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Jeff Immelt's fifth year in office as the Chairman and CEO of GE also saw GE being crowned as the world's most admired company by Fortune Magazine for the sixth time and second time in Immelt's tenure this was in addition to GE being on top of the list of Financial Times' most admired companies of the world for seven out of the last eight years. The company has been able to beat the US slowdown of 2001, 9/11 and rising input prices and still maintained a growth rate of 5% which none of its Industrial or Financial peers has been able to match and with the restructuring and Jeff Immelt's new growth initiatives GE has been able to deliver a growth of 8% from existing business and another 3% through acquisitions in 2005 and is all set to repeat that performance every year for the next decade.
For the past century GE has continually set the agenda of management ideas and practices that other companies will follow. It pioneered the principles of organization design in 1892 and in 1950s it produced the famous "Blue Books" - Ultra detailed guide given to GE managers on how to conduct business. In 1960s it led the move to strategic planning. In 1980s and 1990s it tool concepts like Leadership Development, Work Out and Six Sigma.
Testimonials for GE from industry and academic leaders:
"GE is the best school of management on earth bar none"
Clay Christensen Professor, Harvard Business School and author of "The Innovator's Dilemma"
"GE has set a standard in leadership development in a way that all of us have benefited from."
Kevin Sharer, CEO of Amgen
"What makes GE the gold standard is the consistency of performance over a very prolonged period."
Kevin Rollins, CEO of Dell
Company Fast Facts
Market Cap - $354 billion
- Employees - 300,000
- Shareowners - 5 million
- Average Annual Return since 1996 - 13.5%
Company Fact Sheet
General Electric Company (General Electric) is a diversified industrial corporation. The company manufactures a wide range of products from major appliances and lighting products to commercial and military aircraft jet engines; medical diagnostic imaging systems; bioscience assays and separation technology products to electrical distribution and control equipment. The company has operations in North America, Europe, Asia and South America
General Electric operates through six business divisions: infrastructure, industrial, commercial finance, healthcare, consumer finance and NBC Universal.
Infrastructure produces, sells, finances and services equipment for the air transportation and energy generation industries. The infrastructure also produces, sells and services equipment for the rail transportation and water treatment industries. The infrastructure division operates primarily through its sub-divisions. The aviation sub-segment produces, sells and services jet engines, turboprop and turbo shaft engines, and related replacement parts for use in military and commercial aircraft. This sub-segment is also engaged in providing maintenance, repair and overhaul services (MRO) services for aircraft components including engines. The aviation financial services sub-segment offers a broad range of financial products to airlines, aircraft operators, lenders, investors and airport developers. These financial products include leases, aircraft purchasing and trading, engine/spare parts financing, pilot training, fleet planning and financial advisory services. The energy sub-division provides products and services to the global energy industry. These products and services assist the energy industry in production, distribution and management of energy. The company's product portfolio includes wind turbines, aircraft engine derivatives, gas turbines and generators. The oil and gas sub-segment offers products and services for the production, transportation, storage, refining, and distribution of oil and natural gas. The transportation sub-division provides technology solutions for customers in a variety of industries, including railroad, transit, mining, oil and gas, power generation, and marine. The products offered by the transportation sub-division include high horsepower diesel-electric locomotives as well as parts and services for locomotives. The water sub-division offers solutions for purifying water. These solutions include supply of specialty chemicals, pumps, valves and filters; fluid handling equipment; wastewater and process systems
The industrial division sells products including consumer appliances, industrial equipment and plastics, and related services. This division's operations are located in North America, Europe, Asia and South America. The company primarily operates through its sub-divisions. The consumer and industrial sub-division sells home appliances including refrigerators, freezers, electric and gas ranges, cooktops, dishwashers, clothes washers and dryers, microwave ovens, room air conditioners, and residential water systems for filtration, softening and heating. This division brands include Monogram, GE Profile, GE and Hotpoint. The equipment services sub-division provides rentals, leases, sales and asset management services for commercial and transportation equipment. The plastics sub-division manufactures and sells plastics used by compounders, molders and original equipment manufacturers. These plastics are used in a variety of applications including fabrication of automotive parts, computer enclosures, compact disks and optical-quali
The commercial finance division offers a broad range of financial services. This division's operations are spread across North America, South America, Europe, Australia and Asia. This division has mid-market expertise and offers loans, leases and other financial services to manufacturers, distributors and end-users of a variety of equipment and major capital assets. These assets include industrial-related facilities and equipment, commercial and residential real estate, vehicles, corporate aircraft, and equipment used in many industries such as the construction, manufacturing, telecommunications and healthcare industries.
The healthcare division manufactures sells and services a range of medical equipment. The services offered by the division include remote diagnostic and repair for medical equipment, computerized data management and customer productivity services. The healthcare division primarily operates in North America, Europe, Asia, Australia and South America.
The consumer finance division offers credit and deposit products and services to consumers, retailers, brokers and auto dealers in over 50 countries. The financial products offered by the division include private-label credit cards; bank cards; dual cards; corporate travel and purchasing cards; personal loans; auto loans; leases and inventory financing; residential mortgages; home equity loans; debt consolidation loans; current and savings accounts and insurance products related to consumer finance offerings for customers on a global basis.
NBC Universal, another division, is a media company. It is principally engaged in the broadcast of network television services to affiliated television stations within the US; the production of live and recorded television programs; the production and distribution of motion pictures; the operation, under licenses from the Federal Communications Commission (FCC), of television broadcasting stations; the ownership of several cable/satellite networks around the world; the operation of theme parks; and investment and programming activities in multimedia and the internet. The NBC Television Network is one of four major US commercial broadcast television networks and serves 230 affiliated stations within the US.
CHANGING OPERATING ENVIRONMENT AND GE
"We're now in a slow-growth world. Things were different 25 years ago. Oil was under $30 a barrel; most growth came from the developed world; we were a country at peace. After I came in as CEO, I looked at the world post-9/11 and realized that over the next ten or 20 years, there just was not going to be much tailwind. It would be a more global market, it would be more driven by innovation, and a premium would be placed on companies that could generate their own growth. We have to change the company-to become more innovation driven-in order to deal with this new environment. It's the right thing for investors. Productivity is still very important, but if you look back at GE's businesses over the past decade or so, those that have been managed for both productivity and growth have done the best. "
The statement from Jeff Immelt mentioned above captures the very essence of the changing business environment that GE has to deal with now and thus had to restructure itself into an organization which is ready for tomorrow
Analyzing GE's Changing Environment Under Jeff Immelt
- Industry Sector: With the bust of 2001 and the US slowdown that followed GE was faced with a very slow growth industry sectors as its major businesses like Commercial Aviation and Power equipment were the ones that had taken the maximum hit from the slowdown. However, GE's relentless efforts on increasing productivity became its savior. Also Immelt's efforts to boost globalization and invest in R&D helped GE to explore new opportunities in the emerging markets and be ready to ride any upsurge in demand
- Raw Materials Sector: Post 9/11 and Iraq war the crude oil prices sky-rocketed and the ever increasing demand from India and China lead to a huge rise in commodity prices. All this meant an ever increasing pressure on the company's profitability due to input prices
- Human Resources Sector: With a new and restructured company with more than 50% revenues coming from outside the United States a new challenge were getting a leadership team from these markets. Thus GE has increased the number of management graduates it plans to hire from Asia every year
- Financial Resources Sector: Post 9/11 the world saw a reversal of trend as the fall of interest rates stopped and they started rising instead. However, thanks to huge cash flows from operations generated by GE and its AAA rating financial resources never posed a threat to the company
- Market Sector: Again as more than half the revenues and almost the entire growth came from developing economies GE was faced with a totally different market sector as GE had to recognize the importance of these new markets. In earlier years GE had followed a strategy of "Defeaturization" which meant taking an American product and stripping it down to suit an Indian price. However, this mindset is changing to developing a product ground up in India to suit an Indian price
- Technology Sector: Technology is one sector which has more or less stayed constant over the last few years as it has only increased gradually and GE has if anything stayed ahead of its time with a continuing stress on leveraging its technology and process excellence for delivering customer value
- Economic Conditions Sector: Last five years have witnessed both a slowdown and boom in the world economy with a very slow growth phase in the industrial world post 9/11 and then a boom lead by China and India
- Government Sector: The government sector inside the United States has stayed stable. However, the increasing pressure from the world on the US to sign the Kyoto Protocol has meant GE had to shift its focus on ecological balance by starting a drive called "Ecomagination"
- Sociocultural Sector: Last five years have scene a stabilized sociocultural environment with only major change coming in form of changing demographics as the population in most of the developing world is ageing and hence are the consumer requirements
- International Sector: As most of the revenues or the company is coming from international markets so is most of the competition. GE is now faced with competition from its European and Asian rivals even as it has outsmarted most of its American competition
STRATEGIES THAT SHAPED GE OVER THE YEARS
A Glimpse at the History of the World's greatest company - A conglomerate formed through acquisitions and innovations
General Electric Company (General Electric) was established in 1892 with the merger of Thomson-Houston Electric and Edison General Electric. Its early products included light bulbs, motors, toasters, elevators, and other appliances.
In the following years, General Electric acquired a number of companies such as Siemens & Halske's branch in Chicago in 1900 and Stanlet Electric Company in 1903.
The company continued to expand and by 1980, its products ranged from plastics, consumer electronics, nuclear reactors, to jet engines. In the following year, the operations of the company were decentralized. It bought mutual fund wholesaler GNA in 1993. In the same year, GE Investment management began selling mutual funds to the public. GE Capital Services, its subsidiary, expanded its lines, buying Amex Life Insurance and Life Insurance Company of Virginia in 1995.
The company continued to expand through the acquisition of other companies and through the establishment of joint ventures. The company sold Genie online services in 1996 and entered into a joint venture with Microsoft forming the MSNBC cable news channel in 1997. During 1999, the company acquired 134 companies.
In 2001, GE and Honeywell International terminated their earlier merger agreement after EU regulators blocked the deal. As part of the agreement, General Electric acquired two businesses from Honeywell; Tensor, an oil and gas group, and Honeywell Advanced Composites.
General Electric made a number of acquisitions in 2002, including Instrumentarium, USA Instruments, Infographic Systems, Deutsch Financial Services and Ion Track. It also combined its lighting and appliances businesses to Form GE Consumer Products in 2002.
General Electric announced a merger deal between NBC and Vivendi Universal entertainment in 2003. The company gained ownership of 80% of the new company, NBC Universal. Later during the same year, General Electric acquired Sophia, a French real estate company. Also in the same year, the media group controlled by GE severed its financial ties with Paxson.
General Electric made many acquisitions in 2003, including RAMiX, SI Pressure Instruments and Saferex Oy of Finland. GE Medical Systems completed the acquisition of Triple G Systems Group in late 2003. Also during the year, Littlejohn & Company agreed to acquire GE Superabrasives.
General Electric agreed to acquire InVision Technologies in 2004. During the same time, the company completed its acquisition of substantially all of the US business assets of AstroPower, a leading manufacturer of solar electric power products. GE Commercial Finance, the business-to-business financial services unit of General Electric, purchased assets from Boeing Capital Corporation in 2004. While GE Consumer Finance, the global consumer lending unit of General Electric acquired DeltaBank, a Moscow-based Russian consumer bank. GE Energy acquired three business units of S D Myers. In Canada, GE acquired Ikon Office Solutions, a leasing business. General Electric also acquired the assets of ChevronTexaco's gasification technology business. In South Africa, the company acquired substantially all the assets of Fluidex Engineering of Johannesburg. General Electric sold its majority stake in its GE Capital International Services unit in 2004.
General Electric restructured its operations into six businesses during 2005; each business focused on the broad markets served by the company. These businesses were infrastructure, commercial finance, consumer finance, healthcare, NBC Universal and industrial.
General Electric made several acquisitions during 2005. In Turkey, the company acquired a 25.5% voting stake in Garanti Bank, a full service Turkish bank. GE's commercial finance division acquired the Transportation Financial Services Group of CitiCapital; the Inventory Finance division of Bombardier Capital; Antares Capital, a nit of Massachusetts Mutual Life Insurance; and ING's portion of Heller. General Electric's infrastructure division acquired Ionics.
GE's Growth Strategy under Jeff Immelt
What Immelt inherited from the legendary Jack Welch was a highly productive company which has grown through a spate of acquisitions ever since its inception. Immelt recognized that the environment GE operated in has changed dramatically over the years and the world has entered a slow growth phase and only those companies which can grow on their own will be valued at a premium.
Immelt brought about revolutionary changes at GE as the older principles of growth were done away with and business successes were now measured by return on capital instead of pure market leadership. A significant change was the extent to which the organization became externally oriented as Immelt reinstated the post of a Chief Marketing Officer after nearly three decades indicating a new market oriented GE. Next major step taken by Immelt was increasing investments in R&D again consistent with the company creating its own growth rater then growing by acquisitions.
In essence Immelt kept the values of productivity and globalization but added a growth imperative to it as in Immelt's words "another decade of 4% growth would mean that GE would cease to be a great company anymore". What Immelt has done with reshaping the strategy is in essence a tradition of GE leaders as Immelt himself sums it up by saying "Most people inside GE learn from the past but have a healthy disrespect for history".
The effect of GE's change in strategy to growth mode has been discussed in detail in the section on change efforts of Immelt later
Effect of Strategy Change on people of GE
Change from Welch's 6 C's to Immelt's Growth Traits
Immelt has identified the following as the growth traits for GE leaders as against the 6C's identified by Welch
- External Focus
- Clear Thinking
What this means that the focus of the company is now on market focus and building new products and solving problems through expert domain knowledge. This also implies that Jack Welch's philosophy of moving people from one business to another in 18 months will give way to a situation where people would stay in a GE business for around five years on an average to develop expertise required to deliver high organic growth.
TECHNICAL SUB-SYSTEM AT GE - TECHNICAL LEADERSHIP AND LINKING PROCESS EXCELLENCE TO CUSTOMER VALUE
Products, services and content represent GE's value added and are the key to its growth. It invests about $14 billion each year in this intellectual foundation for the Company, which includes R&D, content development and marketing. The scale of this Investment - the depth and the breadth - makes GE unique.
GE leverages breadth to lead in service technology. We leverage breadth to lead in service technology. An example of this is new service technology is non-destructive testing. This takes imaging technology from its healthcare business and applies it to energy, rail, aviation and oil & gas. For customers, testing infrastructure for failure could save billions of dollars each year. It uses its technological strength to win. The bounty of great technology is not just the products it sells today, but also the large installed base of long-lived assets where they sell service. Its service business is profitable and grows quickly. More importantly, services are aligned to solve customer problems in areas such as fuel efficiency, environmental performance and quality. It has a talented group of engineers and technologists. The company's renewed focus on innovative products gives them a platform for leadership in the company.
Linking Process Excellence to Customer Value
In 2005, GE accelerated its progress to link internal processes to the success of customers. It starts by creating formal ways to listen to customer input in "dreaming sessions" which involves taking unique customer groupings and having them help shape strategy. Next, the company improved its customer facing processes using Lean Six Sigma, a process for reducing cycle time. Every GE employee wakes up in the morning wanting to help a customer. Lean helps to look at processes from a customer point of view and engages the team to create solutions. In several businesses it is linking Lean directly to growth, through what is called "Lean Showcases." The purpose of these showcases is not just to improve cycle time for the benefit of customers. Rather, it is to be so good that it generates incremental growth ... $50 million in each "showcase." Lastly, GE is using a simple metric called Net Promoter Score (NPS) to measure how customers view GE. NPS creates a view of customer loyalty. The absolute score is less important than the trend. It learns from both promoters and detractors. Most importantly, we have been able to associate NPS improvement with growth. NPS is simple and we can be used across the Company. The ultimate goal is to use improvements in NPS as a measure in how leaders get compensated.
ORGANIZATION STRUCTURE AT GENERAL ELECTRIC AND ITS EVOLUTION
As is evident from the structure described above GE follows a very flat organization structure composed which is a mix of divisional, functional and regional structures. It is phenomenal for an organization of the size of GE which has over 300,000 employees across the globe to be so organic and flat in its organization structure. As seen above GE's structure can be mainly described as a divisional structure further each division follows a similar two tier structure and thus any idea can reach as far as the CEO by just passing through 2 levels above.
The extent of GE's flatness and wide span of control can be viewed from the fact that the CEO spends as much as one-third of his time on people and takes care of selecting and reviewing top 600 of the company's leaders himself. These top 600 leaders then take similar responsibilities for their staff
However, GE's structure was not always as flat. It all started in 1892 when Charles Coffins, then CEO and Chairman of the company created an organizational structure which laid the fundamentals of Organization Design and lead to the beginning of a new subject in Management which was later followed by all management institutions and companies. This structure kept on becoming more and more tall and rigid as the company grew at an enormous pace and it finally resulted in a structure where there were six layers of Sector Executives between the business leaders of each of the GE's businesses and the CEO. This resulted in a bureaucratic culture and an organization where seniority and tenure were valued more than merit and most of the new ideas got lost somewhere in the bureaucracy or by the time they reached the relevant decision makers there time had been past.
In 1981 Jack Welch took over as the Chairman and CEO of the company and He abolished all the layers of sector executives that separated the business leaders from the CEO and created a flat organization which was very receptive of fresh ideas and was a true meritocracy and the current structure was born. This structure was supported by a very rigorous and frequent evaluation system and People Management became one of the primary activities of the CEO himself.
CULTURAL SUB-SYSTEMS AND GROWTH INITIATIVES AT GE
The Cultural and Operating System is GE learning culture in action.
It is a year-round series of intense learning sessions where Business CEOs, role models and initiative champions from GE as well as outside companies, meet and share intellectual capital. The central focus is always on sharing and putting into action, the best ideas and practices from across the company and around the world.
How Does It Work?
Meetings take place year-round, in an endless process of enrichment. Learning builds from previous meetings, expanding the scope and increasing the momentum of our company-wide initiatives.
Driven by the company's values - trust, informality, simplicity, boundaryless behavior and the love of change - the Operating System allows GE businesses to reach speeds and performance levels unachievable were they on their own.
What Are The Results?
The Operating System translates ideas into action across three dozen businesses so rapidly that all the initiatives have become operational across the company within one month of launch, and have always produced positive financial results within their first cycle.
Globalization has been enriched through more than a dozen cycles, Six Sigma is in its fifth cycle, Services is in its sixth, and e-Business its third.
Five Key Areas to Drive GE Business Growth
GE is committed to achieving worldwide leadership in each of its businesses. To achieve that leadership, GE's ongoing business strategy centers on five key growth initiatives:
- Technical Leadership
- Customer Focus
- Growth Platforms
GE is committed to leadership in the "next generation" of technology. It's well-positioned to drive growth for the future with technical excellence in each business by developing a global technical capability, increasing new product growth, and investing in global research.
Services have grown from the traditional activities of parts replacement, overhauling and reconditioning machines to a larger and broader vision. The new vision includes investing in business and technology to improve the performance on its installed base and the way it actually services it. Through higher technology, it has the ability to go beyond servicing to reengineering the installed base. By doing so, it dramatically improved its customers' competitive positions. GE is in the midst of an incredible transformation brought on by the Internet explosion. Its pursuit of digitization will rapidly change its dealings with vendors, partners, and most of all, its customers.
Customer Focus is ensuring that everything it does provides value to our customers. It means creating a partnership that - combined with expertise in financial, service and technology industries - maximizes customer profitability and ensures quality.
A key GE strength is the ability to conceptualize the future, identify "unstoppable" trends and develop new ways to grow. Growth is the initiative, the core competency in building at GE.
Globalization is not only striving to grow revenues by selling goods and services in global markets. It also means globalizing every activity of the company, including the sourcing of raw materials, components, and products. Globalization especially means finding and attracting the unlimited pool of intellectual capital - the very best people - from all around the globe.
JEFF IMMELT'S STRATEGIC GROWTH IMPERATIVES - DRIVING AND MANAGING CHANGE AT GE
When Jeff Immelt became CE's chairman and CEO in 2001, the organization already had a robust tool kit in place to tackle business problems. Most of its key initiatives have focused on enhancing productivity.
The Productivity Tool Kit
- Best Practices Sharing: identifies particularly effective approaches and spreads them across CE's businesses
- Change Acceleration Process: equips leaders with a proven method of managing change and prepares them to succeed as change agents
- Crotonville Customer Programs: deploy the resources of GE's renowned internal training facility for the benefit of customers
- Multigenerational Product Development Plan: ensures that new products are not simply optimized for the near term but have the ability to evolve with customer needs
- Process Mapping: creates visual representations of business processes to facilitate understanding and simplification
- Quick Market Intelligence: builds on Wal-M art's innovation of tapping into real-time data about customer and competitor behavior and disseminating that insight rapidly throughout the organization
- Simplification: drives out extraneous costs incurred by overcomplicated processes and proliferation of options in sourcing and other areas
- Six Sigma: employs Motorola- pioneered methods to bring defect levels below 3.4 defects per million opportunities. Intensive quality training yields "green belts' "black belts:' and "master black belts"
- Work-Out: uses cross-functional teams and town hall meetings to find ways to take unproductive work out of the system, like meetings, reports, and approval levels that add no value
However, General Electric under the leadership of Jeff Immelt is bending every waking effort to an audacious aim-to grow organically two to three times faster than world GDP which translates into a growth rate of 8% + from its existing businesses itself. Immelt attributes this change in philosophy to the fact that the world has changed dramatically post 9/11 pushing up the input prices and the economic growth engines have also shifted towards emerging economies like China and India. Pursuing that goal, the company has invented a whole new set of management methods and hence is changing focus from productivity to productivity with growth.
GE's foundation is a set of leadership businesses constructed to achieve long-term targets of more than 10% annual earnings growth and 20% return on total capital (ROTC). In 2005, the Company was restructured into six businesses focused on the broad markets served: Infrastructure, Commercial Finance, Consumer Finance, Healthcare, NBC Universal and Industrial. Each business has scale, market leadership and superior customer offerings. Over the past few years, the company has aggressively strengthened its portfolio. It had two goals in mind: improve its industrial growth rate and expand financial services returns. Since 2002, it has completed $65 billion of acquisitions, and announced or completed approximately $30 billion of divestitures. Its organic growth has expanded to 8% versus an historical level of 5%. At the same time, its ROE in its financial services businesses has increased to 26% its businesses fit well with the big demographic themes of its era. As a result, it is positioned to grow organically at two to three times the global gross domestic product (GDP).
GE uses its size to perform for investors. Since 1990, GE's continuing earnings have grown every year but one, and most of these years have had double-digit earnings growth. Its dividend has increased for 30 straight years, growing 12% on average.
The following businesses have been identified as key future growth drivers in a recent GE outlook meeting:
- Healthcare IT... Market leadership
- Oil & Gas ... Market Leadership... Expanding Rapidly
- Water... Continue to expand globally
- Security & Sensing ... Continue to expand ... industry consolidating
- Hispanic Media ... grow share in US & explore global opportunity
Common Initiatives: Organic Growth
The second imperative is to drive common initiatives across the portfolio to expand performance. The GE team embraces these initiatives. They measure, learn and drive initiatives until they become part of the culture. Its most important initiative is to drive 8% organic revenue growth. This was launched in 2004, when it had an historical growth rate of 5%. The total continuing revenue growth was 11% in 2005, and organic growth was 8%. This was about twice its industrial and financial peers. Jeff Immelt has come up with a framework known as "Execute for Growth" which will guide the business leaders in all GE businesses to achieve this audacious target of organically growing the company at 8%. The framework is outlined in the following section
The Growth Tool Kit
A new set of tools has been added to the old kit to help CE achieve its goals for top-line growth.
- Acquisition Integration Framework: outlines a detailed process for ensuring that acquired entities are effectively assimilated into GE
- At the Customer, for the Customer: brings CE's internal best practices, management tools, and training programs to customers facing their own managerial challenges
- CECOR Marketing Framework: connects innovation and other growth efforts with market opportunities and customer needs by asking questions to calibrate, explore, create, organize, and realize strategic growth
- Customer Dreaming Sessions: assemble a group of the most influential and creative people in an industry to envision its future and provoke the kind of interchange that can inspire new plans
- Growth Traits and Assessments: outline and enforce the expectation that GE's next generation of leaders will display five strengths: external focus, clear thinking, imagination, inclusiveness, and domain expertise
- Imagination Breakthroughs: focus top management's attention and resources on promising ideas from anywhere in the organization
- Innovation Fundamentals: Equip managers with four exercises to engage people in innovation, and prepare them to transform new ideas into action
- Innovation Labs and Tool Kit: support business strategy, product development, and other cross-functional project teams with a variety of resources and materials relevant to innovation efforts
- Lean Showcases: demonstrate the power of "lean" thinking by allowing people to see how cycle times were reduced in a core customer- facing business process
- Lean Six Sigma: puts the Six Sigma methods and tools in the service of a critical goal-reducing cycle times in the processes that chiefly drive customer satisfaction
- Net-Promoter Score: holds all GE businesses to a new standard: They must track and improve the percentage of customers who would recommend GE. The scores are seen as leading indicators of growth and performance; business teams apply lean Six Sigma and other tools to analyze scores and identify and implement improvements
People + Culture
GE has always been seen as an organization which is a university in itself and this commitment is reflected in the fact that CEO Jeff Immelt spends a s much as one-third of his time on people and the company spends in excess of $1 billion each year on various training programs. GE is committed to teach its leaders new skills that make them contemporary in every era. Consistent with our initiatives, it is teaching them to be growth leaders. To achieve consistent growth, every leader in every function must make it their mission. This will require personal intervention with customers and protection of the funding of Imagination Breakthroughs. It will require risk-taking based on deep market instincts.
Jeff Immelt along with other senior leaders studied the attributes of companies that had long-term success with organic growth like Dell and Toyota. They found that they had five traits in common:
- They had external focus that defined success in market terms.
- They were clear thinkers who simplified strategy into specific actions, made decisions and communicated priorities.
- They had imagination and courage to take risks on both people and ideas.
- They were energized by inclusiveness and a connection with people, which builds loyalty and commitment.
- They developed expertise in a function or domain, using depth as a source of confidence to drive change.