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Miles Cudworth John Dickmann Christopher Juhlke Ben Gaither Zachary Krause General Electric Imagination at Work.

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Presentation on theme: "Miles Cudworth John Dickmann Christopher Juhlke Ben Gaither Zachary Krause General Electric Imagination at Work."— Presentation transcript:

1 Miles Cudworth John Dickmann Christopher Juhlke Ben Gaither Zachary Krause General Electric Imagination at Work

2 The General Electric Company (GE) is a multinational American technology and services conglomerate incorporated in the state of New York. Founder: Thomas Edison Business type is public Chairman and CEO: Jeff Immelt Vice Chairman, CFO: Keith Sherin Headquarters: Fairfield, Conneticut Industry: Conglomerate (mixture of several unrelated companies) HistoryWelchImmeltCultureEVO General OverviewHow it startedProducts

3 In 1876, Thomas Edison invented one of the greatest and useful inventions ever; the incandescent electric lamp. General OverviewHow it startedProducts HistoryWelchImmeltCultureEVO

4 In 1878, Thomas Edison founded the Edison General Electric Company By 1890, Edison had organized his various businesses into the Edison General Electric Company. General OverviewHow it startedProducts HistoryWelchImmeltCultureEVO

5 In 1879, Elihu Thomson and Edwin J. Houston formed the rival Thomson- Houston Electric Company. Due to Thomson’s failing success in 1892, these two major companies combined, in a merger arranged by financier J. P. Morgan to form the General Electric Company, with its headquarters in Schenectady, New York. General OverviewHow it startedProducts HistoryWelchImmeltCultureEVO

6 In 1911 the National Electric Lamp Company (NELA) was absorbed into General Electric's existing lighting business. GE then established its lighting division headquarters at Nela Park in East Cleveland which is still there today and has been named a historic site. General OverviewHow it startedProducts HistoryWelchImmeltCultureEVO

7 Radio Corporation of America (RCA) NBC Universal (except NBC Radio) Genworth Financial The Electric Bond and Share Co GE Commercial Finance GE Consumer Finance Genie GE Infrastructure GE Money Telemundo GE Healthcare Transamerica Finance InVision Technologies Smiths Aerospace Vetco gray SABIC GE Security GE Industrial General OverviewHow it startedProducts HistoryWelchImmeltCultureEVO

8 Light bulbs Freezer Refridgerators Washers Dryers Ovens Air conditioners Humidifiers/dehumidifiers Plastic bottled dispensers (pop/water) Jet Engines Locomotive engines Ventilation systems Water systems Food compactors & Disposers Cooking foodstuffs Ventilation systems Turbines General OverviewHow it startedProducts HistoryWelchImmeltCultureEVO

9 Yearly Shareholder Return (20-year period) 23 % Increase in Total Shareholder Wealth: $380 billion HistoryWelchImmeltCultureEVO Jack Welch By the numbersOld StrategyNew StrategyAfter

10 Welch’s Corporate Model: –High Discipline –High Efficiency –Cut costs whenever possible Per Annum organic growth rate: –Only 4% How did GE still achieve high yearly returns? By the numbersOld StrategyNew StrategyAfter HistoryWelchImmeltCultureEVO

11 “Change before you have to” Transition from Manufacturing to Services –Acquisition of RCA’s NBC in 1986 Eventual expansion of NBC division By the numbersOld StrategyNew StrategyAfter HistoryWelchImmeltCultureEVO

12 By the numbersOld StrategyNew StrategyAfter HistoryWelchImmeltCultureEVO

13 Implementation of lean Six Sigma methodology for manufacturing and service processes Originally established in U.S. by Motorola Goal: meet or exceed level of 3.4 defects per million operations within any process By the numbersOld StrategyNew StrategyAfter HistoryWelchImmeltCultureEVO

14 Six Sigma Launched by Welch in 1995 Implemented initially for 200 projects By 1997, statistical process control used in 6,000 GE projects, training sessions $320 million reported (1998) in benefits from Six Sigma implementation By the numbersOld StrategyNew StrategyAfter HistoryWelchImmeltCultureEVO

15 Welch’s leadership strategy: –Achieve #2 ranking or better in each business category –Treat even the largest, formal business informally –General Electric as “The Grocery Store” –Known by employees on first name basis By the numbersOld StrategyNew StrategyAfter HistoryWelchImmeltCultureEVO

16 Sustaining Welch’s historic growth Determining new sources for growth Shareholder value, shareholder value, shareholder value –Nobody else has created greater shareholder value than Mr. Welch Continue to differentiate GE through its businesses, reward independently for results By the numbersOld StrategyNew StrategyAfter HistoryWelchImmeltCultureEVO

17 The people make GE GE has over 300,000 employees in over 140 countries. What makes them so unique is that they are driven to make life for everyone better and that motivation is what drives them to succeed. “We’re passionate about making life better with new ideas and technologies.” HistoryWelchImmeltCultureEVO General OverviewImaginationCECOR4 Commitments

18 Chairman & CEO, Jeffery Immelt Immelt has held several global leadership positions since coming to GE in 1982, including roles in GE's Plastics, Appliance, and Medical businesses. In 1989 he became an officer of GE and joined the GE Capital Board in 1997. A couple years later, in 2000, Mr. Immelt was appointed president and chief executive officer. Jeffrey R. Immelt is the ninth chairman of GE, a post he has held since September 7, 2001. Jeffrey R. Immelt ….has worked to transform GE into a more global, diverse and customer-driven culture. Mr. Immelt also laid the vision for GE's ambitious ecomagination initiative and has twice been named one of the World's Best CEO's by Barron's. General OverviewImaginationCECOR4 Commitments HistoryWelchImmeltCultureEVO

19 Sep. 2003 – Immelt asks for 5 IB’s per dept. Nov. 2003 – Immelt selects 34 IB’s Feb. 2004 – Monthly reviews of each IB begins Sep. 2004 – Ecomagination project begins Jan. 2005 – CECOR framework initiated General OverviewImaginationCECOR4 Commitments HistoryWelchImmeltCultureEVO

20 “Ecomagination is completely revolutionizing the way we collaborate with customers, broadly expanding our product portfolio through technical and commercial innovations, facilitating enlightened policy dialogues from Washington to Beijing, motivating employees around the world and attracting new talent on the campuses where we prospect for tomorrow’s GE leaders.” -Jeffrey Immelt CEO, Lorraine Bolsinger VP Ecomagination General OverviewImaginationCECOR4 Commitments HistoryWelchImmeltCultureEVO

21 Water ABMet® Technology Advanced Membrane Technology Desalination Homespring Central Water Purifier Permatreat EPP® ZeeWeed® Membrane Technology Lighting Compact Fluorescent Lighting Diamond Precise® Lamps Homebuilder Program Halogen HIR™ Lamps LEDs — Refrigerated Display Lighting LEDs — Signage & Architecture LEDs — Transportation Signals T8 Linear Fluorescent Lamps General OverviewImaginationCECOR4 Commitments HistoryWelchImmeltCultureEVO

22 For the Home Dishwashers with SmartDispense™ Technology Front-Load Washers Hot and Cold Water Dispenser Profile Harmony™ Washers Refrigerators with ClimateKeeper2™ Energy BCL304e Series Centrifugal Compressor Cleaner Coal DLN 2.6+ Combustion System Dry Low NOx Combustion System (DLN 1+) Boiling Water Reactor H System™ Turbine Jenbacher Biogas Engine Jenbacher Coal Mine Gas Engine Jenbacher Landfill Engine Kn3 Optimization Software LMS100 Gas Turbine Photovoltaic Technology Powerwave+™ PulsePleat® Pleated Filter Elements UltraScan™ Duo Wind Turbines X$D ULTRA® Motor General OverviewImaginationCECOR4 Commitments HistoryWelchImmeltCultureEVO

23 Transportation Capital Solutions, Fleet Services CFM56-3 Upgrade China Mainline Evolution Evolution™ Series Locomotive GE90-115B Aircraft Engine GEnx Aircraft Engine Hybrid Locomotive Kazakhstan Evolution™ Locomotive LM2500+ Marine Engine Russian-Built Locomotive Modernizations General OverviewImaginationCECOR4 Commitments HistoryWelchImmeltCultureEVO

24 Calibrate What industry are you in? Who are the customers and what do they need? Explore What are our potential avenues of growth? Which ones will you target? Create What are our best ideas? What is the customer value? Organize Is the go-to-market plan aligned with the value proposition? Are you prepared to implement? Realize Will you meet your revenue and income plans? How will you measure customer and GE impact? General OverviewImaginationCECOR4 Commitments HistoryWelchImmeltCultureEVO

25 1) Double investments in clean R&D GE invested $900 million in cleaner technologies in 2006. GE is growing its research in such technologies from $700 million in 2005 to $1.5 billion in 2010. General OverviewImaginationCECOR4 Commitments HistoryWelchImmeltCultureEVO

26 2) Increase Revenues from Ecomagination products GE has increased its ecomagination pipeline by 50% over the last year – from 30 products to 45. 2006 revenues at $12 billion; orders and commitments have increased to $50 billion. GE will grow revenues in products and services that provide significant and measurable environmental performance advantages to its customers – to at least $20 billion in 2010, with more aggressive targets thereafter. General OverviewImaginationCECOR4 Commitments HistoryWelchImmeltCultureEVO

27 3) Reduce greenhouse gas emissions GE is on track to reach its internal commitment. GHG emissions from operations have been reduced by about 4% from the 2004 baseline. GHG and energy intensity have been reduced by 21% and 22% respectively compared to 2004. The company will reduce its greenhouse gas (GHG) emissions and improve the energy efficiency of its operations - including reducing the intensity of its GHG emissions 30% by 2008, and improving energy efficiency 30% by the end of 2012 (all compared to 2004). This will amount to an absolute total decrease of 1% from 2005 emissions. General OverviewImaginationCECOR4 Commitments HistoryWelchImmeltCultureEVO

28 4) Keep the public informed. GE is keeping the public informed through its Ecomagination Web site, dozens of global conferences, and stakeholder events. General OverviewImaginationCECOR4 Commitments HistoryWelchImmeltCultureEVO

29 HistoryWelchImmeltCultureEVO Immelt’s shift in corporate mindset through –Pay Linking bonuses to new ideas, sales growth, with less emphasis on the bottom line –Risk Invest billions in “Imagination Breakthrough” projects to expand GE products and services –Experts Much lower executive turnover rate, bring in more outsiders to provide industry-specific expertise –Portfolio Spent more than $60 billion to bolster GE’s mix of businesses Culture ShockImaginationsShift from PastPortfolio Shuffling

30 Under Immelt’s Leadership, GE evolved into a corporation based on creativity and organic growth Immelt tailored GE’s long-cherished corporate structure to be more conducive to an increasingly global marketplace Imagination Breakthrough’s (IB’s) proposals were a staple of new corporate culture, requiring innovative marketing strategies and product ideas Culture ShockImaginationsShift from PastPortfolio Shuffling HistoryWelchImmeltCultureEVO

31 Project’s receive billions of dollars in funding Each proposal must aim to either take GE into a new line of business, geographic area, or customer base Must provide GE with $100 million in incremental growth Culture ShockImaginationsShift from PastPortfolio Shuffling HistoryWelchImmeltCultureEVO

32 Immelt’s main challenge was to alter the fundamental beliefs of GE’s “number-hitting” culture Promotions no longer must come from within GE, but rather from those who are most adaptive and open to change Recruiting outsiders is a crucial component to Immelt’s innovative corporate culture Managers must be passionate about their respective business division and experts in the detail of the particular industry Culture ShockImaginationsShift from PastPortfolio Shuffling HistoryWelchImmeltCultureEVO

33 This innovative management strategy drew stark contrast to the “Six Sigma” culture of Jack Welsh Intangible areas of creativity, strategy, and customer service were given priority over “making your numbers” Increased investment in high growth markets of biosciences, cable and film entertainment, security, and wind power Focus on research facilities has led to rapid increase in product development Jack WelchJeffery Immelt Culture ShockImaginationsShift from PastPortfolio Shuffling HistoryWelchImmeltCultureEVO

34 Media Content –Acquisition of Universal provides GE with the opportunity to expand in the entertainment industry Biosciences –Investment in Amersham allows GE tap into the markets of diagnostics and personal medicine Security –Fire and Industrial security giant Edwards Systems Water –Ionics and Osmonics water filtration systems Renewable Energy –GE Wind Energy Culture ShockImaginationsShift from PastPortfolio Shuffling HistoryWelchImmeltCultureEVO

35 GE started serving the rail industry in 1918 in North America Dominated the rail industry by the 1990’s with the introduction of the AC4400 series locomotion Introduced the AC6000CW in 1995, dubbed the “super- loco” but failed miserably, selling only 207 of 6,000 units over 5 years The EPA upset the rail market in 1997 when it announced strict emissions improvements to locomotion's by 2005 HistoryWelchImmeltCultureEVO History EVO GLM Hybrid

36 Became an Imagination Breakthrough project in 2003 due to the need to conform to the new regulations Monthly progress reports Official launch date was set at January 1 st, 2005 “Make or break” project for GE Transportation “Paying for the sins of the past” History EVO GLM Hybrid HistoryWelchImmeltCultureEVO

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

38 “Leap of Faith”- committed $100 million in 2003 to build 50 Evolution Locomotives to lease for $1 a year Goal to log 5 million miles in the year Sales reps had positive feedback, but not a single firm order early 2004 Predictions estimated selling only 30 of 600 possible in 2005, sales reps pressured Immelt to drop price but he refused By October 2004, oil prices had nearly doubled, and so did orders for the EVO engines. By the launch date in 2005, 100% of the 600 machine capacity had been sold out By mid-2006, there was a backlog of 1,500 locomotion's on order, increasing GE’s 70% market share and making EVO a poster-child success of IB’s History EVO GLM Hybrid HistoryWelchImmeltCultureEVO

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

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

41 Bartlett, C., Hall, B., Bennett, N. “GE’s Imagination Breakthroughs: The Evo Project”. Harvard Business Review. 25 June 2007 Brady, Diane (2005). “The Immelt Revolution”. Business Week. Retrieved Feb. 17, 2008 from Business Source Premier database. “Chart: GE’s Changing Mix”. Online posting. BusinessWeek. 28 October 1996. “GE’s Changing Mix”. Online posting. BusinessWeek. 28 October 1996. “GE: Our Company: Leadership, History, Culture. Advertising”. Online posting. GE Corporate Website. 6 March 2008. “GE Ecomagination: Home Page”. Online posting. GE Corporate Website. 6 March 2008. “How Jack Welch Runs GE”. Online posting. BusinessWeek. 18 June 1998. “Jack Welch Online Image 1”. Online posting. Business Innovation Insider. 6 March 2008. “Jack Welch Online Image 2”. Online posting. New York Magazine. 6 March 2008. “Jack Welch’s Encore”. Online posting. BusinessWeek. 28 October 1996. Works Cited

42 QUESTIONS??


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