GE - Build, move, cure and power

Build, move, cure and power – those four words sum up the business of GE, a multinational company with 300,000 employees in more than 150 countries, including approximately 4,800 in Japan.

GE has a long history with Japan … all the way back to the late 19th century when company co-founder Thomas Edison used a filament from a bamboo grove near Kyoto for his incandescent light bulb. Today, GE in Japan is active in oil & gas, energy management, power & water, healthcare, aviation, capital and real estate.

Accelerating growth for GE’s various businesses through an approach as one GE in Japan is Mark Norbom, president and CEO of GE Japan. Born in Washington DC, he graduated from Pennsylvania State University in 1980 with a bachelor’s degree in honors economics. Norbom began his career with GE in 1980 and, after various roles in finance and business development in the U.S., moved to Taiwan in 1993 to head GE Capital’s efforts in that market. He then had stints in Indonesia and Thailand before coming to Japan in 2000. After 23 years with GE, he joined Prudential Corporation Asia at the end of 2003. In October 2007, he rejoined GE as president & CEO of GE Japan, and in April 2008, he was appointed president & CEO of GE Greater China. He returned to Japan in March 2011.

Japan Today visits Norbom at the GE offices in Akasaka to hear more about the business in Japan.

How much autonomy does GE give each country?

Decisions up to a certain level are delegated to each country, especially concerning localization of the business. So we get a fair bit of latitude to operate within certain parameters. The company’s management philosophy has become more global, so now Global Growth Operation (GGO) in Hong Kong functions as our international headquarters.

How well known in Japan is GE?

We have a long history in Japan -- over 135 years – and the story of Thomas Edison getting a filament for his light bulb from a bamboo grove near Kyoto is very well known because it is taught at school. Overall, there is very good name recognition globally.

How important is the Japanese market?

Globally, our total revenue was about $147 billion last year. Of that, Japan accounted for around $5 billion.

How have the last two years been since the earthquake?

To meet emergency orders of energy, we shifted our orders from around the world to bring them here after the disaster. We sold aircraft engines strapped onto a platform to generate electricity, plus gas engines. In 2012, we grew our industrial business revenue by 8%, even though the market was flat.

Our healthcare business continues to grow. It’s our biggest industrial business here with revenues of more than $1.5 billion. In all, healthcare, energy and aviation make up 95% of what we do here on the industrial side.

How are the other sectors doing?

The three GE Capital businesses make up about 30% of our revenue and all were profitable last year.

The first is our real estate business which owns property -- primarily office and residential, some retail. We buy and refurbish buildings and rent them out. Or we provide debt against real estate assets as well. It has been an up-and-down business but right now, the market is bouncing back. Our second is a commercial lending and leasing business which does a lot of work with small and medium-sized enterprises. We do collateralized lending and leasing. The third is aircraft financing – leasing and providing loans for airlines to buy aircraft. We know a lot about that business because we make engines. The lending part of that business is structured out of Japan.

What would you say are GE’s strengths?

Our biggest single advantage is our technology. Of our industrial revenues, we re-invest 5-6% back into R&D and new product development. That’s about twice the level the average company in the U.S. would invest. We spend a lot of time talking with local governments in Japan about our technology and really focusing on our customers. We’ve especially done a lot of reconstruction work in the Tohoku region, with the Miyagi prefectural government.

You mentioned before that the market in Japan is flat. How do you grow the business in a flat market?

Japan is still the 3rd largest market in the world by GDP. You have to be able to find pieces of the market that are growing. If you can’t, you’re not looking very hard. We have tremendous strength in technology, so we build partnerships on the tech side, be it manufacturing processes or materials. And we’ll build those partnerships not necessarily just to do business in Japan but to also help our global business. Last year, for example, we created a joint venture with a Japanese company which makes a material that is stronger, lighter and more temperature resistant than anything we have put in our aircraft engines. That means it is more energy efficient. It will be a big part of our next generation aircraft engine which will be more than 10% more fuel efficient than engines are today.

In which sector is product localization more common?

Our healthcare business is very localized and we have an R&D center here for that. We try to use whatever our local strengths are to tackle local markets. We gear a lot of our growth strategy around what is needed. The focus initially was building high-end products that would sell well in Japan. Then we recognized that we had a development expertise here that we could use for GE globally. Our Japan business had a key role in developing our Vscan product, which is a portable ultrasound machine which doctors can use remotely. It is ideal for rural operations and clinics.

Looking ahead, where do you see growth opportunities in Japan?

One area is the energy revolution: changing the way energy is produced, consumed and managed. We have a lot of expertise in thermal and renewable energy, plus energy management systems. A second is ongoing reconstruction of Tohoku and a third is in the field of aging demographics.

Is GE Japan a popular company to work for?

I think so. We get a pretty good flow of job applications because we are global, financially strong, and we have a lot of leadership development programs. We hired about 40 new graduates for 2013. Currently, we have some highly skilled staff and it is due to them that some of our business lines are led globally out of Japan.

What areas of the business are you hands on and what areas do you prefer to delegate to your team?

My role is to bridge the businesses and bring all the strengths and advantages that GE has to the market. I am hands on with large customer relationships, like big trading companies, banks, industrial companies, where you have to have senior engagement on both sides. I also get involved with global strategic accounts, cultivating relationships with those accounts that are generally cross-business in nature. And I spend a great deal of time with government relations.

What CSR (corporate social responsibility) initiatives is GE Japan involved in?

We were one of the founding members of the Operation Tomodachi initiative after the March 11, 2011 disaster. Besides that, every year, we go to schools and we visit classes of elementary school kids, aged 7-9, and tell them about technology, such as wind turbines, for example. We explain the technology and help them build little scale models. They color them in and hold them in front of a fan. Kids get a bang out of classes like that.

We have another signature school program “Be an inventor”. In this program, we do things like: “What invention would you use to improve your neighborhood?” and have kids come up with their proposals and make presentations in front of the class. Some kids would say they’d make a robot that would eat trash. You’d get all sorts of fun answers. It makes them think. The schools love it and are always asking us to come back.

Besides school visits, we also support hearing-aid dogs that respond to emergency situations or let their owners know of someone is at the door.

What is a typical day for you?

I usually get here around 8 a.m. I don’t believe in big meetings. I think those are counterproductive. I also believe that if you can walk to someone’s office and talk to them, that’s better than sending an email. Face-to-face contact is more productive. I may go out during the day to meet clients. In the evenings, I have a lot of dinners. Invariably, I spend half a day on Saturday or Sunday catching up with emails.

How do you like to relax?

I like to play golf. I spend a lot of time cooking. Tokyo is fantastic for food. The quality of ingredients and the number of great restaurants are amazing.

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