GE Joins the War Against Bad Profits

There is good news to report from the battlefront. GE has joined the growing list of companies that have embraced NPS as the weapon of choice in the struggle to eliminate bad profits and re-energize profitable growth. GE Healthcare piloted NPS during 2005, and the results were so promising that this year GE is deploying NPS across all of its businesses worldwide.

In GE’s 2005 Annual Report, CEO Jeff Immelt indicated his personal commitment to the Net Promoter initiative, devoting a full paragraph of his letter to stakeholders explaining the NPS rollout):

“Lastly, we are using a simple metric called Net Promoter Score (NPS) to measure how customers view GE. NPS creates a view of customer loyalty. The absolute score is less important than the trend. We learn from both promoters and detractors. Most importantly, we have been able to associate NPS improvement with growth. NPS is simple and we can use it across the Company. Our ultimate goal is to use improvements in NPS as a measure in how leaders get compensated.”

Why is this such good news? When a widely admired firm such as GE announces a public commitment to NPS, people notice. Moreover, few organizations can equal GE’s capacity to deploy initiatives to generate superior results. Remember what GE accomplished with Six Sigma over the past decade. GE is likely to serve as the de facto best-practice model for many other organizations aspiring to deploy NPS.

In fact, GE execs are already comparing NPS to Six Sigma. Both involve much more than simply a measurement process; they embody a full set of tools and disciplines that must be learned and incorporated into daily business practices, all the way from senior execs at headquarters to employees on the front lines. When Business Week recently asked GE Healthcare’s Chief Quality Officer, Pete McCabe, about his expectations for NPS, he replied: "I have little doubt that this will be as big and long-lasting for GE as Six Sigma was."

Beginning in 2006, all of GE’s businesses will begin reporting NPS. They join a growing list of companies, including SAP, American Express, Intuit, Fireman’s Fund, eBay, and MSN, all of which have begun to systematically measure and manage NPS.