Common Electrical
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CASE 22
Jeff Immelt and the Reinventing of Common Electric1
On April 25, 2012 Jeff Immelt, chairman and CEO of the Common Electrical Firm, presided over
the corporate’s annual shareholders’ assembly in Detroit, Michigan. As representatives of the “99
P.c Motion” protesting GE’s low fee of company tax had been ushered from the corridor, and GE’s
board members and company officers took their seats, Immelt mirrored on his eleven years as head of
GE.
Immelt knew that taking up from Jack Welch—”dwelling legend” and “finest supervisor of the 20th
century”—could be a troublesome problem. Little did he know simply how powerful his job could be.
4 days after Immelt took over the chairman’s suite, two hijacked airliners crashed into New York’s
World Commerce Middle, setting off a prepare of occasions that will profoundly have an effect on GE’s enterprise
setting. A month later, Enron’s collapse precipitated a disaster of confidence over company
governance, monetary reporting, and enterprise ethics. The mounting controversy over monetary
assertion manipulation and govt compensation quickly engulfed GE—which was pressured to restate
earnings and reveal the main points of Welch’s staggeringly beneficiant retirement package deal. Then got here the
monetary disaster of 2008-9—a significant blow to GE since its monetary providers arm, GE Capital, was one
of America’s largest monetary providers companies and for 20 years had been GE’s major development
engine. It was now seen as “ticking time bomb” of dangerous money owed requiring asset writedowns. In 2008, GE
downgraded its earnings forecasts, reduce its dividend, suspended its share buyback program, and sought
a $Three billion fairness injection from Warren Buffett. Within the following March, S&P reduce GE’s credit standing
from AAA to AA+.
But, all through this eleven 12 months interval of turbulence, Immelt had systematically put in place a longterm
transformation technique for GE. This technique had concerned reconfiguring GE’s enterprise portfolio
round two core companies, infrastructure and specialty monetary providers, reorienting GE’s
efficiency objectives in the direction of income development, refocusing GE’s aggressive benefit round
technological innovation and customer support, and adjusting GE’s construction, administration processes,
and company tradition.
By the point of 2012 shareholders’ assembly, the outcomes of the technique had been turning into obvious:
GE as we speak is the world’s largest infrastructure firm, and we’ve got an ideal midmarket
lending firm in GE Capital. Actually, two primary core companies, and our purpose is de facto to
develop our infrastructure footprint. We’re greater than $100 billion globally as we speak and
proceed to construct a invaluable specialty finance enterprise.
The issues we work on are superior know-how, management in development areas, providers and
buyer relationships, margin enlargement and good capital allocation. At our core we’re a
know-how firm. Keith mentioned we make investments about 6% of our income again into R&D. It is
about $6 billion. We’ll launch greater than 880 new merchandise subsequent 12 months…
1 This case was ready by Robert M. Grant. ©2012 Robert M. Grant.
Providers are vital for the Firm. It is about 70% of our industrial earnings, about $45
billion in income. Right here we’re simply actually attempting to assist our prospects earn more money.
We proceed to spend money on know-how that upgrades our prospects’ efficiency.
GE is a really world firm. As Keith mentioned, about 60% of our income is outdoors the United
States. Industrial development areas, these are actually the rising markets like Asia, the Center
East, locations like that. We’ve got quite a lot of management there. Our companies are rising there
considerably. In useful resource wealthy areas we’re rising in extra of 20%. And rising Asia, like
China and India, are rising 10% to 15%.
Lastly, we fly underneath the banner of GE Works. We’re actually targeted on being mission primarily based,
shifting, curing and powering the world, believing in steady enchancment. Actually a
relentless drive to unravel buyer issues, to create a world that works higher. However very
a lot primarily based on our phrases and our individuals and we predict that is what makes GE nice.i
The altering form of GE’s general enterprise make-up is proven in Determine 1. Nevertheless, for all of
Immelt’s success in remodeling GE’s enterprise mannequin and guiding GE via the challenges of the
21st century, monetary efficiency had lagged. Throughout 2002-2003 Immelt, had established formidable
efficiency targets for GE: gross sales development at 2-Three instances that of world GDP, 10%-plus earnings development
and 20%-plus return on complete capital.ii GE’s efficiency had fallen nicely wanting these targets (see
Desk 1). GE’s share value advised the story: when Immelt’s appointment had been introduced late in
2000, GE’s inventory was buying and selling at $53. For many of 2001-08, GE’s shares fluctuated between $20 and
$40, however within the midst of the monetary disaster GE’s inventory fell under $6 (March 5, 2009); by April 26,
2012 it had climbed to $19.81.
Determine 1 Common Electrical Strategic Overview: A Stronger Portfolio
Supply: Tailored from Common Electrical Shareowners Assembly, April 25, 2012
Desk 1. Common Electrical: efficiency indicators, 2001 and 2011
Gross sales
($bn.)
Web
earnings
($bn.)
Return
on
fairness
(%)
Return
on
invested
capital
(%)
Market
capitalization,
31st Dec. ($bn)
Staff
(,000s)
% of Non-
US
workers
2001 125.9 13.7 26.zero 27.zero 397.9 310 49.zero%
2011 147.Three 14.2 11.9 11.6 187.eight 301 56.5%
Immelt had been extensively applauded for deft management of GE in guiding it—roughly unscathed—
via the monetary disaster and taking steps rebalance GE away from monetary providers in the direction of
technology-based, industrial companies. Furthermore, Immelt has sustained GE’s emphasis on longterm
growth constructed upon funding in know-how, creating new companies, worldwide
enlargement, and upgrading of GE’s manufacturing base. But with out a sustained enchancment in GE’s
monetary efficiency, the doubts about GE remained.
For all Immelt’s reframing of GE as an “infrastructure firm with two core companies,” GE
remained a extensively diversified enterprise. Though Immelt forcefully argued that GE was not a
conglomerate, most funding analysts regarded it as such and, because of this, was all the time open to the
risk that it may create shareholder worth by being damaged up (as had occurred to most different
conglomerates together with ITT, Tyco Worldwide, Common Mills, Fortune Manufacturers, and Vivendi-
Common). The case towards highly-diversified corporations was strengthened by the rising recognition
of the necessity for in-depth area experience for senior managers. Andrew Hill of Monetary Instances raised
the query: “If the demand is now for depth over breadth, with there be sufficient ‘serial masters’
able to understanding, not to mention working corporations of the size and scope of Common Electrical
And if not, at what level will the market decide that such corporations are just too massive to handle”iii
Desk 2 summarizes GE’s monetary efficiency throughout 2002–eight.
Desk 2 Common Electrical: chosen monetary information, 2006–11
($ billions) 2011 2010 2009 2008 2007 2006
Common Electrical Consolidated
Revenues 147.Three 150.2 156.eight 182.5 172.5 151.6
Web earnings 14.2 11.6 11.zero 17.four 22.2 20.7
Money from working actions 33.four 36.1 24.6 48.6 43.Three 31.5
Money used for investing
actions
19.9 32.four 43.zero (35.four) (69.5) (52.6)
Return on common fairness 11.9% 12.1% 11.6% 15.9% 20.four% 19.eight%
Inventory value vary ($) 21.65-
14.02
19.70-
13.75
17.52-
5.87
38.52–
12.58
42.15–
33.90
38.49–
32.06
Yr-end closing inventory value ($) 17.91 18.29 15.13 16.20 37.07 37.21
Complete belongings 717.2 747.eight 781.eight 797.eight 795.7 697.Three
Lengthy-term borrowings 243.5 293.Three 336.2 330.1 319.zero 260.7
Complete workers 301,000 287,000 304,000 323,000 327,000 319,000
US 131,000 133,000 134,000 152,000 155,000 155,000
Different international locations 170,000 154,000 170,000 171,000 172,000 164,000
GE information (industrial companies)
Quick-term borrowings 2.2 zero.5 zero.5 2.four four.1 2.1
Lengthy-term borrowings 9.four 9.6 11.7 9.eight 11.7 9.zero
Shareowners’ fairness 116.four 118.9 117.Three 104.7 115.6 111.5
Complete capital invested 129.zero 133.1 135.Three 123.5 137.eight 128,2
Return on common capital
invested
11.6% 11.eight% 10.6% 14.eight% 18.9% 18.5%
Borrowings as % of capital
invested
9.zero% 7.6% 9.zero% 9.9% 11.four% eight.7%
Working capital (zero.zero) (1.6) (1.6) Three.9 6.four 7.5
GECS information (monetary providers)a
Revenues 49.1 49.91 51.eight 71.Three 71.9 61.four
Web earnings 6.5 2.2 1.four 7.1 10.Three 10.7
Shareowner’s fairness 77.1 69.zero 70.eight 53.Three 57.7 54.1
Complete borrowings 443.1 470.5 493.Three 514.6 500.9 426.Three
Ratio of debt to fairness at GECS 5.75:1 6.82:1 6.96:1 eight.76:1 eight.10:1 7.52:1
Complete belongings 584.5 605.Three 650.four 660.9 646.5 565.Three
Word: a GECS is Common Electrical Capital Providers which owns GE Capital
Supply: Common Electrical, 10-Okay studies
Historical past of the Common Electrical Firm
The GE that Jeffrey Immelt inherited in 2001 was the world’s most dear firm (by way of
market capitalization and was extensively considered the world’s most profitable. It was the one
firm to have remained a member of the Dow Jones industrial index because the index was created in
1896. The important thing to its success had been to mix huge dimension with fixed adaptation. Over the
many years GE had tailored each its enterprise portfolio and its administration programs to the calls for and
alternatives of a altering world.
GE was based in 1892 from the merger of Thomas Edison’s Electrical Gentle Firm with the
Thomas Houston Firm. Its enterprise was primarily based upon exploiting Edison’s patents regarding
electrical energy era and distribution, mild bulbs, and electrical motors. All through the 20 th
century GE was not solely one of many world’s largest industrial firms, it was additionally “a mannequin of
administration—a laboratory studied by enterprise faculties and raided by different corporations searching for expert
executives.”iv Below the management of Charles Coffin, between 1892 and 1922, GE efficiently
married Edison’s industrial R&D laboratory to a enterprise system able to turning scientific
discovery into marketable merchandise. After the Second World Warfare, Chairman Ralph Cordiner, assisted
by Peter Drucker, pioneered new approaches to the systematization of company administration. Below
Fred Borch (CEO 1963–72), GE’s company administration system primarily based on strategic enterprise items
and portfolio evaluation grew to become a mannequin for many diversified firms. Reg Jones, GE’s chairman
from 1973 to 1981, linking GE’s methods of strategic planning to its programs of economic
administration.
Throughout his 20 years at GE’s helm, Jack Welch had led probably the most complete strategic and
organizational upheavals in GE’s lengthy historical past. Welch reformulated GE’s enterprise portfolio via
exiting low development extractive and manufacturing companies and increasing providers—monetary
providers specifically. By the point he retired, GE Capital represented virtually half of GE’s revenues and
the vast majority of its belongings. On the coronary heart of Welch’s remaking of GE was the creation of a efficiency
tradition supported by complete programs for setting and monitoring efficiency targets and
offering highly effective incentives for his or her achievement:
Altering the tradition—opening it as much as the quantum change—means continually asking not
how briskly am I going, how nicely am I doing versus how nicely I did a 12 months or two earlier than, however
reasonably, how briskly and the way nicely am I doing versus the world outdoors. Are we shifting sooner,
are we doing higher towards that exterior customary
Stretch means utilizing goals to set enterprise targets—with no actual thought of find out how to get there…
We actually did not have a clue how we had been going to get to 10 stock turns [a year]
once we set that concentrate on. However we’re getting there, and as quickly as we turn into positive we are able to do
it—it is time for an additional stretch.5
Welch declared conflict on GE’s elaborate paperwork and stripped out layers of hierarchy. His
administration type was direct, private and sometimes confrontational: managers had been inspired to
decide to formidable efficiency targets, after which they and their subordinates had been underneath intense
stress to ship. Each side of GE’s administration programs was redesigned from the bottom up,
from strategic planning to human useful resource administration. Welch additionally launched periodic challenges
for the entire group. These included: “Be #1 or #2 in your world trade”; “Work-out, ” a
course of for firm conferences that allowed grassroots concepts about organizational change to be
applied; “Six Sigma, ” a program of firm large initiatives to enhance high quality and reliability;
and “Destroy your corporation dot.com, ” an initiative to drive adoption of web applied sciences.
The result was 20 years of excellent company efficiency. Between 1981 and 2001,
revenues grew from $30 billion to $126 billion, internet earnings from underneath $2 billion to $14 billion, and
inventory market capitalization from $14 billion to $510 billion—a mean annual return to stockholders
of 24%.
Jeff Immelt
Jeffrey R. Immelt was appointed CEO of GE on the age of 44. He had beforehand been head of GE’s
Plastics enterprise and, most just lately, head of Medical Methods. He had an economics and utilized
math diploma from Dartmouth and an MBA from Harvard. He claimed that his personal expertise of GE
prolonged past his 20 years with the agency—his father spent his whole profession at GE. On being
recruited from Harvard by GE in 1982, Immelt was recognized as a “younger excessive potential” which
meant that his progress could be be rigorously tracked by prime administration at GE. In 1987, Immelt
attended the manager growth course at Crotonville, GE’s administration growth heart.
This course was thought of the gateway to the manager ranks of GE. At GE Home equipment, GE Plastics
and GE Medical Methods, Immelt acquired a popularity for turning round troubled items, driving
customer support and exploiting new applied sciences. He additionally demonstrated the power to inspire
others—an inherent ability that he had revealed as an offensive tackler for Dartmouth’s soccer staff within the
1970s.6
In December 1994, the GE board started to think about doable candidates to switch Jack Welch. Immelt
was one amongst a listing of some 20 GE executives submitted by Welch for board consideration. After
5 years of cautious monitoring and evaluation the record had shrunk to a few: Jim McNerney, Bob
Nardelli and Immelt.
Immelt’s emergence as entrance runner owed a lot to his excellent success at GE Medical Methods,
which he led from 1997 to 2001. He demonstrated robust management capabilities in energizing and
motivating others: “He introduced the life and vitality that drives main development,” commented GE’s head
of HR.
His character and management type contrasted sharply with these of Welch. “The place Welch dominated
via intimidation and thrived as one thing of a cult determine, Immelt opts for the friendlier, regularguy
method. He prefers to tease the place Welch would taunt. Immelt likes to cheer individuals on reasonably
than chew them out. That type has given him a really completely different aura inside GE. He is probably not a
demigod, but it surely’s his man-of-the-people nature that pulls reward from the highest ranks to the manufacturing unit
ground.”v This completely different type of management had implications for the organizational and administration
modifications that Immelt would introduce, nevertheless, it was radical modifications in GE’s enterprise setting
that will be dominant driver of GE’s strategic and organizational growth.
GE’s Enterprise Atmosphere, 2001–12
The exceptional development in earnings and inventory market valuation that Welch had achieved was towards a
backdrop of an financial system effused by optimism, confidence, and development. The brand new century introduced a
complete new set of challenges. In his first letter to shareholders, Immelt noticed: “The exuberance of
the late 1990s and the inevitable downturn have created troublesome instances. Total industries have
collapsed, poor enterprise fashions have been uncovered, giant corporations have filed for chapter and
company credibility has been known as into query.”vi
On this world of turbulence, Immelt initially believed that GE’s diversified portfolio of companies
would supply GE the soundness to climate enterprise cycles. But, the expertise of the 21st century was
that the returns to completely different companies tended to turn into more and more correlated. Certainly, in the course of the
monetary disaster, contagion grew to become the norm—issues in anyone enterprise would are likely to infect different
companies
An additional key change within the enterprise setting was the discrediting of the 1990s’ obsession with
shareholder worth maximization. From the outset, Immelt was anxious to disassociate himself from
cruder variations of shareholder worth maximization. In all his communications to shareholders, Immelt
was emphatic that the job of the CEO was to not handle the inventory value however to handle the corporate
for the long-term earnings development that will drive the inventory value: “All of us need the inventory to go up.
However to do this we’ve got to handle the corporate. Actually, the one approach you’ll be able to run GE is to imagine that
efficiency will finally drive the inventory.”vii
The crucial problem of the enterprise setting of the 21st century, believed Immelt, was determine
the potential sources of revenue for GE. Below Welch, GE had created worth value discount, eliminating
underperforming belongings, and exploiting the alternatives provided by monetary providers. By the point
Immelt took over, these sources of worth had been mined out: GE would want to look into new areas.
Prime-line development, he reasoned, must be the motive force of bottom-line returns. But, given the
typically poor outlook for development on the planet financial system, development alternatives had been more likely to be
meager: “I seemed on the world post-9/11 and realized that over the following 10 or 20 years, there was not
going to be a lot tailwind.”
In figuring out alternatives for worthwhile natural development, Immelt sought to determine key world traits
that will supply enterprise alternatives for GE. 4 exterior traits emerged as paramount:
Demography. The ageing of the world’s inhabitants would create alternatives for items and
providers required by older individuals—healthcare providers specifically. Inhabitants development within the
creating world would additionally supply increasing demand for a lot of different of GE’s companies—
together with leisure.
Infrastructure. GE predicted huge investments in infrastructure. GE’s positioning in
infrastructure merchandise, providers and financing provided it alternatives in vitality, aviation, rail
transportation, water, and oil and gasoline manufacturing.
Rising markets. China, India, Jap Europe, Russia, Center East, Africa, Latin America and
South East Asia would supply charges of GDP development round thrice that of the world as a
complete. These international locations could be key facilities of enterprise alternative for GE.
Atmosphere. The challenges of world warming, water shortage and conservation would turn into
more and more urgent creating the necessity for applied sciences and innovatory responses to alleviate
these issues.
GE’s Progress Technique
Progress—natural development specifically—grew to become the central theme of Immelt’s technique for GE. In
2002, he dedicated GE to an natural development fee of eight% each year (underneath Welch natural development had
averaged 5% a 12 months) and to “double digit” earnings development. This eight% income development was primarily based upon
the concept GE ought to be capable to develop at between two and thrice that of world GDP. Earnings
would develop sooner than revenues, defined Immelt, due to reductions basically and
administrative expense as a share of gross sales and better margins ensuing from new merchandise and
providers. Between 2002 and 2007, GE comfortably met these targets: revenues grew at 13% every
12 months, working earnings at 14%. Nevertheless, within the wake of the monetary disaster, each revenues and
earnings went into a pointy decline.
Reshaping the Enterprise Portfolio
To place GE for stronger development, the corporate would want to exit slow-growth companies,
reallocate assets to companies the place development prospects had been robust, and enter new companies. A
key theme in Immelt’s reshaping of GE’s enterprise portfolio in the direction of greater development was the creation of
new “development platforms.” Progress platforms may very well be extensions of current companies or they may
be solely new areas of enterprise. Figuring out new development platforms was established as a central
strategic problem for GE’s companies.
In a number of instances, GE’s development platforms had been areas of enterprise the place it was already current, however
the place there was potential to significantly develop its market presence. For instance:
Healthcare. GE was the world chief in diagnostic imaging: X-ray tools, CT scanners and
MRI scanners. Below Immelt it grew to become a significant space of development for GE increasing its vary of
services and its geographical presence. Key acquisitions included: Amersham (a
UK-based diagnostics and medical tools firm), HPSC (monetary providers for medical
and dental practices), and Abbott Diagnostics (the world’s main supplier of in vitro
diagnostics).
Power. Energy era was GE’s oldest enterprise; as well as it had developed a promising
enterprise supplying tools to the oil and gasoline sector. Immelt considered vitality as a very
engaging development platform for GE. One main development areas was different vitality. Right here key
acquisitions included Enron’s wind vitality enterprise, BHA Group which provided emission
discount tools, ChevronTexaco’s coal gasification enterprise, and AstroPower which
provided photo voltaic vitality merchandise. One other was oil and gasoline the place GE diversified its choices of
services via buying Vetco Grey (subsea platforms) and Hydril Strain
Management (petroleum drilling tools).
Broadcasting and leisure. Throughout 2001-7, GE’s expanded its leisure actions
past its NBC broadcasting and cable TV companies. Key acquisitions had been Telemundo which
took GE into the fast-growing marketplace for Spanish language broadcasting and Vivendi Common’s
leisure enterprise, which took GE into movie studios and theme parks. Nevertheless, by 2009, it
was more and more evident that NBC-Common didn’t match with Immelt’s identification of GE as a
technology-based industrial firm. Consequently, NBC Common was merged with Comcast’s
cable TV channels, with the brand new firm 49% owned by GE and 51% by Comcast (GE acquired
$6.2 billion from Comcast).
Expertise infrastructure. Infrastructure supplied a invaluable umbrella for quite a few Immelt’s
development initiatives. In 2003, he had introduced: “We’re taking the corporate to a spot the place few
can comply with: massive, basic, excessive know-how infrastructure industries by which GE can have
huge aggressive benefit.”viii Progress platforms included: safety programs, the place GE’s
acquisitions included In Imaginative and prescient Applied sciences (explosive detection programs), Edwards Methods
Expertise (fireplace detection), and Interlogix (safety programs); water therapy, the place GE
acquired Ionics and BetzDearborn; and aerospace the place GE buit upon its robust place in jet
engines to diversify into avionics (Smiths Aerospace was a significant acquisition).
Creating development platforms concerned the evaluation and segmentation of markets to determine highgrowth
segments that provided the potential for engaging returns, constructing upon GE’s current
companies, and utilizing acquisitions to assist deploy GE’s monetary, technical and managerial assets
to construct a number one place. Immelt defined the method:
We did quite a lot of heavy lifting in our portfolio as a result of we did not have sufficient juice. We
noticed the place we wanted to go and we discovered that we would not get there with our current
companies. So, we purchased homeland safety, biotech, water—companies that will
give us a stronger basis for innovation.ix
Along with the sale of a majority share in NBC Common, GE additionally exited different companies, most
notably, plastics the place it believed that top petroleum costs would restrict development alternatives.
Nevertheless, by far its best divestment problem was the monetary providers enterprise, GE Capital. For
all Immelt’s emphasis on GE as a technology-based, industrial firm, GE Capital continued to
develop over most of his tenure. For 2006 and 2007, GE Capital accounted for 49% of GE’s complete internet
revenue (up from 25% in 2001). GE Capital’s development throughout 2001-7 had ben strengthened acquisitions in
tools leasing, business finance, bank cards and shopper finance. Nevertheless, even earlier than the
monetary disaster, Immelt was dedicated to pruning GE Capital. Throughout 2004 and 2005, GE bought most
of its insurance coverage companies. The monetary disaster created pressing pressures to shrink GE Capital’s belongings
(i.e. decreasing its mortgage publicity), enhance its liquidity, enhance its threat profile, and redefine its function
inside GE. More and more, GE Capital was reconceived as a provider of specialist monetary service with
a selected emphasis on “mid-market lending and leasing, financing in GE domains and some different
specialty finance segments.”x
Desk Three Common Electrical’s principal acquisitions and disposals, 2001–12
2001 NBC acquires Telemundo, a number one Spanish language tv networks.
2003 GE Healthcare acquires Instrumentarium.
2003 GE Capital acquires Transamerica Finance from AEGON.
2004 NBC acquires the leisure belongings of Vivendi Common, to type NBC Common
(80% owned by GE)
2004 GE Healthcare acquires Amersham plc. for $9.5 bn.
2004 GE Capital acquires Dillard’s bank card unit for $1.25 billion.
2004 GE sells 60% of GE Capital Worldwide Providers (GECIS) to personal fairness
corporations, Oak Hill Capital Companions and Common Atlantic, for $500 million.
2004 GE’s life and mortgage insurance coverage companies spun off as Genworth Monetary.
2004 GE Safety acquires InVision Applied sciences, a number one producer of airport
safety tools.
2005 GE Industrial Finance acquires the monetary belongings of Bombardier, a Canadian
plane producer for $1.four billion.
2006 GE Healthcare acquires IDX Methods, a medical software program agency, for $1.2 billion.
2006 GE Superior Supplies division is bought to Apollo Administration for $Three.eight billion.
2006 GE Water & Course of Applied sciences acquires Zenon Environmental Methods for $758
million.
2006 Sale of GE Insurance coverage Options and GE Life to Swiss Re for $6.5 bn.
2007 GE-Aviation acquires Smiths Aerospace for $four.6 billion.
2007 GE Oil and Fuel acquires Vetco Grey for $1.four billion.
2007 GE Plastics is bought to Saudi Arabia Primary Industries Corp. for $11.7 billion.
2007 GE NBC-Common acquires Oxygen Media (cable TV channel).
2008 GE Co. acquires Important Indicators Inc. for $860 million.
2008 GE Power Infrastructure acquires Hydril Strain Management (oilfield tools).
2008 GE Capital finance acquires Merrill Lynch Capital, CitiCapital and Financial institution BPH.
2009 GE will increase its possession in BAC to 75%
2010 GE Healthcare acquires Clarient, Inc.
2010 GE Capital deconsolidates Regency Power Companions L.P., and sells its basic
partnership curiosity in Regency
2011 GE Power Infrastructure acquires Converteam, Dresser, Inc., the Nicely Help
division of John Wooden Group PLC, Wellstream PLC, Lineage Energy Holdings, Inc.
GE’s Aggressive Benefit
A significant theme in all Immelt’s speeches and technique displays as Chairman and CEO was
emphasis of the aggressive benefits that GE shared throughout its completely different companies. Immelt positioned
a selected emphasis on three sources of aggressive benefit: know-how and innovation, buyer
focus and built-in options, and world presence.
Expertise
Immelt recognized know-how as a significant driver of GE’s future development and emphasised the necessity to
pace the diffusion of recent applied sciences inside GE and switch the company R&D heart into an
mental hothouse. His dedication to know-how was signaled by increasing GE’s R&D budgets.
This started with a $100 million improve to GE’s company R&D heart in Niskayuna, New York and
was adopted by the development of recent International Analysis Facilities in Shanghai, Munich, and Rio de
Janeiro. In 2012, GE claimed to have 37,000 technologists working in its companies and in its
analysis facilities.
Immelt’s emphasis on know-how mirrored his perception that the first driver of gross sales was nice
merchandise: “You could be six sigma, you are able to do nice supply, you could be nice in China, you are able to do
every part else nicely—but when you do not have a very good product, you are not going to promote a lot”.xi
Growing product high quality and product innovation grew to become a crucial efficiency indicator for all of
GE’s companies.
Below Immelt, GE targeted upon fewer, larger, longer-term initiatives. This emphasis was mirrored in
GE’s Superior Expertise Applications in molecular imaging and diagnostics, nanotechnology, vitality
conversion, superior propulsion and sustainable vitality.
Immelt was significantly all for figuring out and supporting initiatives that provided large-scale
market potential. “Creativeness Breakthroughs” had been promising initiatives with the potential to create
$100 million in gross sales over a three-year interval. By mid-2006, some 100 Creativeness Breakthroughs
had been recognized and individually accredited by Immelt. Main Creativeness Breakthroughs included:
Evolution hybrid locomotive: an energy-saving locomotive that will use vitality misplaced in braking
to be saved in batteries.
Sensible Grid: a wedding of IT with electrical infrastructure to help twenty-first century vitality
wants.
Sodium batteries: a novel, patented battery know-how for large-scale electrical energy storage.
GE’s “Ecomagination” was a program of product and enterprise growth launched in 2005 as
“GE’s dedication to handle challenges resembling the necessity for cleaner, extra environment friendly sources of
vitality, decreased emissions and ample sources of unpolluted water.” xii The Ecomagination program
supplied funding and coordination for creating environmentally-friendly merchandise and enterprise
options throughout GE’s completely different enterprise divisions. In 2011 it was credited with producing $21 billion
of unpolluted vitality income.
Buyer Focus and Built-in Options
All through his profession at GE, Immelt has emphasised buyer orientation and worth of spending time
with prospects, constructing relationships with them, and dealing on their issues. Quickly after taking
over as CEO, Immelt emphasised the primacy of buyer focus:
We’re dramatically altering our useful resource base from offering help to creating worth.
Each enterprise has features that add excessive worth by driving development. These are the features
that take care of the client, create new merchandise, promote, manufacture, handle the cash and
drive controllership. Name that the entrance room. Each enterprise has backroom help
features that typically are so giant and bureaucratic they create a drain on the system and
maintain us from assembly our prospects’ wants and maintain us from rising. So we’ll
take extra of the back-room assets and put them within the entrance room—extra gross sales individuals,
extra engineers, extra product designers. We’re altering the form of this firm and
we’re doing it throughout a recession.”xiii
The elevated buyer focus concerned elevated funding in GE’s advertising perform—together with
hiring proficient advertising executives and creating processes for figuring out new product and
service choices and unmet buyer wants.
A significant avenue for translating enhanced buyer focus into worth creation for GE was via
bundling merchandise with help providers to supply custom-made “buyer options.” Increasing the
vary of customer support choices to incorporate technical providers, monetary providers, coaching, and
different types of buyer help. Creating buyer options required coordination throughout GE’s
companies. For instance, within the case of a brand new hospital growth, there is perhaps alternatives not
only for medical tools but in addition for lighting, generators and different GE companies as nicely. To use
new alternatives that reduce throughout GE’s current divisional construction, GE started to create crossbusiness,
high-visibility advertising campaigns.
As we will see, growing GE’s capability to serve prospects higher with built-in options was a
key consideration in Immelt’s reorganization of GE’s construction which mixed and reorganized GE’s
divisional construction (see under).
International Presence
Immelt believed that among the largest payoffs from higher buyer orientation would
come from GE’s elevated success in worldwide markets. Positioning GE to compete in
rising rising markets was a central strategic precedence for GE. In 2011, Immelt appointed
vice chairman John Rice to guide its worldwide development efforts—with explicit emphasis on
high-growth markets resembling China, India, the Center East and Brazil. Maximizing GE’s
potential in these markets required a coordinated method throughout GE’s companies: “A fantastic
instance is our spectacular success with the Beijing 2008 Olympic Video games. This occasion
produced $2 billion of revenues throughout a number of GE platforms, whereas constructing our
relationships in China. In 2008, we introduced a multifaceted partnership with Mubadala, the
business investing arm of Abu Dhabi, which features a business finance three way partnership,
initiatives in renewable vitality, and a coaching heart in Abu Dhabi. Mubadala can even turn into
a ‘Prime 10’ GE investor.”xiv In 2009, GE introduced its “Firm-to-Nation” technique the place
GE labored immediately with authorities with a purpose to meet native wants throughout a spread of
infrastructure investments. China, India and Brazil the place the focal factors for GE’s top-down
enterprise initiatives. In 2012, GE introduced that, “In Nigeria, we’re constructing out a
complete “Firm-to-Nation” method to handle infrastructure challenges; Nigeria
ought to be our subsequent billion-dollar nation.”xv
Internationalization concerned a basic rethink of GE’s method to product growth
and an adapting services to satisfy native market wants. GE’s conventional method
had been to develop merchandise for the US market, then to supply less complicated, less expensive “defeatured”
variations to rising markets. Combining GE’s worldwide emphasis with its
growing buyer focus, reoriented GE in the direction of a “customer-optimization” method to
product growth the place native groups got higher freedom in adapting and
innovating merchandise for their very own markets. The result was “reverse innovation”: lots of
the product ideas developed to satisfy the must rising markets prospects may very well be
utilized in GE’s the superior industrialized nations. For instance, a low value, moveable, battery
operated ultrasound machine designed to satisfy the must physicians in India and China,
grew to become a business success within the US.xvi
Exploiting world alternatives additionally concerned globalizing GE’s group and its expertise base. For
instance, the headquarters of GE Healthcare was moved to the UK, whereas in 2011 it introduced the
switch of its X-ray enterprise from Wisconsin to Beijing, China. Internationalization of the workforce
included core company features: by 2006, of 400 youthful members of GE’s audit workers, about 60
had been Indian.
Altering the GE Administration Mannequin
The administration system that Immelt inherited had been reformulated by his predecessor and mentor,
Jack Welch, however as additionally a product of 120 years of steady growth. Immelt revered GE’s
administration programs and course of, and acknowledged that lots of them had been so deeply embedded inside
GE’s tradition that they had been integral to GE’s identification and the way in which it considered the world. On the core of
GE’s administration system was its administration growth—its so-called “expertise machine”—and its
system of efficiency administration.
Management Growth and Efficiency Administration
From early days, GE was dedicated to internally developed management: all of its CEOs had been
promoted from inside the firm. Common Electrical’s meritocratic system of growth and
promotion was put in place by Charles Coffin, the CEO who succeeded Edison in 1892. Since then
GE has been a “CEO manufacturing unit” producing prime administration expertise not just for GE, however for companies
worldwide. Its administration growth system rested on two key pillars: its company college at
Crotonville, NY, and its “Session C” system for monitoring managers’ efficiency, planning their’
careers, and formulating succession plans for each administration place at GE from division
heads upwards. Below Welch the Session C evaluations grew to become all-day occasions at every of GE’s companies
the place Welch and the division CEO reviewed the efficiency and potential of each supervisor.
GE’s administration appraisal and growth processes along with its monetary and strategic
planning programs shaped the core of GE’s efficiency administration system. Below Jack Welch the
GE’s system of efficiency administration grew to become more and more primarily based upon quantitative targets that
allowed focus and accountability. Immelt was equally dedicated to GE’s metrics-driven method to
efficiency administration: “Nothing occurs on this firm with out an output metric,” noticed
Immelt. All of Immelt’s strategic initiatives—from earnings and natural development targets to productiveness
enhancements, reductions in overhead prices and 6 sigma high quality—had been linked to specific
quantitative targets. In 2005 GE standardized its buyer satisfaction metrics, specializing in “internet
promoter scores” (the proportion of shoppers who would suggest GE to a pal, minus the
share who would not).
Immelt’s strategic initiatives represented a problem to GE’s metrics-based efficiency administration
system. Targets resembling innovation, enterprise promoting, and environmental sustainability tended to much less
amenable to quantification and goal measurement than objectives of value effectivity, productiveness and
profitability.
The shifting of strategic priorities additionally had implications for GE’s administration growth system.
As with Jack Welch, Immelt noticed his most vital process as serving to to develop GE’s managerial
expertise. Implementing GE’s development technique required that GE’s workers internalized development as half
of their private mission. This required inculcating amongst GE’s managers the abilities and aptitudes to
turning into “development leaders.” A benchmarking train investigating the administration traits of
15 corporations with excellent data of income development ensuing within the identification of 5
“development traits.” These included: exterior focus, creativeness and creativity, decisiveness and clear
considering potential, inclusiveness and deep area experience.
These development traits grew to become a part of GE’s annual HR assessment, with every of GE’s prime 5000 individuals rated
on every of the 5 traits and the outcomes of the evaluation constructed into their subsequent growth
plans. Profession planning additionally modified: due to the significance of “area experience” (information of
the actual enterprise), managers had been required to remain longer in every job.
Altering Organizational Construction
Probably the most seen of the administration modifications launched by Immelt involved the general construction of
the group. Between 2002 and 2008, Immelt reversed a number of of the foremost structural modifications
that Welch had launched in the course of the 1980s. As a part of “delayering” and his effort to create a extra
responsive firm, Welch had damaged up GE’s main industrial sectors into smaller divisions. In
order to facilitate higher cross-business integration, the bundling of services into
“programs”, and the creation of recent “development platforms”, Immelt progressively reorganized GE’s
divisions right into a smaller variety of broad-based sectors. Reorganizations in 2002, 2005, and 2008
decreased the variety of enterprise sectors reporting to Immelt from twelve to 5; earlier than an additional
reorganization in 2010 elevated them to seven (see Figures 2 and three).
Determine 2 GE’s Organizational Construction, 2001
Determine Three Common Electrical Organizational Chart, February 2012
Innovation and New Enterprise Growth
A key problem was to reconcile GE’s well-known obsession with profitability and price management with
nurturing the innovation wanted to drive development. Innovation, particularly when it included massive, longterm
initiatives, concerned substantial threat. The hazard was that GE’s obsession with efficiency metrics
would possibly discourage enterprise unit heads from making massive bets on promising new alternatives.
Moreover, given the truth that lots of the largest alternatives had been more likely to require cooperation
throughout divisions additional elevated the chance that that they’d fail to get the help they
wanted. The “Creativeness Breakthroughs” initiative was designed to make sure that main, innovatory
initiatives would obtain the funding and a spotlight wanted to take advantage of their potential. “Creativeness
Breakthroughs” had been promising initiatives for brand spanking new enterprise creation that had the potential to create
$100 million in gross sales over a three-year interval. By mid-2006, some 100 Creativeness Breakthroughs
had been recognized and individually accredited by Immelt. As soon as accredited, these initiatives had been
shielded from regular price range pressures. About half concerned new merchandise and the opposite half
concerned altering business construction. Immelt noticed these Innovation Breakthroughs as a way of
focusing consideration on the purpose of enterprise creation and growth. On condition that a few of these
initiatives concerned substantial ranges of funding (GE’s hybrid locomotive, for instance, would
require tens of hundreds of thousands of ), by lifting these initiatives from the enterprise stage to the company
stage, it took stress off the enterprise heads. One downside, noticed Immelt, was that GE didn’t
possess adequate product managers and programs engineers to place in command of high-visibility
applications involving substantial dangers and substantial doable returns.
Advertising and Gross sales
Realizing Immelt’s purpose of a customer-driven firm required revitalization of GE’s advertising
perform: “Advertising was the place the place washed-up salespeople went,” noticed Immeltxvii
Upgrading GE’s advertising was achieved via creating the brand new senior place of Chief Advertising
Officer, the recreation of GE’s Superior Advertising Seminar, creating an Skilled Industrial
Management Program, and requiring that each enterprise appoint a VP-level head of promoting. Most
vital was the creation of GE’s Industrial Council, which introduced collectively GE’s main gross sales
and advertising leaders to develop new enterprise concepts, to switch finest practices and instill a
business tradition inside GE. A key initiative was “On the Buyer, For the Buyer, ” a program
that deployed six sigma in advertising, gross sales, and buyer relations actions, utilized GE’s six sigma
methodologies to prospects’ personal companies, and used new metrics to trace buyer satisfaction and
buyer attitudes.
As with all facets of GE’s method to administration, advertising was topic to the identical systematized,
metrics-driven evaluation as all different features inside the agency, typically with some startling revelations:
We’re getting the gross sales pressure higher educated and geared up with higher instruments and metrics. A
good instance is what we’re doing to create self-discipline round pricing. Not way back, a man
right here named Dave McCalpin did an evaluation of our pricing in home equipment and came upon that
about $5 billion of it’s discretionary. Given all the selections that gross sales reps could make on
their very own, that is how a lot is in play. It was probably the most astounding quantity I might ever heard—
and that is simply in home equipment. Extrapolating throughout our companies, there could also be $50 billion
that few individuals are monitoring or accountable for. We’d by no means enable one thing like that
on the fee aspect. On the subject of the costs we pay, we research them, we map them, we work
them. However with the costs we cost, we’re too sloppy.23
The GE Progress Course of
Very quickly after his appointment as GE’s chairman and CEO in 2001, Immelt had articulated his
strategic imaginative and prescient of GE as a technology-based, buyer targeted, development oriented industrial
powerhouse. Implementing this imaginative and prescient was a long run mission. Immelt’s modifications in GE’s
organizational construction, its administration growth and appraisal system, and its advertising and
know-how features had been all efforts to align GE’s construction, programs and processes with the supposed
technique. By 2006, these numerous initiatives had coalesced in Immelt’s thoughts round an built-in
system that he referred to the GE Progress Course of. As Immelt defined:
If you happen to run a giant multibusiness firm like GE and also you’re attempting to guide
transformative change, that goal needs to be linked to hitting levers throughout all the
companies—and it should maintain that up over time. So you have to have a course of.
That is true from an inner standpoint, but it surely’s additionally the one approach you receives a commission within the
market. Traders must see that it is repeatable.
I knew if I may outline a course of and set the correct metrics, this firm may go
100 miles an hour in the correct path. It took time, although, to know development as
a course of. If I had labored out that wheel-shaped diagram in 2001, I’d have
began with it. However in actuality, you get these items by wallowing in them awhile. We
had a number of steps labored out in 2003, but it surely took one other two years to fill within the
course of.xviii
Throughout 2006, Immelt’s view of GE’s development engine as an built-in, six-part course of was
disseminated all through the group and have become a key a part of Immelt’s communication to GE’s
exterior constituencies (see Determine four).
Determine four Common Electrical’s six-part development course of
Supply: Common Electrical 2005 Annual Report, p.eight
The Problem of Integration and Complexity
Widespread to many of the organizational modifications initiated by Immelt was the need to create worth
via the numerous components of GE working collectively extra intently and extra successfully. “Working at GE is
the artwork of considering and taking part in massive; our managers must work cross-function, cross-region, crosscompany.
And we’ve got to be about massive functions, ” noticed Immelt.25
Nevertheless, higher integration throughout GE’s completely different companies created advanced coordination issues.
Contemplate GE initiatives regarding product bundling and buyer options via its “enterprise
promoting” and “firm to nation” initiatives. At one stage these methods are intuitive and easy:
If someone’s constructing a hospital, which may symbolize a complete package deal of $1 billion,
of which the GE market potential is perhaps $100 million. We’re in all probability already
speaking to the C-suite as a result of we promote the medical tools. What we have to do is
set issues up in order that the medical rep can carry within the lighting rep, the turbine rep, and
so on.
Equally with complete international locations:
In Qatar, the emir desires to know everyone doing enterprise in his nation. In a dinner
set as much as discuss oil and gasoline bids, he would possibly say, “Jeff, I will put $10 billion
right into a hospital, ” or he would possibly point out that they’ll purchase GE engines for Qatar
Airways.xix
Nevertheless, the organizational ramifications had been advanced. Gross sales and advertising workers turning into much less
targeted upon their explicit enterprise and extra oriented in the direction of the alternatives supplied from
throughout the corporate as a complete. In observe, this creates advanced issues of group, experience,
and incentives. Exhibit 1 describes the difficulties encountered within the apparently easy bundling of
medical diagnostic tools with consulting providers.
Exhibit 1 GE Medical Methods Buyer Options Initiative
One of many earliest initiatives to take advantage of alternatives for bundling services was to
mix the sale of medical imaging tools with consulting providers. In 2001, GE Medical
Methods (quickly to turn into GE Healthcare) created a brand new unit, Efficiency Options, to supply an
built-in method to hospital diagnostic imaging departments by combining tools with
technical help and patient-management programs. A lead buyer was Stanford College Medical
Middle which transitioned to all-digital imaging for its hospital and outpatient unit.
After a promising begin, by 2005, Efficiency Options was in bother. The medical tools gross sales
individuals had restricted understanding of the consulting providers being provided by the Efficiency
Options unit and supplied few gross sales leads for the brand new built-in providing. They had been additionally reluctant
to share their prospects with gross sales personnel from Efficiency Options. In the meantime, the gross sales
personnel from Efficiency Options thought of themselves as “answer suppliers” and felt
constrained by having to restrict their options solely to GE choices.
Supply: Primarily based upon Ranjay Gulati “Silo Busting The best way to Execute on the Promise of Buyer
Focus, ” Harvard Enterprise Evaluate (Might, 2007).
As Immelt acknowledged, organizing to satisfy buyer wants implied a special sort of organizational
construction from organizing for operational effectivity. Related challenges existed in relation to GE’s
efforts to develop large-scale improvements that reduce throughout its current business-based construction.
Reconciling these completely different coordination wants posed organizational challenges that even GE had not
absolutely resolved:
I’ve discovered that few corporations are literally structured to ship services in a
synchronized approach that is engaging from a buyer’s perspective. Particular person items are
traditionally targeted on perfecting their merchandise and processes, and provides little thought to
how their choices is perhaps much more invaluable to the top person when paired with these of
one other unit. It is not simply that the established order would not reward collaborative conduct—
though the correct incentives are additionally crucial. It is that the connections actually aren’t in
place.
One technique to forge these connections is to dispose of conventional silos altogether and
create new ones organized by buyer segments or wants. Many corporations, nevertheless, are
understandably reluctant to let go of the economies of scale and depth of information and
experience related to non-customer-focused silos. An organization organized round
geographies can customise choices to go well with native preferences, as an example, whereas a
technology-centric agency could be fast to market with technical improvements. In lots of instances,
practical and geographic silos had been created exactly to assist corporations coordinate such
actions as designing progressive merchandise or gaining geographic focus. A buyer focus
requires them to emphasise a special set of actions and coordinate them in a special
approach.
Of their preliminary makes an attempt to supply buyer options, corporations are more likely to create
buildings and processes that transcend reasonably than obliterate silos. Such boundary-spanning
efforts could also be extremely casual—even so simple as hoping for or encouraging serendipity
and impromptu conversations that result in unplanned cross-unit options. However the informal
alternate of data and concepts is mostly simplest amongst senior executives,
who’ve a greater understanding than their subordinates of company objectives and simpler
entry to different leaders within the group.xx
Establishing casual collaboration throughout divisional boundaries was the way in which by which corporations
resembling Samsung, IBM, and had responded to the conflicting necessities for responsiveness and
integration. For GE nevertheless, versatile boundary spanning risked conflicting each with GE’s metricsbased
system of efficiency administration and with its tradition of inner competitors. Inner
competitors—between divisions and enterprise items for assets and between people for
efficiency bonuses and promotion was a basic function of its administration programs and its
organizational tradition.
Immelt’s efforts at making a extra built-in GE, had additionally modified the connection between GE’s
company headquarters and the companies. Below Welch, there was a transparent division of roles and
obligations between the enterprise divisions and that of the company HQ. The enterprise divisions
with their particular person CEOs had been answerable for working their very own companies each operationally and
strategically. The function of the company headquarters was each to help the companies via
numerous centralized providers and to drive enterprise efficiency by placing divisional prime administration
underneath intense stress to ship.
As headquarters grew to become more and more concerned in selling and supporting developmental initiatives
(e.g. “Creativeness Breakthroughs” and enterprise promoting), so the company HQ grew to become extra of a
accomplice with the enterprise divisions reasonably than an overseer of divisional efficiency and interrogator
of enterprise methods.
Consequently, a lot of the simplicity and directness related to Welch’s administration type had been
supplanted by an emphasis on managing integration which inevitably concerned extra intricate and
subtle approaches to technique execution. Creating new merchandise, companies, and buyer
options required new and extra advanced cross-business and cross-functional coordination inside
GE. The brand new efficiency necessities had been being constructed on prime of GE’s current commitments to
effectivity, high quality and monetary efficiency. May this added complexity be borne by an organization
that was steadily rising bigger and encompassing a widening portfolio of companies and merchandise
Most US corporations that had achieved excellent efficiency by efficiently combining innovation
with effectivity in fast-moving enterprise environments had been pretty specialised. Actually the nice
majority of corporations on Fortune’s record of “most admired corporations” had been strongly targeted round a
single core enterprise. To seek out examples of extremely diversified, multinational firms that had been additionally
outstandingly profitable, Immelt had ot look far past US shores to Samsung and Tata Group. As
Immelt reminded his prime managers, GE was coming into uncharted waters: “The enterprise e book that may
enable you hasn’t been written but.”
APPENDIX. Common Electrical Section Efficiency
Desk A1. Common Electrical: phase efficiency, 2006–11 ($ hundreds of thousands)
2011 2010 2009 2008 2007 2006
Revenues
Power Infrastructure 43694 37514 37134 38571 30698 25221
of which:
Power 31080 29040 30185 31833 24788 19406
Oil and Fuel 13663 9483 7743 7417 6849 4340
Expertise Infrastructure — 37860 42474 46316 42801 37687
of which:
Aviation 18859 17619 18728 19239 16819 13017
Enterprise Options n.a n.a. 3957 4710 4462 3951
Healthcare 18083 16897 16015 17392 16997 16560
Transportation 4885 3370 3827 5016 4523 4159
Residence & Enterprise
Solutionsa
8465 8648 8443 n.a n.a n.a
NBC Common n.a. 16901 15436 16969 15416 16188
GE Capital 45730 46222 48906 67008 66301 57943
Shopper and Industrial n.a. n.a. n.a 11737 12663 13202
Revenue
Power Infrastructure 6650 7271 6842 6080 4817 3518
of which:
Power 4992 5887 5782 5067 4057 2918
Oil and Fuel 1872 1553 1222 1127 860 548
Expertise Infrastructure n.a 6314 7489 8152 7883 7308
of which:
Aviation 3512 3304 3923 3684 3222 2802
Enterprise Options n.a n.a. 704 691 697 620
Healthcare 2803 2741 2420 2851 3056 3142
Transportation 757 315 473 962 936 774
Residence & Enterprise
Solutionsa
300 457 400 365 1034 970
NBC Common n.a. 2261 2264 3131 3107 2919
GE Capital 6549 3265 2344 8632 12243 10397
Belongings
Power Infrastructure 54389 38606 36663 33836 31466 24456
Expertise Infrastructure n.a 51474 56392 58967 57670 49641
Aviation 23567 21175 20377 n.a n.a n.a
Healthcare 27981 27784 27136 n.a n.a n.a
Transportation 2633 2515 2714 n.a n.a n.a
Residence & Enterprise
Solutionsa
4645 4280 4965 5065 5351 5740
NBC Common — 33792 32282 33781 33089 31425
GE Capital 552514 56533
7
53706
zero
57290
Three
58396
5
49100
zero
Funding in mounted belongings
Power Infrastructure 2078 954 945 1226 1054 867
Expertise Infrastructure n.a 789 880 1395 1954 1389
Aviation 699 471 442 n.a n.a n.a
Healthcare 378 249 302 n.a n.a n.a
Transportation 193 69 68 n.a n.a n.a
Residence & Enterprise
Solutionsa
278 229 232 284 363 373
NBC Common — 286 282 131 306 352
GE Capital 9882 7674 6426 15313 17832 14489
Notes: a For 2006-9, the figures for Residence and Enterprise Options check with the Shopper and Industrial phase
Supply: Common Electrical, 10-Okay Report, 2008.
Desk A2. GE Capital: monetary information by enterprise phase (in $ hundreds of thousands)
2011 2010 2009 2008 2007 2006
Revenues
Industrial Lending & Leasing 18178 18447 20762 26742 27267 25833
GE Cash n.a n.a n.a 25012 24769 19508
Shopper 16781 17204 16794 n.a n.a n.a
Actual Property 3712 3744 4009 6646 7021 5020
Power Monetary Providers 1223 1957 2117 3707 2405 1664
GE Industrial Aviation
Providers
5262 5127 4594 4901 4839 4353
Revenue
Industrial Lending & Leasing 2720 1554 963 1805 3801 3503
GE Cash n.a n.a n.a 3664 4269 3231
Shopper 3551 2523 1282 n.a n.a n.a
Actual Property (928) (1741) (1541) 1144 2285 1841
Power Monetary Providers 440 367 212 825 677 648
GE Industrial Aviation
Providers
1150 1195 1016 1194 1211 1174
Complete belongings
Industrial Lending & Leasing 193869 202650 205827 232486 229608 n.a
GE Cash n.a n.a n.a 183617 209178 n.a
Shopper 139000 147327 176046 n.a n.a n.a
Actual Property 60873 72630 81505 85266 79285 n.a
Power Monetary Providers 18357 19549 22616 22079 18705 n.a
GE Industrial Aviation
Providers
48821 49106 51066 49455 47189 n.a
Supply: Common Electrical, 10-Okay Report, 2011.
Notes
i Transcript, Common Electrical Firm Annual Shareholder Assembly, April 25, 2012
ii “Letter to Stakeholders,” Common Electrical Annual Report, 2002: p. Three,
iii “Can a Specialist Run Common Electrical” March 7, 2012. http://blogs.ft.com/businessblog/2012/can-aspecialist-
run-general-electric/#axzz1tv41XKUt
iv “What Makes GE Nice” Fortune, March 6, 2006, pp. 90–6.
v “The Days of Welch and Roses, ” Enterprise Week, April 29, 2002.
vi Common Electrical, Annual Report, 2002.
vii Tackle to shareholders, Annual Shareowners’ Assembly, Philadelphia, April 26, 2006.
viii Letter to stakeholders,” Common Electrical Annual Report, 2002: p. 9.
ix “Progress as a Course of: An Interview with Jeff Immelt, ” Harvard Enterprise Evaluate, June, 2006.
x “Letter to shareowners,” Common Electrical Annual Report, 2011: p. 5.
xi “Progress as a Course of: An Interview with Jeff Immelt,” Harvard Enterprise Evaluate, June, 2006.
xii “GE Launches Ecomagination,” Common Electrical Press Launch, Might 9, 2005.
xiii Ibid.
xiv Common Electrical, Annual Report 2008, pp. 6–7.
xv “Letter to shareowners,” Common Electrical Annual Report, 2011: pp. 6.
xvi J.R. Immelt, V. Govindarajan and C. Trimble, “Hoe GE is Disrupting Itself,” Harvard Enterprise Evaluate,
October 2009: pp. 56-65.
xvii “Progress as a Course of: An Interview with Jeff Immelt,” Harvard Enterprise Evaluate, June, 2006.
xviii Ibid.
xix Ibid.
xx Ibid.
