Since before writing Create Marketplace Disruption I've been a fan of GE.  The company is the only company to be on the Dow Jones Industrial Average since started 100 years ago.  While so many other companies have soared and failed, GE has continued to adapt and grow.  But it's been hard to be a GE proponent the last year.  Even though GE continues to follow The Phoenix Principle, fears about the recession, GE's massive commercial real estate holdings, and risks in GE Capital drove the stock from $40 a year ago to $6.50!!!  A whopping 84% decline!!!

I've also long been a fan of Intel.  Intel transformed itself from a memory chip company facing horrible returns into a microprocessor company by maintaining a healthy paranoia about markets and competitors.  The company has worked with Clayton Christensen over the years to not only keep up with sustaining innovations, but to implement Disruptive ones as well.  But Intel was recession-slaughtered over the last year, losing half its value. 

It's been enough to make an innovation lover cry.  But, simultaneously, it's not clear that over the last year ever stock has been accurately priced for its long term value by the market.  As we know, fears about bank and real estate failures have simultaneously destroyed investor confidence while pushing up cash needs.  Don't forget that Warren Buffet made an insider deal to provide money to GE with warrants to buy the stock at $23 – about double the current value.  So perhaps the bloodbath in these two companies went beyond what should have been expected?

Today there's more heartening news.  "GE and Intel join forces on home health" is the headline. 

GE and Intel both have identified that health care will be a growing market into the future, expecting the home health monitoring business alone to grow from $3B today to $7.7B by 2012.  By keeping their eyes on the future, both companies are showing that they are investing based on future expectations, not just historical performance.  And, both have identified opportunities that reside outside their existing health care markets, such as the medical imaging market where GE is currently strong.  Thus, they are investing $250million into a new joint venture company to develop new markets.

This shows the earmarks of good White Space.  It's focused on developing a growing future market, not trying to preserve an existing market position.  It's outside the existing business manager's control, thus given permission to develop a new Success Formula rather than operate within existing constraints of existing businesses.  And the project is given enough resources to succeed, not just get started

Maybe now is a great time to buy stock in these companies?  GE has gone out of its way recently to divulge information about its real estate and finance units to analysts in order to be more transparent.  And the company is demonstrating a commitment to the behaviors, future-oriented planning and White Space, that have long helped the company grow. 

Now, if we could just start seeing the kind of disruptive behavior out of Chairman Immelt that former Chairman "Neutron Jack" Welch demonstrated my comfort level could go up even more…..

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