch we have made significant achievements in each of
the areas which we would like to discuss with you. Wrangler "Prod Em
Parsons" will tell you about his new hay bailing machine for bundling
up all your activity reports. He will discuss another bundle called SAM,
and how he plans to distribute it over his rural free distribution system.
At this time, I would like to introduce "Wrangler Prod Em" Al
BACK AT THE RANCH
A. G. PARSONS
It's a pleasure to take time out from prodding back at the ranch to
enjoy all the constructive criticism of the past three days. We have three
more things going for you . . .
one. .. The Sales Administrative Manual
two. .. Distribution and Mailing List
three.. The Proposition Activity Report
First, the Sales Administrative Manual was conceived to be your
handbook on Marketing and Department Policies and Procedures, associated
with your daily business activities. SAM is now one-third complete. We
plan to get over 25 inserts written, approved and distributed to you by
the end of the year on subjects of highest priority, determined from your
requests during the past few months. As soon as approvals are obtained, we
will send you the information informally through the marketing bulletin.
Current marketing bulletins ready for distribution are: Program
debugging and testing policy Use of G. E. leased wire telephone network -
Equipment trade-in policy.
We hope your secretaries put these marketing bulletins in your copy of
SAM under the appropriate tab where you can find them when needed. When
you get the formal SAM insert, your secretary should file them in place of
the original Marketing Bulletin. The secret of a good storage and
retrieval system in this case is a well trained secretary.
Now about rural free distribution.
Fred Stearns recently developed a complete set of addressograph plates
tabbed for complete distribution coverage by function. This is the first
major move in establishing a single marketing section list. .. to be sure
all of you are getting the latest information.
Procedures are now established so that Fred gets information on
individual status changes directly from various sources so that his lists
are always current. Also, Bob Kroon, working with Finance Office Services,
is establishing a central reproduction and distribution operation in the
marketing area. All marketing distribution will funnel through this one
operation; giving us better control, increased efficiency and better
measurement of volume and effort involved. We now have a workable system
which will improve as we grow and gain experience. Finally the
status of our Proposition Activity automation program. The volume of
proposition activity reports from the field is very encouraging. We quite
honestly would rather book orders than reports. But I want to make it
clear that the proposition reporting system has always been planned as,
and will be, a two-way street. And let me say that we realize some
of you feel that this is not the case because you haven't received help or
answers to questions you have asked for by way of the system. To repeat,
the system is a two-way street. You must remember,
however; that before you will see immediate results other than action on
your specific requests for help on a particular problem, certain
activities must take place.
Here's what happened back at the ranch; Harold Gran immediately edits
each report when received. The edited report immediately goes to Miss
Lambett at the Flexowriter. The hard copy by-product is distributed for
action to Sales and Application Engineering. The same day, the paper tape,
which is programmed for the 225, presently goes to the tape to card
converter and interim reports are printed out.
We get orders received reports and proposition activity reports. These
are used by Harold Gran, working on Monthly Rolling Forecasts, and by John
Malkie for preparing long range forecasts, and information for planning
the peripheral mix in ordering production on the factory. This information
also goes to Marketing Research.
Your daily contact with prospects and customers is our best source of
information about the needs of the market. What type of products are
gaining the greatest acceptance, and which sales strategies are presently
most successful. All of your individual reports --when we put them
together at Headquarters-provide indicators which will be used by
Marketing Research, Product Planning, Sales Analysis and Planning
operations, and Management, in making decisions for future plans. This
means policies, products, and services will be scheduled on a timely basis
to get greater customer acceptance. Your information makes us aware of
competitors' activities in actual customer situations. And believe me
-your reports show that our competitors' standards vary from area to area,
customer to customer, and product to product. The only thing standard
about our competitors appears to be their traditional business suit
The programmer is now working, and we expect to get our first complete
assortment of reports and summaries from our 225 by August. Then we will
send you reports that will save you time and effort and provide you with
the tools for more productive sales activities. Here are a few of the
summaries and reports now planned for you:
1. Customer mailing lists
2. Quotes outstanding
3. Prospects lists.
Each of the above can be broken down into several lists showing you:
1. Current proposition number assignments by
2. Actual opening dates of propositions
3. Date of first call
4. Status of customer on last call
5. Your estimated closing date
6. The application and market
7. Product or products considered
8. The $ value of individual and total prospects and practically any
other analysis which you may request.
For instance, here are a few statistics from your reports which we
supplied to Sales Management at the end of the first quarter. For the
first quarter, on an all- sold value.. that is, figuring all equipment at
selling prices ., the actual value of proposition effort reported was
$86,000,000. This, added to last year's carry-over totals $166,000,000 of
open prospects. These amounts do not include orders received and booked,
or lost business reported during the first quarter. We also found for the
first quarter that for both the 210' sand 225' s the ratio of prospects to
salesman- by- region was:
Eastern Region 3+
Central Region 9
Western Region 11
We know that the Eastern Region ratio is not correct -- that they are
heavily loaded with prospects --they are obviously too busy to make out
and submit activity reports. And well they might be. Since the record of
equipment orders received, both the 210's and 225's, through the first
Eastern Region 9
Central Region 8
Western Region 2
We also found that 54 salesmen had cornered 339 prospects valued at
about $200,000,000. Now, if we equate this to about 150 salesmen in the
field at the end of 1961, we come up with a potential of $600,000,000
worth of prospect orders. This is not far-fetched.. to get $100,000,000
worth of business, we need total prospect to value ratios somewhere (slide
7) between 5 and 10 to 1.
As you can see, even our unsophisticated tab operation delivers many
useful statistics to aid us at Headquarters to plan better and provide the
support tools you people in Field Sales need to do the job that lies
Next, is corral-keeper Clark, whose job is to continue the servicing of
the customers out there in the corral.
BACK AT THE RANCH
G. F. CLARK
To make your job easier, Contract Forms have been tailored to satisfy
customer needs. These forms which spell out the terms and conditions of
the order, were designed to help you be competitive. Our job is to support
you in the field by processing your orders as quickly and accurately as we
can. That's why the forms you are now using were sent to you, so that we
could give you quick, efficient service. These forms didn't measure up to
what we thought they would do for us, because special conditions have been
Let me tell you about some of these special conditions that have been
coming in attached to the contract forms. They are:
Changes to the warranty clause;
Agreement to furnish engineering drawings and design information to tie
in with other manufacturers' equipment;
- Changes affecting rental payments;
- Requirements for more applications engineering and Product Service
- Debugging time exceeding the standard time allowed;
- Deliveries we cannot meet due to prior sales or current schedules;
- Requirements for equipment not yet available
We recognize these are unusual conditions to meet particular
situations. If these occur, we are ready to assist and advise you. If you
men wait to accumulate exceptions and recommendations and send them in on
the contract, you may be embarrassed in front of the customer. Check with
us in advance. This will prevent competition from sneaking in while you
are champing at the bit in the field waiting for Headquarters' formal
approval which we can help you obtain earlier in the game. So tell us
about these special conditions as soon as you know about them,
The objective of the Contracts Administration Unit is to see to it that
the equipment you sold is delivered to the customer on time and we know
that you've sold them more than just hardware. We know that in order to
satisfy your commitments to the customer, many other conditions must be
met. For instance, is the software package ready? Is the cus
tomer's site ready? Is the customer's personnel trained and ready to
use the equipment? Have we promised compatibility or interchangeability
with equipment the customer now has on his site? Are the customer's
programs ready? Are the customer acquired accessory equipment and supplies
ready to be used with our system to do the customer's job? Our job is to
represent you to our manufacturing people to insure the timely delivery of
the equipment you sold. Our job is to represent you to our engineering
section to insure the timely delivery of the equipment your customer
needs. You're out in the field, talking to another prospect, while we're
here at home making sure that the man you sold will be a satisfied
customer. The quality of the job done in this area depends on the quality
and timeliness of the information you send to us. We want to do this job
the way you would do it if you were here. So send us all the information
as soon as you get it.
And now I would like to introduce "Big Bull" Duster,
otherwise known as "Breeder Bull" whose job is to produce strong
hardy "Little Bulls" to expand the herd out there on the range.
BACK AT THE RANCH
W. C. DUSTER
78 of you have participated in our Marketing Training Program which has
been informally christened the Astronaut Program. Many more men will
follow in your footsteps.
I should like to review for you the field manpower buildup over the
Here is the Computer Department Field Sales organization as it was on
January 1, 1960 .. nine offices, sixteen men and one woman.
The first Astronaut Training Class graduated April 1, 1960, and within
a month many of these men were in the field. Here is the way the Field
Sales organization looked then. The red indicates new additions of office
and personnel! Eleven offices and 27 people. By mid-June it was apparent
that our Sales
program was moving well beyond earlier expectations and a decision was
made to recruit and train another group of salesmen. Astronaut II Program
comprised this group of men, about half of whom were knowledgeable in the
computer field. The other half were new to computers, but willing and able
to pitch in and do a job. All had excellent appetites.
In early September, Sales plans were approved which provided for a
continuous recruiting and training of field sales engineers. On October 1,
1960, this is the way the field organization looked, fourteen offices, 36
people. By the end of 1960, the Seattle, Boston, and Phoenix offices were
opened. Our total Field force was comprised of 38 exempt personnel and 26
members of Class III and IV were in session here in Phoenix. Here they are
just before graduation on February 23. These two classes together were
larger than our total training efforts up to that time. Class V graduated
April 28. Our present class, the sixth, will complete the course July 14.
This is the field roster to date: twenty offices, 84 people. .. a 400%
increase since January 1, 1960.
Fifteen of you in this audience are members of Astronauts VII and
subsequent classes. Our plans are to continue through this year with four
more training classes of 15 - 18 men per class.
Looking back over the past year, the need for a large number of trained
Marketing personnel came upon us very rapidly in early 1960. There were
obstacles, but none that were insurmountable. In February, 1960, shortly
after John Hogg transferred from the field, he hired me into what was then
a one-man symphony to assist in Astronaut I Training and to develop a
longer range program of Marketing Personnel Development. The job was a
little bit like running a railroad engine and laying tracks at the same
time. Many of you have helped measurably to get this important program
rolling. We are very grateful for this assistance.
So far we have recruited 100 men for sales positions and have graduated
78 sales engineers and pre-sales application engineers. Our course
material, techniques, and facilities have constantly improved. In the
facility area, we have literally covered a lot of ground.. from our
classroom in the vault at Deer Valley Park.. to the old E and CR
classroom.. to 400 West Camelback.. and now to our new training center at
the Guaranty Bank Building in which we occupy quarters on the second
floor. We plan to remain there until the plant expansion is completed. I
am extending an invitation to each of you to stop in and visit us there.
Twenty-one classrooms and an auditorium are planned in the Deer Valley
expansion to meet the Department's training needs of all types. I hope all
of you will have met our staff of instructors by the time you leave
Phoenix. This is what they look like:
Arthur Ferguson Frank Sass Cora Mae Jones Elliott Kaufman John
Don Scholtz Bob Stanton
Concerning our plans for the future (and in our case future meaning
tomorrow, May 19) astronauts VII begins a ten-week course. Astronauts VIII
begins June 12, ending in late September. Astronauts IX begins July 10,
ending in mid-October. Astronauts X September, ending in late November.
To recruit and select the remaining groups of men, we have expanded our
recruiting to the field level. . . where it properly belongs. Recruiting
will be conducted in the field by the Regional Managers with the
assistance of Marketing Personnel Development, E and CR, and Application
Engineering. One of the main tasks now under way is the development of
more course material. .. such as computer applications (computer sales
situation cassettes) more material for machine teaching. We are deeply
involved in selection and use of the proper media for communicating
technical and sales information in the formal classroom environment and to
you in the field.
Two programs in machine teaching are completed in an experimental
state. A four-part tape slide training presentation comprised of 82 slides
and a 68 minute narration has just been completed. At our request and
direction these were prepared by
A and SP, and with slight modification, they can be used as a sales
tool with customers.
1. GE 225 system which you saw the first
part of during the presentation last Tuesday. 2. Programming
4. Sales features
We plan to use SSM principles as the basis for district sales meetings.
An instructor training program was conducted in Phoenix by Marketing
Services earlier this spring and nine members of our Department are
qualified as instructors --including Charlie Heist and Warren Prince.
Marketing Personnel Development stands ready to get this important phase
Now what can you do to continue helping us?
1. Send us top-grade referrals. Some of our best people have been
obtained in this manner.
2. Help us in developing cassette material for our sales classes and
for use in District Sales meetings. We want to learn what was the turning
point in the sale. Or.. as Bill Mann expressed it "There is a key to
every sale". What have these keys been in our sales?
3. Keep us posted on the important things which you feel need to be
covered in formal class in Phoenix. Personnel Development is a dynamic
The future looks terrific! We are customer
Our training organization is a dedicated, highly motivated, enthusiastic,
competent group of experienced men and women. Our
program is under a full head of steam and is rolling.
We are a vital part of your sales team and we are proud to be so. You
can count on us to support the sales effort 1000 per cent.
BACK AT THE RANCH
J. E. HOGG
Pitchfork Parsons, Corral-Keeper Clark and Wild Bill Duster have
high-lighted a few of the activities here at the ranch this past year. We
could talk about many others. To sum up. . . . . .
Marketing Administration and Personnel Development contributes to your
self development program, contributes in training, contributes in order
processing, to support the sale of a good product sold profitably to
satisfied customers to meet their needs. This is the keystone of the
General Electric Marketing Philosophy which guarantees success.
T. E. SANSOM
As a member of our Marketing team, Product Service is probably closer
to your direct selling activities in the field than any other department
|We work directly with you on our present
customers and near future customers, and as a result we know the necessity
for close cooperation and communication on the day-to-day field
activities, as well as the longer range Plans and Programs.
Today I want to review a little of where we have been, tell you about
where we are going, and point out how we think this will affect and assist
you in your pursuit of more and more customers for our Products and
Last year about this time, we had about thirteen data processing
computers installed and operating. We had in Product Service about 230
people, and we were working practically around the clock to make satisfied
customers out of just customers. During the past year, the number of
installed and operating computers has more than quadrupled. The amount of
personnel, material, and facilities which we have focused on Service and
Support has approximately doubled. This rate of expansion in Service and
Support has approximately doubled. This rate of expansion in Service and
Support is going to be commonplace for the next few years. Now, how is all
this affecting you in your activities?
To date, Product Service has probably been of greatest assistance to
direct selling in the area of demonstrated service ability. Our reputation
in the computer business has definitely been bolstered by this
demonstration in the eyes of prospective customers. You are currently
selling this service ability and reputation. We in Product Service are
directly assisting wherever we can.
We will continue to back you up on this.
Another area of assistance has been our site preparation liaison with
customers and prospective customers. This assistance has been somewhat
limited, and some of you have not been reluctant at all in pointing out
some of our apparent short comings. We are working hard on this, and in a
moment I'll tell you of some of our plans.
Our third major assistance to Sales is in insuring that you can safely
and confidently say to prospective customers, 'Ask the man who owns one',
how good our service is! !
So, that's where we have been! Now, where are we going? (Curtain Opens)
To date, all of our activities have been masterminded, directed and
controlled from Phoenix. This has successfully launched our service ship,
but now the Field Service Activities must join the Marketing fleet and
become a full fledged member of this fleet at sea. The desk admirals must
transfer field responsibilities to ship captains on the bridges of the
product service ships who are daily looking down the muzzles of the enemy
guns. The Phoenix- based desk admirals must concentrate on overall future
battle plans, provisions, budgets, logistics, and master strategy, while
measuring the current results of present plans and strategies.
Now, the 'New Frontier' plan: Effective July 1, 1961, the Western Regional Service ship will sail with a crew
in place of about 140 trained and experienced service men at twenty
different customer locations, a Field Support Center in Los Angeles now
implemented and stocked with an inventory of approximately $300, 000 in
replacement parts and supplies and commanded by the Western Regional
Service Manager, Vince Balhorn.
Vince will direct the day-to-day service activities in the Western
Region from his bridge at the Field Support Center in Los Angeles. A
little about Vince. ., he has been in the computer business for five
years, with Remington Rand and General Electric and with the Computer
Department since 1958. Most of this time has been spent in contributing to
our success on the B of A contract.
Effective August 1, 1961, the Central Region Service ship will sail
with a crew in place of twenty four men at eight locations, a Field
Support Center in Chicago modestly stocked with
parts, and commanded by the Central Region Service Manager, Ed Churlin.
Ed will operate from the Central Region Field Support Center at 840
South Canal St., Chicago. He has been in the computer service business for
about ten years with several data processing equipment manufacturers. He
joined us in 1959, and has spent most of his time with us on the 312/225
On August 15, the Eastern Region will join the fleet with a crew in
place of 48 service men at 18 locations, a Field Support Center just north
of the Teterborough Airport in South Hackensack, New Jersey, implemented
and stocked with about $100,000 of replacement parts and supplies in
inventory, and commanded by the Eastern Regional Service Manager, Ray
Ray has some five years in computers and automation, and has been with
us since 1957.
This shift of field direction responsibilities from Phoenix to the
marketing regions will take a little while to shake down, but by the end
of this year, the benefits to you and your customers should be heavily
felt. Such benefits as close-at- hand sources of technical information on
our products; rapid and frequent availability of site preparation
specialists; close-in availability of replacements parts, assemblies, and
supplies; rapid assignment of service assistance where needed;
on-the-scene management resolution of personnel and equipment problems;
and local consultation with your regional sales personnel on changing
marketing problems and conditions.
Those are the highlights of our increasing emphasis on direct
assistance to Field Sales. Meanwhile. " back at the ranch, other
necessary Product Service activities must be carried out by the desk
In order to provide our Regional Service Activities with trained
service personnel and equipment operating and servicing information, we
have a technical information and training unit, commanded
a Bank of America veteran, Jack Eardley. Jack is assuming this new
responsibility after six years of experience with
General Electric, of which about four years have been in the Computer
Department on the GE 100 and 210 equipments.
Occasionally, we have problems with equipment in the field. These
problems require detection, analysis, close investigation with engineering
and manufacturing, and a solution devised with instructions and material
for accomplishing the fix. Then, the information gained from these
experiences must be translated back into the current product planning and
engineering design work on future products. This work is done by our
Service Analysis Unit commanded by Owen Reece. Owen has been in the G. E.
family for about nine years and has devoted most of his five years with
the Computer Department to just such work on all of our products.
In order for our Regional Service Activities
to be adequately staffed and supplied for current and future service
requirements, there must be a continuous analysis of present service
effectiveness, an aggressive measurement of what our competition is
up to, and a steady planning ahead function carried on
in Headquarters. This Installation and Maintenance Unit in Product Service
is commanded by Edwin Poe. Ed has ten years of G. E. experience, and has
spent most of his four years with the Computer Department on the GE 100
and 210 equipments.
Up until a few weeks ago, the Industrial Process Control Computers were
a member of our family of computers. At present, the Industry Control
Department is absorbing this line of products. Since it is going to
take a while for this transition to jell, we are continuing to provide
service on these products until Industry Control gets into gear. This unit
of our Headquarters activity is commanded by a G. E.
Product Service, fifteen year veteran, Bob Buies. Bob's experience with
the Computer Department over the last five years has been on ERMA, the
304, the 225, as well as the process computer family.
Even tho' Lacy, and his boss, think that all we do is figure out more
ways to spend more and more of his money, we do spend a little time
estimating costs, keeping track of and analyzing our financial experience,
making budgets and then explaining and defending them, establishing
administrative methods and procedures, housing ourselves around the
country, and implementing our Supplies business. This unit we call our
Product Service Administration unit, and it is commanded by Carl Worlock.
Carl has spent his eighteen years with G. E. doing these kinds of things,
and his last two years with us have been a big help.
Somehow, we must find people who are interested, or can be interested,
in service work. Then after we get them, they always have little problems
such as ... 'How do I get my family moved;' 'What's with
this hospitalization insurance;' 'Transfer me quick... my ex-wife is after
me for alimony;' or 'but the judge said thirty days in jail'. These
interesting activities are handled by our specialist in Personnel
Administration, Lee Jeffery. Lee came out to Phoenix to help clear the
sage brush when the Department first moved here, and has been in the G. E.
family for about eighteen years.
That's our Product Service family, and those are some of our plans for
moving ahead with the 'New Frontier' .
And now to show you our version of a typical episode in the day to day
marketing activities of one of our regions, I give you - The 'Product
Players' presenting in three acts, 'Marryin Bob'.
R. D. JORDAN
Fellow Salesmen, .. now that your ears have stopped ringing, and you
are able to hear once more, it's a pleasure, a privilege, and a
responsibility to appear on your program.
I say 'pleasure' because I never yet met an advertising man (or
woman) who didn't like to talk, , . a 'privilege' because the short
duration of my talk multiplied by the number of you here will cost the
department approximately $3750 in man-hours. ., a 'responsibility'
because you and the company are thereby entitled to get something
back from this investment'.
I might also add that it is with a distinct sense of refreshment that I
face you gentlemen this morning, because most of the talking I do every
day is amongst other advertising people, and sooner or later, under such
circumstances, you are bound to find yourself talking to yourself, Like
the worm who popped out of the ground one bright, dewey morning and saw
another cute little worm. Said our hero: 'I love you, let's get married.'
'Don't be a dope,' said the second worm, 'I'm your other end'. '
I am going to spend my allotted time on a subject which is as
controversial as sex. .. as univer
sally sought as fame and money. .. and as thoroughly an integral part
of the life of a business as are the three just mentioned factors a part
of the life of man.
Specifically, I am going to talk about that intangible yet very real,
that sometimes nebulous but infinitely precious commodity called image.
Everything in life . .. every individual every business large or small.
.. every nation everything' animate or inanimate. " either creates
its own image or has an image created for it . .. for good or for bad.
Psychologists may not agree, but in my opinion there is no such thing as
no image at all.
Image is a product of the mind. The image approach recognizes that
companies like ours are like individuals; they have distinguishing
characteristics, and in the business world these characteristics set them
apart from their competitors.
We of the General Electric family here in this room share an interest
in and a responsibility for not one but three images: a corporate image
which is the composite of knowledge, feelings, ideas and beliefs
associated with the company as a result of the totality of its activities.
A product image which is the public's impression of the company in
terms of its product leadership, quality and performance. And... an
institutional image which is the impression the public has of the
company in terms of corporate leadership:
company, fast growing and expanding, product innovator, research
-mindedness . .. and its contributions to National Defense.
What your customers and prospects think and feel about General
Electric determines not only whether they will buy our products, but
whether our company will outlive many product lives.
In planning image objectives, it is not enough simply to encourage a
'general good feeling' about our company. .. or about our department. ..
or about each of us.
No . .. public opinion must be firmly rooted in an understanding of the
five basic public relations objectives:
1. General Electric is a good citizen. It
fulfills its responsibilities to customers, owners. employees, suppliers,
and the public.
2. General Electric is the leader in research
3. General Electric is vital to our National
4. General Electric is an inspiring example of
free, growing, and profitable enterprise.
5. General Electric makes products of outstanding value.
These are the permanent ingredients of our good image. .. the five
distinguishing characteristics which survey after survey have indicated
associated with the best known corporate symbol in America: the General
Electric monogram, and the implementation of which has made our company's
slogan 'progress is our most important product' one of the
world's most widely recognized corporate slogans.
The essential role of mass media in image building is readily apparent
in where people get their impressions of General Electric experience with
General Electric products is common in more than three in four of the
public . .. but the fact that other forms of contact also strongly
influence the creation of an image shows up when people tell their main
source of ideas about General Electric: 29% say they have gotten most of
their ideas and impressions through owning and using products, 27% got
their main impression through TV, 41% through reading feature stories and
publicity, 10% through advertising and 10% through radio.
Space advertising campaigns, and newspaper and magazine articles and
publicity are as good or better than television or product experiences in
helping build the company's corporate leadership image as shown by
the top line on this chart. In short, the way most people get to
know General Electric is through:
1. Experience in owning or using its products.
2. Exposure to mass media communication.
I emphasized that important phrase 'get to know' because it succinctly
underlines the absolute necessity of keeping everlastingly at the task of
communicating through mass media insofar as it is economically practical
and feasible to do so.
The most devastating words in the history of all business enterprise
are to be found in the Bible in the second chapter of Exodus.
You will recall that Joseph had been sold into slavery in Egypt, but
that through intelligence, thrift, and shrewd business
enterprise, he had so prospered that his name was known throughout the
entire land as second only to the king.
And then the Bible completely clobbers poor Joseph with these words:
'And Pharaoh died, and there arose in Egypt a new king which knew not
Joseph.' In these United States last year, about 1,500,000 people died and
with them passed away whatever favorable impressions they may had of
General Electric and the goods and services marketed by you gentlemen.
|And, your guess is as good as mine as to how
many new 'kings' will arise every day in the area of your
particular market place: kings who know not Joseph.
The favorable experience people have had with GE products has
contributed to the formation of the company's over-all image.
'Do things go wrong with General Electric products too often, only
occasionally, or hardly ever? '
Hardly ever. .. 53%
Occasionally. .. 18%
Too often . . . 3%
No opinion . . . 26%
Please do not misinterpret these figures from the study only in the
light of any unpleasant experience you may have had with any of your
customers: In the terms of the company survey I am referring to throughout
these charts, the three percent of the public who reported excessive
difficulties with General Electric products is small.. but actually
represents statistically three million customers perhaps a couple
of these were yours!
The last corporate image study shows a modest rise in the public's
feeling of familiarity with a number of leading companies . .. and here,
Gentlemen, may I paraphrase an old familiar saying by twisting it to read:
'a company is known by the company it keeps. '
Though our company is one of the best known of all industry, its four
point gain on 'familiarity' over the previous study is smaller than that
of Alcoa, Dupont, Gulf Oil, Sears Roebuck, and Westinghouse: in short,
General Electric does not seem to have fared as well as these other
leading companies in communicating new ideas. Note that word'
communicating, , Gentlemen, for it circumscribes the eternal
responsibility of all of us.
However, take immediate comfort from the fact that General Electric and
Westinghouse stand well ahead of other companies in their same general
field. Here for the first time, we see several other companies. .. IBM,
RCA, and General Dynamics included.
These companies in particular are seeking to enlarge their image . .,
to give it wider scope and dimension.
Commanding attention is not accomplished through one-shot or short-term
efforts, but require sustained, planned programming over a long
Whether name recognition and general favorability operate to the
benefit of a business depends crucially on whether public experiences
and contacts with a company are embodied in particular, concrete
impressions which give life, strength and personality to the company's activities
. .. that are enduring and not easily dissipated
by chance events that are beyond the company's control.
Which statement leads naturally to the thought that is in the minds of
many of us:
'What effect will recent unfortunate events have upon the image of our
Certainly there will be some effect, but in the opinion of our New York
office public opinion research consultants who are even now feeling the
pulse by one or more studies in depth:
So deep and wide is the reservoir of good will enjoyed by our company.
.. so well built and strong is the structure of our corporate image . . .
that there will be little or no lasting impact upon it at all.
The dominant elements of General Electric's corporate image are its product
reputation and leadership qualities. Compared with eight other top US
companies: Dupont, U. S. Steel, Texaco, Westinghouse 'The Telephone
Company, ' Sears Roebuck, and General Motors, General Electric's
'reputation profile' scores nine points higher above the average for all
nine in both product reputation and corporate leadership, and well above
all eight in recognition of its defense contributions.
Our company's product image is relatively strong in all areas . ..
ranging from 52% . .. or nine points higher than the average of the other
eight top US companies mentioned previously. . . for dependable products
down to 31% or seven points higher for' outstanding product performance. '
In 'corporate leadership' the story is much the same: 'progressive
company' ... eight points above nine company average 'product innovators'
. .. 12 points up, 'develops new product uses' . . . 11
points higher, 'research minded' . ., 13 points above.
Now. .. let's turn to the image of greatest meat-and-potatoes interest
to you and me: the image of our department and of its products and
There is no doubt but that many of the sales influencing components of
our several images as a company rub off to some degree on new
departments and on their products and services. There is little doubt but
that the salesman who can say: ' I represent General Electric' has a
better chance of getting in faster to see Mr. Big than one who represents
a lesser known company. But... here much of the advantage stops because of
two closely related factors:
1. Lack of familiarity with the General Electric
product you are selling.
2. An over-riding strong product, corporate and institutional set of
images associated with competitors in a specific,
trated area which has been traditionally theirs.
This, then is the frontier upon which we stand and its a lonely one but
with four shining objectives on the way to image creation and success:
General Electric is in the computer business to stay.
2. General Electric makes computer products of outstanding value.
Offers unexcelled programming and applications service.
General Electric computer products and services have proven acceptance
in the market place.
Not that these objectives alone will produce the ultimate image that
our management seeks .. . rather they are like the building blocks of a
space platform from which our business can soar.
Two of your Regional Managers have written me within the past few weeks
to say in effect that we now have such great recognition and acceptance
our systems in the banking industry, that we
should taper off our banking promotion and help build the same stature for
our products in other fields. This in itself is the greatest tribute to
the power of advertising in support of what up until now has been but a
handful of determined and terrifically competent salesman that I have ever
heard in more than thirty years in this profession.
And, the most sincere thanks of Coleman, our agency, and myself for
helping us dig up the facts for these advertisements: pre installation
case histories in which the banking executive says why he bought GE. ...
new order advertisements the swing is on to General Electric:
The millionth account series updated to larger and larger significant
For more than a year these ads have been pounding away in the Wall
Street Journal, Audigram, and American Banker on the theme of 'proven
acceptance in the market place' and actual night after night 'outstanding
product performance'. These same themes have carried through all of your
trade shows in all advertising there is nothing as ageless or more
powerful than confidence spoken through the lips of hardheaded, highly
respected business leaders in a buyer's market.
For the future . .. whatever the field or the product. .. we turn again
to you for comparable image making material like this. In general your
customers will love it . .. it will help your stature with them (besides
giving you that little extra glow from seeing the job you sold publicized
widely) and lastly provide the bit payoff: sales back-up for your fellow
I pray for the day. . . and I am sure Messrs. Lasher, Goostree, and
Sheeley join me . .. when' sales are so numerous that we'll have to
restrict the offer, but until that day comes the offer stands: In one way
or another. ., through advertising, sales promotion, publicity, and trade
shows, we'll gladly publicize nationally all the case histories you can
Aside from the case histories outstanding product performance
advertising which we are continuing as rapidly as material becomes
available in other areas, several of us of late have developed a strong
allergy towards the 'battle of the numbers' or the 'cavalcade of ciphers.'
After all, we have come to believe, nomenclature is most useful for
cataloging purposes, but a customer doesn't lay several hundred thousand
dollars on the line for a number: he puts up his money for a service . ..
an asset.. ., a management tool.
Running throughout practically all of the image questionnaires which
many of you returned to me is a plea for great emphasis on point No. 3 of
my previous slide. .. namely; 'General Electric offers unexcelled
programming and applications services. '
If further credence to these statements is needed, I'd like to show you
one portion of a survey amongst 1,000 executives recently completed by the
magazine Scientific American.
Scientific American asked amongst several other questions:
' Assuming that several computer and data processing systems meet
minimum requirements, please number (one through seven) the listed factors
. .. in order of importance. .. as they would influence your selection of
a vendor company for each type of computer and data processing system. '
Here are the results for business computers and data processing
systems: 'price is almost an automatic reflex, of course and is the number
1 factor. Price aside or competitive, however, automatic programming
techniques is highest un the list of factors, closely followed by
followed by stature of the vendor company, and price following in that
To quote our General Manager, Lash recently said in a talk before a
customer group and more recently in his presentation to chairman of the
board Ralph Cordiner and other members of the executive office:
'A vital aspect of our computer industry is the importance of
programming, or the art of using computers. We have almost as much
technical effort devoted to programming as we have devoted to hardware
engineering. We are making significant contributions to programming
technology. We are convinced that this is a real avenue to opening new
applications and reducing present customer costs by making it easier to
use, operate, and replace computers without re-doing all their operating
procedures and set-up. '
Which all reminds me of a stanza from a poem that I read at our first
National Sales Meeting and which holds a powerful moral for all of us: 'so
tell me quick and tell me true, or else my boy. . . to hell with you ! Less
how the product came to be . .. more what the damn thing does for me.
' This advertisement. .. shown here with its supporting literature. ..
which you saw recently in the Wall Street Journal, Scientific American,
and Fortune is an example of our new philosophy.
It will be followed by others in the same vein the next to be on the
critical path method programming package for use with GE 225. Each
successive advertisement in this series will further develop an image
that: General Electric's computers department not only makes equipment of
outstanding value but helps you 'King Customer' find more ways to utilize
information processing in your overall business management and control. ..
more effectively and efficiently than has heretofore been practical or
In short, as a spokesman for the American Management Association puts
it: 'The mere acquisition of a computer is fast losing its competitive
advantage, and in the future, the competitive edge is going to the company
which figures out how best to
use the capabilities
of the computer.' Unquote.
GE programming techniques will be an important part of this figuring.
The theme of your National Sales Meeting is 'Frontiers of Progress. ' Having had a modest part in setting this theme, I should be lacking in
'parenthood, , if I did not at least tie in some of our work with it.
Thanks to some dedicated people in my group like Coleman Ross, Ray
Shanahan, Jim Sutton, Bob Bonheimer, Jim Dewitt. .. to name some veterans
. . . plus Jim Doyle, Bob Widmark, Bob Clarke, Jim Priest,
Bob Moczulewski, and our four girls Darlene, Evelyn, Shirlee and Pat
ranging in continuity of service from two weeks to two years. ..
Advertising and Sales Promotion in this department has come a long way
since November 1, 1956 . .. and still has a long row to hoe.!
The profile up that mountain represents the growth of the Advertising
and Sales Promotion subsection budget from one advertisement, one
data sheet and one person (myself) in November 1956 throughout 1960 and
projected to January 1962.
We have been in the foothills. .. we are now just beginning to scale
With each added dollar, has come a greater sense of responsibility. I
assure you. .. for today the dollar ear-marked for selling our
department's products and services demands of my group and Bob's a keener
realization of the responsibilities involved.
It also demands greater inventiveness, imaginuity and pioneering.
'Prospectin' to my associates and myself means picking away at pay dirt
in the form of media or mailing list circulation amongst customers and
From such 'prospectin' last year came more than 8,000 inquiries in the
form of letters, telegrams, magazine 'Bingo cards' and so on. Carefully
sifted by sales before being passed along to you. these inquiries resulted
in a minimum of 4,000 'nuggets. ' out of which if even one half on one per
cent resulted in a 'strike' the program would have paid for itself many
In the examples of the work of my associates which I should like to
review very quickly in closing, I am sure you will see much that is real
progress. Many projects which represent pioneering as far as our
department is concerned. .. and all to one common image: to help you sell.
We now have for your immediate use, an expanded new banking, mailing
list broken down into individual districts so that each mailing may be
personalized with your facsimile signature and go only to your customers
and prospects in the banking industry. This new list covers 2.135 banks.
Run-offs on this list have been furnished each district manager
upon his return. He and his salesmen may thereafter add (or subtract)
as many additional names as he wishes.
Similarly, we are discussing with Tom the establishment of mailing
lists for other key markets as rapidly as practical. One additional list
of consultants is already well under way. .. others will follow.
Speaking of consultants, Bob and I are working on plans for a series of
seminars at Crotonville in late fall for these very influential'
customers.' As a matter of fact, the prologue to this meeting was
developed with the thought in mind that it could be used not only at
Crotonville, but before other external groups as well.
Within the past few months we have put in place the beginning of a
dynamic visual aids group including complete sound motion picture
equipment for 'quickie' in-plant photography. Although but one full-time
man and part time of a girl clerk at this date, 'shoot-em-up'! Bob Clarke
has already shot eight such quickies. .. including one for Bob Harris on
the new 1,200 card-per-minute sorter and a pictorial progress report on F
ASCO for George Gamble.
In addition to Bob's direct efforts in this area, we, John Hogg and
myself, have either produced or have in production five sound strips,
under Bob's supervision. .. four on the GE 225, one of which you saw
Tuesday. ., and one on 'The ABC's of Computers' for use with management
groups. Also on film and to become available as soon as time permits are
the makings of a motion picture on how computer installation at the First
National Bank of Arizona. During Ray Barclay's presentation you saw, of
course, the new 'Manufacturing Competence' film. .. now also available.
The data book has now progressed to a new permanent format and along
with it is its companion a new condensed pocket-sized data book will be continuously
This year and during the first quarter of 1962 'Mrs. Bell's Check' will
be telecast 250 times through two public service programs 'TV Digest' and
'World in Motion. '
Sales backup in the form of new and revised manuals. .. brochures,
specification sheets, article reprints and so on . .. and not to forget.
.. our stable of good-will builders. .. means that sales promotion
continues at a high rate.
Space advertising is prepared in cooperation with us by the McCarty
Company. Media on the schedule include on a regular program basis: the
Wall Street Journal, Audigram, U. S. News and World Report, Data
Processing, Harvard Business Review, Control Engineering, Scientific
American, American Banker, Fortune, Business Week, Electrical World,
Modern Office Procedure, Production, Datamation.
Representing a total circulation to 2,100,000 interested individuals.
Now available for your guidance is a new 'Advertising Advices' medium
in which are spelled out marketing section policy with respect to
cooperation with customers on press conferences,' 'local, regional, and
national space advertising, ' 'direct mail distribution, , and so on.
From the Sermon on the Mount there is a famous passage which reads:
'Whoever shall compel thee to go one mile . .. go with him twain. '
We in Advertising and Sales Promotion are prepared to go that second
mile with you. ., on the road to success and prosperity.
I began this talk on a religious note . .. so let me conclude on
another. Let me remind you, Gentlemen, that the Christian Church is almost
2,000 years old.
It is known by its image to all races and colors. You will find it in
every country and in every climate. Its products and services can be
truthfully described as the greatest of their kind the world has ever
Yet. .. it rings the church bell every Sunday morning . . .
We thank you.
THERE'S GOLD IN THEM HILLS
C. C. LASHER
When James Watt invented the steam engine and Faraday the electric
motor, neither they nor anyone exclaimed, 'This is just what we need to
accomplish the industrial revolution'. But it did accomplish a revolution,
and later, historians recognized this fact and gave it that name. I
predict some day historians will recognize that electronic communications
and computer systems started the information handling revolution, just as
the invention of the steam engine started the industrial revolution.
|The steam engine and the electric motor have
been major factors in bringing us the highest standard of living the world
has ever known. They did this by multiplying the power of man's muscles.
But as the world of business becomes more complex, the mountains of
information and paperwork have grown beyond man's ability to properly
handle them. We must now multiply the power of man's intellect.
Just to maintain the historic rate of national progress for the next
ten years will require that the gross national product increase three
times as fast as the available work force.
In manufacturing organizations, banks, insurance companies, and other
business establishments as well as the government bureaus, the magnitude
of clerical work is increasing so fast it will exceed the available supply
of people unless our information handling ability is made more efficient.
A few years ago, the Hoover Commission established that the Federal
Government produces 25 billion pieces of paper each year. If this paper were to be placed
end to end, it would reach to the moon four times in triplicate. One-sixth
of our gross national product is devoted to paper handling. We are
becoming an economy and a society of paper shufflers. In the past, we have
concentrated on direct productive efficiency. Our clerical work force is
increasing much faster than our production work force.
The future opportunity is in increasing our information handling
efficiency. . . opportunity for General Electric as a manufacturer.
But, I don't have to tell you that because you know and believe in it.
If you did not, you would not be here and if I did not believe it, I would
not be here and I also believe that just as General Electric has long been
a leader in the broad field of energy handling, so will it be a leader in
the broad field of information handling.
Now I want to narrow the scope of this talk to digital information processing systems. . . our primary interest,
and examine first General Electric's motivation and progress as a user and
as a manufacturer.
I assume many of you are General Electric stockholders, or know of the
position of its shares on the stock market, and that you are aware that
General Electric's profitability last year and so far this year leaves
something to be desired. This would not be surprising perhaps, if General
Electric were growing dramatically. But over the last five years we have
been on a virtual plateau in terms of total outputs. General Electric is.
. . must. . . be dedicated to growth and must enter new businesses to
provide that growth. And it must improve the efficiency of its operations
to provide not only the funds for this purpose but also to reverse the
declining profit trend.
Information handling provides both opportunity for growth. . . as a
manufacturer. . . and opportunity for increased efficiency as a user. Thus
far, General Electric has moved more aggressively as a user than as a
manufacturer. Just how rapidly is illustrated by the
fact that in 1954, the first large scale electronic computer system for
business data processing was installed by General Electric Company at
Appliance Park in Louisville, Kentucky. The July, 1954, Harvard Business
Review had this to say, and
'The philosophy underlying GE's decision to install this million dollar
computer represents, for the most part, a radical departure from current
business thinking. It charts a course which many
organizations large, medium, and small. . . could follow in harnessing
high speed computers to business applications. Thus the practical problems
which had to be explored and solved in the course of GE's pioneering move may
be enlightening to the executive still uninformed or troubled with
doubts about this controversial new administrative tool'.
That's what Harvard Business Review had to say seven years ago. General
Electric is the largest commercial user of electronic computers in the
world with 100 computer systems installed and operating on information
handling problems throughout the company. In the process, General Electric
has acquired a wealth of operating know how and experience in computer
systems unmatched by any other organization.
From our experience as both a user and a manufacturer, we recognize the
value of information handling and the growth to be expected.
This is tremendous progress in less than seven years.
The communication computer system for the company's finance and service
operation will be, when completed, another milestone with its 12,000 miles
of communications circuits, re-servicing 56
warehouses and 34 product departments. We expect it to be the most
extensive on line system in industrial use. This time the hardware is
General Electric hardware. . . not competitive equipment. . . and General
Electric will benefit doubly from this pioneering effort through
leadership in improving performance and reducing cost, and through the
sale of additional equipment.
It is difficult to estimate the potential value of
such a project to the company. We in General Electric frequently spend
millions of dollars on new developments with the
hope that someone eventually will find a use for what is being developed.
Sometimes these payoff; sometimes not. I do not mean to case aspersions on
non-business oriented research projects. But the FASO project, at far less
expenditure, is the springboard to at least a half a billion dollar market
in the next ten years and there is no question that it is a desirable
product. . . that a customer wants and needs it now. The Computer
Department is 'inventing' to accomplish this job. . .
has to satisfy the customer. And, believe me, what satisfies General
Electric customers will also satisfy many others.
This ability within General Electric to provide realistic constraints
and objectives for engineers and systems designers working on advanced
technological information handling products, is one of General Electric's'
secret weapons' in the competitive battle.
As a practical matter the FASO System will be a demonstrable system,
saving the company money, at least two and perhaps five years sooner than
if the subject were tackled on an abstract basis. We are in the bank
business because of the ERMA project and we will be in the data
communications business because of the FASO project.
I want to talk about the information handling business from the
standpoint of company management's perspective, what the outside world
things, and what the Computer Department thinks and is planning.
In the last year, the company has directed its attention to more
consciously directing effort toward growth. Mr. Cordiner singled out the
following five areas as those being pursued; at the year end press
1. Atomic power and other new energy devices.
2. Stationary gas turbines and commercial jet
4. Industrial automation,
This is the first public statement of this kind committing General
Electric to the computer business.
I can best characterize the present executive office climate toward our
There is no question of the company's willingness to provide funds. Any
limitations are our own in the Computer Department. We want to be sure we
are growing in an orderly, sound and reasonably efficient manner.
About a month ago, Mr. Cordiner visited our plant
for a full day. In a breakfast meeting with all of the exempt employees,
he pointed out to them that General Electric would invest sixty million
dollars in terms of negative case flow in the computer business by the end
of 1962. He noted that if all the company departments required this
investment, the company would have spent within a five year span six
While the purpose of this statement was to call to the attention of the
Computer Department people the seriousness of their responsibilities it
also carried with it the full implication that company management intended
to devote resources of this magnitude to becoming a leader in the
information handling business.
The management confidence in our department has increased immeasurably
in the last year as we successfully did the things we said we were going
If anything, we are under pressure to make more progress. . . to move
faster and farther in the business.
What does the outside world think of General Electric and the computer
business? One of our major problems is creating the right image in
potential customers minds. Data processing customers are just becoming
aware that General Electric is in the computer business. General
advertising directed toward the newer technologies has been so overplayed
by companies trying to enhance the corporate image, that it receives
little attention by either the sophisticated or unsophisticated potential
Our repeated advertising in banking journals has done a good job in
making bankers aware of our abilities. Elsewhere our identification as a
computer supplier is weak.
In contrast, the attitude of both security analysts and other
manufacturers is that General Electric has made excellent progress.
Consultants in the industry have come to highly respect our offerings.
Recognition of General Electric as a major computer supplier will only
come as we can point to jobs successfully done. Then advertising can be
made to be more effective in image building. For the present, nothing is
more effective than the spoken word. We encourage Mr. Cordiner , the
company management and particularly you gentlemen to pass the word that
General Electric means business in the computer
Now, what do we in Phoenix think? Most fundamentally, we think the
limit to our rate of expansion is the rate at which we can grow a
reasonably efficient organization. Opportunities for technological
contributions abound. It is the rule rather than the exception that a new
project should be an order of magnitude higher in value than its
predecessor.. . or than equipment presently being delivered to the market
place. New application opportunities abound. The combination of untapped
new markets and dramatically higher performing, lower cost equipment in
the future makes an ideal climate for growth, even against established
competition. We have demonstrated the ability to grow, which means we have
necessarily performed in all of the essential elements of our business.
This year, in terms of output, we will be a larger than average General
Electric Department. . . a status achieved in five
years. Realizing the great opportunity, and confident of our ability,
everyone in the Computer Department is eager to make faster progress in
this exciting business.
|THERE'S GOLD IN THEM HILLS
H. A. STRICKLAND
Fellow salesmen: including the 16 old timers who have been here 16
I'm delighted to be with you, it's been a wonderful meeting and I got
here last night - I wish I had been here the whole time. I certainly have
enjoyed what I have seen so far. You fellows have certainly come a long
way in five years - pardon me in one year. In fact, when I see the way the
meeting has been conducted it reminds me of a story which General Jimmy
Doolittle told just a few weeks ago. It seem some of our Apparatus people
go on a fishing expedition every spring up in the Miramichi River which is
up north of Maine in a province of Canada and Jimmy Doolittle was one of
the fishermen who joined the expedition. He told of a young fellow who had
inherited approximately $600,000 and proceeded within a few short months
to spend it all. He was asked by his friends how he had spent it. And, he
said, well, about 1/2 was spent on loose women and liquor and the other
half I guess I just wasted.
When I got into the airport last night, I found I was very thoughtfully
to be picked up. I was told that I was to stay out at the Superstition Ho.
But, I had already made arrangements to stay at another hotel where I
usually stay when I come out. We had to make some hasty readjustments in
the schedule. When I tried to get Clair Lasher on the telephone and there
was quite a bit of confusion trying to get the call through, and finally
Ken Geiser came on the phone and Ken said, well, really, I'm stalling. I
said, well Gee, isn't Clair around? And Ken said. well, he's in the pooL
It wasn't until I got out here later that I found out on what basis he was
in the pool. For a while until I had the story straight I thought we had
the problem of finding another manager. But, it was nothing quite that
Then there is the story about the man who had just been appointed
president of a very substantial company and was being interviewed by the
press. The press asked him to what he attributed his appointment. "Is
it because you are an outstanding engineer?" No, he didn't know much
about engineering. "Were you an outstanding marketing man?" No,
he didn't think that had anything to do with it.
"Well, gee were you a good financial man, a good accountant and keep
track of expenses, etc.?" No. he didn't think that had anything to do
with it. The only thing he could think of was that one day he dropped his
personnel card and somebody stepped on it with their golf shoes.
Well, Bob Sheeley told me half of this audience has been with General
Electric for less than a year. This is just amazing, especially when I see
how well you folks did with this meeting. Of course the Company has only
been in the Computer business for a short time so naturally the members on
the computer team couldn't have been out here for too long a time. As you
probably know, the Department has doubled or more than doubled every year.
since its establishment. Now, I would personally like to welcome each of
you who have been with GE or transferred to the Computer Department and
the Industrial Electronics Division, and those of you who have come from
outside the Company. I especially would like to welcome you to a
membership in our General Electric family. What I have seen of the program
since I have been here. I think it is clear that you have gotten a little
bit of an inkling as to what company General Electric is. But, I don't
think you can get the full feel of what General Electric membership means
in so short a time. I'm certainly pleased that some think has been
communicated to you as a result of this meeting.
Now as new members of this family I think you are naturally interested
in the Company's and in the Computer Department's present and future role.
at least as I see it. You probably know you've joined a very large
company. In fact it's the fourth largest in the United States. Its annual
sales. in spite of the fact as Clair Lasher told you that we've been on a
plateau at about 4-1/2 billion dollars. This is a little misleading when
we talk about a plateau. because in a company as large as this. one that
represents probably 1% of the national income. there are always businesses
which are declining as well as those which are building up. So.
maintaining a plateau is nothing to be ashamed of. For instance. the
ordering of jet engines for aircraft which was a five or six hundred
million dollar business a few years ago, has reduced by a drastic rate.
not because General Electric leadership is on the rocks. but simply
because the need for jet engines as part of our
national defense policy is much less.
The Company employs about 3/10 of a million people and is owned by more
than 1/2 million share owners - it is a widely
diversified company. It is probably more diverse than any other company. I
think this is hard for people to realize because the other large companies
are large because they do the same thing over and over again. The
telephone company. it's a gigantic company. Their services are such that
it is quite possible for the president to understand it. This is true of
the automobile company. its true of the oil company and I think the steel
company had the bulk of their products in some 27 different product lines.
It's only when you come to a company like General Electric that the size
is made up of such tremendous diversities. In fact the biggest
business is conducted in 15 out of the 25 basic industries and that is
something which is quite a job incidentally to gather statistics unless
they are several years old and I'm not sure that it isn't larger than that
Someone estimated that at one time there were some 200,000 different
products in the Company lines not counting sizes and colors. I do know
these businesses are organized into more than 100 product departments of
which the Computer Department represents one of the most important. It is
a fact that the average General Electric product department qualifies in
its own right as one of the 500 largest corporations in the United States.
You will look at your Fortune magazine. it published the 500 largest
industrial corporations. in that list you will find companies which are
smaller than the average General Electric product department. General
Electric manufactures in 11 different countries outside the United States
and Canada and approximately 250 outlets in 94 countries and our
International GE people tell us that this is a broader coverage than any
other company of which they know.
Now historically. this is a company which has been pre-eminent in the
energy field. It has provided products to generate. transmit. switch.
convert and to transduce energy to both producers and users of
electricity. After all. a light bulb is a way of transducing electrical
energy into light. Appliances usually transduce either heat or torque. So
either from a producers point of view in our turbines and generators and
our appliances we are perfectly an energy business. But we also have an
important information handling background. and an even more important
information handling future.
Thomas Edison founded one of the companies which merged to become the
General Electric Company. At one time the company was even known as the
Edison General Electric Company. Now Edison as you may recall discovered
what was called the Edison affect. which described the phenomena of the
movement electrons from a hot filament. a phenomena upon which the
electron tube and the entire electronics industry was based.
The Company was active in early radio communications. A man named
Alexanderson. a very famous early General Electric engineer developed a
very high frequency alternator. High frequency for those days. it carried
his name. and was quite an engineering marvel. It brought about the high-powered
capability which permitted long range radio broadcasting. In
the early 1920's General Electric. together with the telephone company
established a company which they called RCA. as a Radio Communications Arm
for the United States. At that time no one expected radio to be important
for entertainment and broadcasting as such. Of course it did and with the
subsequent growth. the Government sought
to divest General Electric and the other contributors of RCA of their
ownership in it. The present General Electric Company Building at 570
Lexington Avenue. was originally built as the RCA building. This was one
of the assets which General Electric took over under the proceedings.
General Electric is also an early builder and user of computers. It had
some computers as early as 1920. I am told in fact that the General
Company subcontracted to IBM in World War II the first electronic
computer that the company ever built. During World War II the demand for
armament control together with the demand for greater engineering scope
and competence in electronics went a long way toward building a modern
information handling base in General Electric. Of course today. the
Company does more than a billion dollars a year in electronics and is the
largest electronic manufacturer in the United States. A fact which is not
as widely appreciated as perhaps it should be.
The Company's Defense Information Handling competence which was the
first to grow, principally because the big new market that developed in
the post War era offered an excellent opportunity to grow. Then the
industrial electronics market also began to grow a little later until
almost five years ago the Industrial Electronics Division was set up to
serve the Company's industrial electronics customers for information
handling products and systems. It was immediately apparent that the market
for industrial information handling was certain to have a strong systems
content. and we have as a company a strong tradition in systems. In fact,
it was this systems competence which led us to believe that information
and energy systems would no longer be separate in the future and that we
must be in the information systems business, if for nothing else just to
protect our energy business. Of course its a much broader market than that
but as a basis we had to do at
We realize that because we produced a substantial portion of the
equipment for energy systems we are in a good position to make combined
information energy systems.
However we lack the significant amount of systems ingredients for
industrial information systems. We did not produce the appropriate
computers or data loggers. for controls. Our sensor limit lines when
limited principally to the determination of electrical quantities and our
communications capabilities were just beginning to develop. We had to
develop at least a minimum number of initial missing links if we were to
become an important factor in the industrial control systems business. Let
alone being ready for the larger business-wide information systems which
we thought were inevitable.
In the past several years. your Company has made and is making a
substantial investment towards this end. I am very proud of what has been
Regarding our instrument X-Ray Department, a very substantial activity
aimed at establishing the company of a very important supplier of
electronic sensors covering the important. especially to the medical
Industry Control is applying modern automation control and computer
control techniques on an
industry basis, primarily the basic industries like steel and paper.
Our specialty control business has done a very bold and imaginative job in
applying servo and program control techniques to machine tool control.
Automatic inspection and automatic warehousing. The company is making
outstanding stands in communications - while we are in a leading position
today in mobile radio, and we are now coming up very fast in the point to
point and micro-wave field.
Last year we announced the first solid state multiplex equipment and as
you have just recently read we have established a subsidiary company which
plans to erect and operate a world-wide system of satellites to provide
international communication capabilities to an extent to which nobody even
dreamed of until just recently. Such communication competenance is going
to stand us very well in combined communications computering systems which
provide so much opportunity for the future.
The most of your are especially interested in computers for data
processing. So I will speak for a moment about their background in General
Electric. We got into the business as you know, by taking the full systems
responsibility for the Bank of America checking account automation
computer system. It incidentally, represents the largest single commercial
electronic order which has ever been taken. It was taken with only three
General Electric people assigned to the project. There was a real systems
order. Given the contract, we not only agreed to prepare the equipment,
but we agreed to such things as the amount of lighting which could be
involved. the number of employees, the square feet of floor space, the
amount of air conditioning, and guaranteed maintenance cost for six years.
Somebody even forgot to add the people needed for a second shift. So we
started out with an engineering problem which was twice as big as we
originally planned. It was a very significant contract, but we had thought
very naively that we would transistorize the Stamford Research Laboratory
model which the bank had developed previously and that we would be in the
computer business. But as your associates got into it more deeply they
found that unfortunately that they couldn't do this and solve the bank's
problem and meet the contract terms to which they had agreed. As a result
they spent an unplanned million dollars on systems engineering before they
came up with a solution.
All of that's behind us now. As you know, the system is working
beautifully and greatly exceeds all our guarantees and the contract was
completed last month on schedule. In connection with the job your
associates developed the magnetic character recognition system which is
now the standard for bank automation in the United States and Canada, the
United Kingdom and Australia, and is being considered by Italy and the
continent of Europe. This fete was accomplished over the objection of some
very stiff competition.
Overall I believe that the ERMA story represents one of your most
amazing business achievements of the decade. You and your associates in
the Computer Department can take great pride for the record you have made
for yourselves on this project. You
subsequently obtained orders for systems --the last information I had was
21 but I understand you have some more since then - from competition with
the oldest and best established bank equipment firms.
However, the Department undertook to develop the electronic portions of
the 304 computer from National Cash Register. These two projects provided
the base on which to build this organization team, dedicated to become one
of the principal factors in the computer business. As the department grew
in strength and stability it began to develop the process computer
business, and to establish a general purpose data processing business.
Both of these businesses have already grown to the point that earlier this
year it seemed appropriate to assign section status to the process control
business and to transfer it to another organization.
This was done to free up the Computer Department for the major assault
on the data processing business which we are undertaking, and to still
further progress our leadership in computer control of industrial
processors. In your scant five years of existence you have achieved quite
a few "firsts" already. First you accepted and successfully
completed on schedule the largest single industrial electronic order in
history. You developed a now widely used magnetic ink character
recognition system which is perhaps the most significant contribution for
information handling technology since the invention of the punched card.
You were the first to use a computer to design computers. Although some
four years later Bell Laboratories has announced that they now have done
it. You developed and put into operation the first two operational
solid-state computer systems. You operate the Redstone Arsenal Computer
Center which is the largest in the world. Here all of the pre-fire
calculations were made for the first successful United States satellite
shots. You developed and made available the most advanced programming aids
yet offered to the market. You have designed and are installing the most
extensive on-line computer communications system in industry today. As
Clair Lasher mentioned this FASO system hooking
12,000 miles of communication lines. serving 56 warehouses and 34 product
departments. You've also produced a number of
"firsts" in computer control. such as the first steel mill
control and the first steam power plant control.
Several years ago I was occasionally asked if General Electric really
intended to be an impressive factor in the computer business. This
question has not come to my attention recently. but
in case there is the slightest doubt. I would like for the record to point
out that the company not only intends to be an important factor but plans
to achieve at least the number 2 position in the computer business in the
period immediately ahead. Beyond that time I see no reason why we cannot
eventually successfully challenge the present number 1 encumbent. The
first position comes naturally to General Electric. As a result of your
meetings I am sure that you are familiar with the newest products of the
Computer Department. I am also sure that you must also realize that we are
working towards a full line of
data processing equipment. Your customers need this equipment on the
advanced information systems it makes possible.
We are in an economic era in this country. where the need to solve
large and complicated problems on an integrated basis is growing at such a
rate that it is now profitable to solve them.
Let's look at some of the distinctive General Electric strengths that
you and I can use to obtain General Electric pre-eminence in this
information handling market. First. we have already received
a substantial acceptance in the banking field. but we can and will
continue to build on it. Second we have a good start with out success at
Western Reserve University in the Information Storage and Retrieval
market. This is an outstanding market opportunity and one in which our
military experience in the indexing information field should certainly
payoff. Third. we have the ability to assemble data processing and the
communications systems. The FASO system represents one of the most
advanced yet proposed. Together with your company's communications
strength we possess an outstanding opportunity in this market. Fourth. we
have good competitive equipment now and are rapidly working toward a full
line. including unique peripherals. Fifth. we have in General Electric's
GECOM the hottest programming package on the market. We will continue to
lead in such programs. Sixth. we have an Internal Automation Operation
which generates and gathers information to help a user adapt his needs to
better use data processing. These people offer a unique service that can
help you better serve your customers. Seventh. we have regional vice
presidents and Utility and Apparatus sales staffs to help you with
customer contacts. Eighth. we have five company laboratories devoted to
computer technology with the excellent competence already in place in your
own department. You also have ample capital to develop and produce those
products you most need to meet your customer's needs. General Electric
treasurer. John Lockton. recently stated that the General Electric Company
could support a level of business upon $11 to $12 billion a year. This is
three times our present level and ten times the size of IBM. Ninth. we
have flexibility - we are not limited. but need to make policies which are
compatible with a large number of existing systems in customer's hands.
Tenth. we can provide integrated computer systems. whether the integration
is the communications or matched process control systems. Eleventh. we can
use the Company as a laboratory to tryout new systems and as an exhibition
place. And finally. we have a broad established international operation to
aid in the off-shore markets.
Now. we took a look at twelve of these GE advantages compared with
those of principle competitors and we found that no single competitor has
more than six. So you have at least a 2 to 1 advantage in those areas.
In the last few minutes I tried to sketch a little background. There is
one item however. which I have not mentioned. This is the part that sales
and marketing must play in this venture. We are in a business with a
strong marketing flavor. The business machine companies invented modern
marketing. Today NCR and IBM have inherited the tradition of Patterson.
the founder of NCR. who also started modern selling. John Waters Grant.
and IBM's Watson. were both able apprentices. and these companies today -
and their the present day marketing competence can be traced back to these
gentlemen. Today. my own respect for your chief competitor, is not based
on their engineering and not on their manufacturing competence, but for
their marketing competence. You gentlemen are the principal players in a
big league that is perhaps even bigger than you think. Of course you know
that the past and projected growth of the electronic data processing
field. But perhaps you don't know that now that your company has ordered
the data processing business for real. it is only logical to expect that
additional related products may from time to time be introduced. The
marketing organization of which you are a vital part. provides a logical
channel to take such products to market. So - as you look down the road.
you might only have the opportunity to play for big chips in the big
league computer contest. but you also have the opportunity to build what
can be the predominant business marketing organization of the country. You
are part of a great company. You are in the most challenging and dynamic
of the Company's new businesses and one which can through the contribution
that makes the productivity. provide a tremendous boost for the free
world. Your Department has already shown what it can achieve against the
stiffest competition. There's only one hitch - illustrated by a story of a
farmer and his wife who were asleep in the middle of the night and they
were awakened by their grandfather clock when it began to chime. It got up
to twelve and then went on to 13 - 14 and finally got up to 16 and then 17
before it stopped. The wife turned to the farmer and she said "John.
John. what on earth time is that?" He said. "Martha. I don't
know. But there is one thing that is sure. that it's never been so late
before. We better get up and go to work." So let's get up and go to
work and God Bless you.
to Table of Contents
A Portrait of the General Electric Computer Department
(They are not in Cowboy outfits!)