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Innovation remains the catchword at General Electric Co., but the means of its achievement depend not only on developing new products or services, it depends also on a plan. As the company passes $27 billion in sales and $1.5 billion in earnings, G.E.'s widely publicized strategic‐planning system has led the company to invest in everything from ultrasonic cardiac scanners to high‐technology robots and information systems. Planning Review asked Steve M. Cohen, a Review contributing editor, to talk about G.E.'s strategy with William E. Rothschild, staff executive for corporate planning development. Excerpts from their discussion follow.

As industries restructure and new challengers emerge in established markets, it is vital to strategically assess these nontraditional competitors.

The decade of the 1980s was the decade of analysis, portfolio management, and process development. The emphasis was on strategic planning and not on strategic leadership. Little attention appears to have been given to ensuring that the right leaders and the right teams were in place to implement the strategies.

A lot of major corporations are slashing staff positions and dispensing with platoons of experienced staff specialists, most of whom had developed methodologies proving their own indispensability. Planning has been one of the professions suffering from this trend. But I believe we are really witnessing a revolution in management's attitude toward staff.

To compete in the new global environment, companies must constantly map the terrain in which they operate, alert for signs of change. Managers must move beyond the narrow concepts of segmentation and begin to think in terms of strategic arenas in order to be successful.

In October 1984, the Chairman and Chief Executive Officer of the McDonnell Douglas Corporation in St. Louis, Missouri, directed that each of the company's major components establish a competitive intelligence organization to improve its understanding of the competition. One premise behind this directive was that an assessment of the competition in the marketplace was essential, and that the company's current informal methods of competitive‐intelligence gathering were inadequate. Another premise was that only ethical and legal data‐gathering techniques were to be used, especially since there was so much information available from a wide variety of public sources. The directive specified that the overall process must be action oriented with a focus on analysis, assessment, and communication.

What is the relationship between a leader's personal characterisitics and the life‐cycle stage of a business? How does a company's strategic competitive advantage influence the effectivenss of the leader? When strategy changes, must leadership also change?

Is strategic planning a lasting management tool or just another management fad? Four factors—top management commitment, sound segmentation, training and development, and periodic reviews—will spell success. Planners who ignore them can expect strategic management programs to fail.