General Electric

Imagination at Work

Miles Cudworth John Dickmann Christopher Juhlke Ben Gaither Zachary Krause

History
General Overview

Welch

Culture
How it started

Immelt
Products

EVO

• The General Electric Company (GE) is a multinational American technology and services conglomerate incorporated in the state of New York. • Founder: Thomas Edison • Business type is public

• Chairman and CEO: Jeff Immelt
• Vice Chairman, CFO: Keith Sherin • Headquarters: Fairfield, Conneticut • Industry: Conglomerate (mixture of several unrelated companies)

History
General Overview

Welch

Culture
How it started

Immelt
Products

EVO

• In 1876, Thomas Edison invented one of the greatest and useful inventions ever; the incandescent electric lamp.

History
General Overview

Welch

Culture
How it started

Immelt
Products

EVO

• In 1878, Thomas Edison founded the Edison General Electric Company • By 1890, Edison had organized his various businesses into the Edison General Electric Company.

. in a merger arranged by financier J. with its headquarters in Schenectady. Elihu Thomson and Edwin J. P. these two major companies combined.Houston Electric Company. • Due to Thomson’s failing success in 1892.History General Overview Welch Culture How it started Immelt Products EVO • In 1879. New York. Houston formed the rival Thomson. Morgan to form the General Electric Company.

History General Overview Welch Culture How it started Immelt Products EVO • In 1911 the National Electric Lamp Company (NELA) was absorbed into General Electric's existing lighting business. . GE then established its lighting division headquarters at Nela Park in East Cleveland which is still there today and has been named a historic site.

History General Overview Welch Culture How it started Immelt Products EVO • Radio Corporation of America (RCA) • NBC Universal (except NBC Radio) • Genworth Financial • The Electric Bond and Share Co • GE Commercial Finance • GE Consumer Finance • Genie • GE Infrastructure • GE Money • • • • • • • • • Telemundo GE Healthcare Transamerica Finance InVision Technologies Smiths Aerospace Vetco gray SABIC GE Security GE Industrial .

History General Overview Welch Culture How it started Immelt Products EVO • • • • • • • • • Light bulbs Freezer Refridgerators Washers Dryers Ovens Air conditioners Humidifiers/dehumidifiers Plastic bottled dispensers (pop/water) • • • • • Jet Engines Locomotive engines Ventilation systems Water systems Food compactors & Disposers • Cooking foodstuffs • Ventilation systems • Turbines .

History By the numbers Welch Old Strategy Culture Immelt After EVO New Strategy Jack Welch • Yearly Shareholder Return (20-year period) 23 % • Increase in Total Shareholder Wealth: $380 billion .

History By the numbers Welch Old Strategy Culture Immelt After EVO New Strategy • Welch’s Corporate Model: – High Discipline – High Efficiency – Cut costs whenever possible • Per Annum organic growth rate: – Only 4% • How did GE still achieve high yearly returns? .

History By the numbers Welch Old Strategy Culture Immelt After EVO New Strategy • “Change before you have to” • Transition from Manufacturing to Services – Acquisition of RCA’s NBC in 1986 • Eventual expansion of NBC division .

History By the numbers Welch Old Strategy Culture Immelt After EVO New Strategy .

S.History By the numbers Welch Old Strategy Culture Immelt After EVO New Strategy • Implementation of lean Six Sigma methodology for manufacturing and service processes • Originally established in U. by Motorola • Goal: meet or exceed level of 3.4 defects per million operations within any process .

History By the numbers Welch Old Strategy Culture Immelt After EVO New Strategy • • • • Six Sigma Launched by Welch in 1995 Implemented initially for 200 projects By 1997. statistical process control used in 6. training sessions $320 million reported (1998) in benefits from Six Sigma implementation .000 GE projects.

History By the numbers Welch Old Strategy Culture Immelt After EVO New Strategy • Welch’s leadership strategy: – Achieve #2 ranking or better in each business category – Treat even the largest. formal business informally – General Electric as “The Grocery Store” – Known by employees on first name basis .

shareholder value. Welch • Continue to differentiate GE through its businesses. reward independently for results .History By the numbers Welch Old Strategy Culture Immelt After EVO New Strategy • Sustaining Welch’s historic growth • Determining new sources for growth • Shareholder value. shareholder value – Nobody else has created greater shareholder value than Mr.

‖ . • ―We’re passionate about making life better with new ideas and technologies. What makes them so unique is that they are driven to make life for everyone better and that motivation is what drives them to succeed.000 employees in over 140 countries.History General Overview Welch Imagination Culture CECOR Immelt EVO 4 Commitments • The people make GE • GE has over 300.

including roles in GE's Plastics. In 1989 he became an officer of GE and joined the GE Capital Board in 1997. Mr.has worked to transform GE into a more global. Jeffery Immelt • Immelt has held several global leadership positions since coming to GE in 1982. • • . a post he has held since September 7. 2001. Immelt also laid the vision for GE's ambitious ecomagination initiative and has twice been named one of the World's Best CEO's by Barron's. Jeffrey R. Mr. in 2000. Immelt was appointed president and chief executive officer.History General Overview Welch Imagination Culture CECOR Immelt EVO 4 Commitments Chairman & CEO. Immelt is the ninth chairman of GE. Immelt …. A couple years later. Appliance. diverse and customer-driven culture. Jeffrey R. and Medical businesses.

2004 – Monthly reviews of each IB begins • Sep. 2004 – Ecomagination project begins • Jan. 2005 – CECOR framework initiated .History General Overview Welch Imagination Culture CECOR Immelt EVO 4 Commitments • Sep. • Nov. 2003 – Immelt asks for 5 IB’s per dept. 2003 – Immelt selects 34 IB’s • Feb.

Lorraine Bolsinger VP Ecomagination . broadly expanding our product portfolio through technical and commercial innovations.‖ -Jeffrey Immelt CEO.History General Overview Welch Imagination Culture CECOR Immelt EVO 4 Commitments • ―Ecomagination is completely revolutionizing the way we collaborate with customers. facilitating enlightened policy dialogues from Washington to Beijing. motivating employees around the world and attracting new talent on the campuses where we prospect for tomorrow’s GE leaders.

History General Overview Welch Imagination Culture CECOR Immelt EVO 4 Commitments • Water • ABMet® Technology • Advanced Membrane Technology • Desalination • Homespring Central Water Purifier • Permatreat EPP® • ZeeWeed® Membrane Technology • Lighting • • • • • Compact Fluorescent Lighting Diamond Precise® Lamps Homebuilder Program Halogen HIR™ Lamps LEDs — Refrigerated Display Lighting • LEDs — Signage & Architecture • LEDs — Transportation Signals • T8 Linear Fluorescent Lamps .

6+ Combustion System • • • • • • • • • • • • • Dry Low NOx Combustion System (DLN 1+) Boiling Water Reactor H System™ Turbine Jenbacher Biogas Engine Jenbacher Coal Mine Gas Engine Jenbacher Landfill Engine Kn3 Optimization Software LMS100 Gas Turbine Photovoltaic Technology Powerwave+™ PulsePleat® Pleated Filter Elements UltraScan™ Duo Wind Turbines X$D ULTRA® Motor .History General Overview Welch Imagination Culture CECOR Immelt EVO 4 Commitments • For the Home • • • • • • Dishwashers with SmartDispense™ Technology Front-Load Washers Hot and Cold Water Dispenser Profile Harmony™ Washers Refrigerators with ClimateKeeper2™ • Energy • • • BCL304e Series Centrifugal Compressor Cleaner Coal DLN 2.

Fleet Services CFM56-3 Upgrade China Mainline Evolution Evolution™ Series Locomotive GE90-115B Aircraft Engine GEnx Aircraft Engine Hybrid Locomotive Kazakhstan Evolution™ Locomotive LM2500+ Marine Engine Russian-Built Locomotive Modernizations .History General Overview Welch Imagination Culture CECOR Immelt EVO 4 Commitments • Transportation • • • • • • • • • • Capital Solutions.

History General Overview Welch Imagination Culture CECOR Immelt EVO 4 Commitments • Calibrate What industry are you in? Who are the customers and what do they need? • Organize Is the go-to-market plan aligned with the value proposition? Are you prepared to implement? • Explore What are our potential avenues of growth? Which ones will you target? • Realize Will you meet your revenue and income plans? How will you measure customer and GE impact? • Create What are our best ideas? What is the customer value? .

. • GE is growing its research in such technologies from $700 million in 2005 to $1.History General Overview Welch Imagination Culture CECOR Immelt EVO 4 Commitments • 1) Double investments in clean R&D • GE invested $900 million in cleaner technologies in 2006.5 billion in 2010.

• GE will grow revenues in products and services that provide significant and measurable environmental performance advantages to its customers – to at least $20 billion in 2010. with more aggressive targets thereafter.History General Overview Welch Imagination Culture CECOR Immelt EVO 4 Commitments • 2) Increase Revenues from Ecomagination products • GE has increased its ecomagination pipeline by 50% over the last year – from 30 products to 45. • 2006 revenues at $12 billion. . orders and commitments have increased to $50 billion.

including reducing the intensity of its GHG emissions 30% by 2008. . • The company will reduce its greenhouse gas (GHG) emissions and improve the energy efficiency of its operations . GHG emissions from operations have been reduced by about 4% from the 2004 baseline. and improving energy efficiency 30% by the end of 2012 (all compared to 2004). GHG and energy intensity have been reduced by 21% and 22% respectively compared to 2004. This will amount to an absolute total decrease of 1% from 2005 emissions.History General Overview Welch Imagination Culture CECOR Immelt EVO 4 Commitments • 3) Reduce greenhouse gas emissions • GE is on track to reach its internal commitment.

• GE is keeping the public informed through its Ecomagination Web site. dozens of global conferences.History General Overview Welch Imagination Culture CECOR Immelt EVO 4 Commitments • 4) Keep the public informed. and stakeholder events. .

sales growth. with less emphasis on the bottom line – Risk • Invest billions in ―Imagination Breakthrough‖ projects to expand GE products and services – Experts • Much lower executive turnover rate. bring in more outsiders to provide industry-specific expertise – Portfolio • Spent more than $60 billion to bolster GE’s mix of businesses .History Culture Shock Welch Imaginations Culture Immelt EVO Portfolio Shuffling Shift from Past • Immelt’s shift in corporate mindset through – Pay • Linking bonuses to new ideas.

GE evolved into a corporation based on creativity and organic growth • Immelt tailored GE’s long-cherished corporate structure to be more conducive to an increasingly global marketplace • Imagination Breakthrough’s (IB’s) proposals were a staple of new corporate culture.History Culture Shock Welch Imaginations Culture Immelt EVO Portfolio Shuffling Shift from Past • Under Immelt’s Leadership. requiring innovative marketing strategies and product ideas .

History Culture Shock Welch Imaginations Culture Immelt EVO Portfolio Shuffling Shift from Past • Project’s receive billions of dollars in funding • Each proposal must aim to either take GE into a new line of business. geographic area. or customer base • Must provide GE with $100 million in incremental growth .

History Culture Shock Welch Imaginations Culture Immelt EVO Portfolio Shuffling Shift from Past • Immelt’s main challenge was to alter the fundamental beliefs of GE’s ―number-hitting‖ culture • Promotions no longer must come from within GE. but rather from those who are most adaptive and open to change • Recruiting outsiders is a crucial component to Immelt’s innovative corporate culture • Managers must be passionate about their respective business division and experts in the detail of the particular industry .

strategy.History Culture Shock Welch Imaginations Culture Immelt EVO Portfolio Shuffling Shift from Past • This innovative management strategy drew stark contrast to the ―Six Sigma‖ culture of Jack Welsh • Intangible areas of creativity. security. and customer service were given priority over ―making your numbers‖ • Increased investment in high growth markets of biosciences. cable and film entertainment. and wind power • Focus on research facilities has led to rapid increase in product development Jack Welch Jeffery Immelt .

History Culture Shock Welch Imaginations Culture Immelt EVO Portfolio Shuffling Shift from Past • Media Content – Acquisition of Universal provides GE with the opportunity to expand in the entertainment industry • Biosciences – Investment in Amersham allows GE tap into the markets of diagnostics and personal medicine • Security – Fire and Industrial security giant Edwards Systems • Water – Ionics and Osmonics water filtration systems • Renewable Energy – GE Wind Energy .

History History Welch EVO Culture GLM Immelt Hybrid EVO •GE started serving the rail industry in 1918 in North America •Dominated the rail industry by the 1990’s with the introduction of the AC4400 series locomotion •Introduced the AC6000CW in 1995. selling only 207 of 6.000 units over 5 years •The EPA upset the rail market in 1997 when it announced strict emissions improvements to locomotion's by 2005 . dubbed the ―superloco‖ but failed miserably.

2005 •―Make or break‖ project for GE Transportation •―Paying for the sins of the past‖ .History History Welch EVO Culture GLM Immelt Hybrid EVO •Became an Imagination Breakthrough project in 2003 due to the need to conform to the new regulations •Monthly progress reports • Official launch date was set at January 1st.

a single Evolution™ Series locomotive will consume 189. . • Compared to our locomotives built in 2004.History History Welch EVO Culture GLM Immelt Hybrid EVO • Compared to locomotives manufactured 20 years ago.000 fewer gallons of fuel in its lifetime – enough to power another Evolution™ Series locomotive for seven months. • If every freight train in North America were pulled by an Evolution™ Series locomotive. the annual reduction in nitrogen oxide emissions would be equivalent to removing 48 million cars from the road each year. GE's Evolution™ Series locomotive produces 83 percent fewer particulates and 60 percent fewer nitrogen oxide emissions.

committed $100 million in 2003 to build 50 Evolution Locomotives to lease for $1 a year •Goal to log 5 million miles in the year •Sales reps had positive feedback.History History Welch EVO Culture GLM Immelt Hybrid EVO •―Leap of Faith‖. sales reps pressured Immelt to drop price but he refused •By October 2004. and so did orders for the EVO engines. 100% of the 600 machine capacity had been sold out •By mid-2006. there was a backlog of 1. oil prices had nearly doubled. By the launch date in 2005.500 locomotion's on order. increasing GE’s 70% market share and making EVO a poster-child success of IB’s . but not a single firm order early 2004 •Predictions estimated selling only 30 of 600 possible in 2005.

Kazakhstan. serves 90% of world •Orders from China.History History Welch EVO Culture GLM Immelt Hybrid EVO •Needed to go international •Hurdles: •Different size gauges. move manufacturing to country . weight limits. •Government owned railways •Smaller order quantities (10-15) •Developed ―Global Modular Locomotive‖ (GML) •Some ideas taken from EVO •Lego-like construction. etc. Australia •After initial orders.

introduced Hybrid Locomotion as next Imagination Breakthrough (IB) for GE Transportation •Goal of reducing fuel consumption 15% and emissions 50% •Cost would post-pone EVO’s international marketing •More and more were moving away from fossil fuels •Three years into project.History History Welch EVO Culture GLM Immelt Hybrid EVO •December 2006. seen as a ―worthwhile experiment that didn’t work out‖ •Are still working on it. release date in 2010 .

“Jack Welch Online Image 1”. Advertising”.html>. Hall. Diane (2005). 18 June 1998 <http://www. Bennett. C.html>.ecomagination. “Jack Welch’s Encore”.businessinnovationinsider.. 2008 from Business Source Premier database. BusinessWeek. N.ge. “Chart: GE’s Changing Mix”. 6 March 2008 <http://ge.businessweek. Online posting.Works Cited Bartlett. .html>. 6 March 2008 <http://www. Retrieved Feb. 28 October 1996 <http://www. Online posting. History. Online posting. “How Jack Welch Runs GE”.businessweek. Business Week.html>. BusinessWeek.jpg>. Business Innovation Insider. 28 October 1996 <http://www. “GE: Our Company: Leadership. “GE Ecomagination: Home Page”.com/1996/44/b34991. Culture. 17.. 25 June 2007 Brady. BusinessWeek. “The Immelt Revolution”. Online posting.com/1996/44/b34993. B. 6 March 2008 <http://nymag. “Jack Welch Online Image 2”. GE Corporate Website. BusinessWeek. 28 October 1996 <http://www.com/daily/intel/20070123welch.com/site/index. Online posting. Harvard Business Review. Online posting.com/Jack%20Welch%202. Online posting.html>.com/1996/44/b34993.businessweek. New York Magazine.com/company/index.html>. “GE’s Imagination Breakthroughs: The Evo Project”. 6 March 2008 <http://www.businessweek.com/1998/23/b3581001.jpg>. Online posting. “GE’s Changing Mix”. GE Corporate Website.

QUESTIONS?? .

Q1(a). •Movement of candidates across all its business •Focus on “Talent Differentiation” •Major Tools Used at GE for Differentiating Talent •Vitality Curves •9 Blocks •Accomplishment Analysis . Critically examine the importance of leadership development and succession planning at GE and explain how it is undertaken at the company? Ans :•Adopted Succession Planning from Mid-1900.

Q1(b). Why do you think that involvement of the top leadership in the succession planning process is important? Ans :Advantages of involving the top management in the succession Planning: •Better Assessment Ability •Employees will be trained under experts •Personal attention to key candidates •Build a health relationship between top management and employees .

Q1(b). Why do you think that involvement of the top leadership in the succession planning process is important? Ans :Advantages of involving the top management in the succession Planning: •Better Assessment Ability •Employees will be trained under experts •Personal attention to key candidates •Build a health relationship between top management and employees .

Welch created a list of essential qualities. The original list narrowed down to 8 serious candidates. . skills and characteristics an “Ideal CEO” should posses. Developed “Eight Basic Objective for Selecting CEO Successor”. Submitted a list of 23 candidates to GE Board Organized informal events to look at potential CEO candidates By 1998.Q:2(a) Study and comment on the CEO succession planning process Welch followed. A:2(a) In 1994.

A:3(a) Immelt’s Performance at GE Due to 9/11.Q:3(a) Comment on the performance of GE under Immelt’s leadership. Invested $100 million in R&D to form “Global Research Center” . GE failed to report double digit earning growth in the fiscal 2002 Measures opted by Immelt: Cut costs through layoffs Restructured GE business Introduced a Customer Service program – ACFC He focused on “Customer Centric” strategy.