Have you seen the recent commercial where a young son tells his parents that he’s going to work for GE—as a software developer? Their response was one of bewilderment. In their minds, GE is a manufacturer. The commercial exemplifies the idea that the mental models of leaders—their attitudes, behaviors, and beliefs—create organizational and industry models as well as customer and investor perceptions. In this case, the mental model behind GE has been rooted in manufacturing for decades.

That’s why Jeff Immelt, CEO of GE, is working so hard to change his own mental model of the industrial giant that he runs, along with his hundreds of thousands of employees, customers, suppliers, and shareholders. His approach to changing his mental model is simple: State the obvious. Digital platforms and virtual networks are changing everything—customer purchasing (think Amazon), employment (Uber), investments (Betterment and Wealthfront), and value creation. Based on this digital reality, Immelt is creating a compelling future state for GE that is exciting for all his stakeholders. In the process, he is also distancing himself from the predecessor company Jack Welch created.

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