Dynamist Blog

Smart and Pretty

The NYT's Claudia Deutsch reports on how GE saved its appliance division with...the substance of style.

"We used to care only that people weren't alienated by the look of our appliances," said Paul Klein, general manager of brand and advertising for GE Consumer & Industrial. "But we've realized that affluent people think of their kitchen as d├ęcor, even if a caterer is doing the cooking."

Financial results are great, Deutsch reports--quite a contrast to the days when GE wanted to sell the division, only to find that no one wanted to buy it.

One result is that G.E.'s appliance sales were up 16 percent in the first quarter of 2006, and analysts expect them to keep growing. The unit's return on total capital was 60 percent last year, compared with 16.4 percent for the company as a whole. And the appliance business generated $700 million in cash.

As I often point out in speeches, usually by playing the "Interrogation" commercial, GE has realized the importance of aesthetics in one division after another--a striking, bottom-up strategy from a hard-nosed engineering- and finance-oriented company. That's why I used GE Plastics as the lead example in chapter one of The Substance of Style.

As the ad says, you can have beauty and brains.

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