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GENERAL ELECTRIC THE MOST ADMIRED CORPORATION. Jack Welch, Chief Executive Officer zBecame CEO 18 1/2 years ago at age 45 zYoungest chief in GE’s history.

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Presentation on theme: "GENERAL ELECTRIC THE MOST ADMIRED CORPORATION. Jack Welch, Chief Executive Officer zBecame CEO 18 1/2 years ago at age 45 zYoungest chief in GE’s history."— Presentation transcript:

1 GENERAL ELECTRIC THE MOST ADMIRED CORPORATION

2 Jack Welch, Chief Executive Officer zBecame CEO 18 1/2 years ago at age 45 zYoungest chief in GE’s history zRaised market value to $300 billion zBuilds talent zEncourages Mergers & Acquisitions zChanges corporate culture zResponds rapidly and creatively to change

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4 Why is GE a successful and admired corporation zJack Welch, CEO zOutward thinking zSense of Purpose zInformality zWork Out zCompetitive advantage z Reward System z Candor z Agility z Six Sigma z Choice of New CEO z Know how to measure success

5 GE Thinks Outside Itself zBureaucracy is focused inward zDesigned a culture and reward system to encourage people to look outside the company

6 Sense of Purpose z Employees have incentive to do well because of stock options z Employees gain personal satisfaction through their work z Plane Crash z New Light-Speed CT y20 Second Body Scans yPride in Product

7 Advantages of Informality zPeople do not take themselves too seriously zThe ability to make decisions quickly zPeople are self-confident enough to have real exchanges of ideas

8 Work Out yChanging from old to new ySeries of meeting with employees of all levels yDiscussing ideas of change yProcess of building self confidence

9 Work Out zTown Meetings zEmployees & Supervisors zExchange of Ideas z85% of Issues Resolved Immediately

10 Organization’s Biggest Advantage zAbility to learn zShare that learning zAct on that learning

11 Avoid “NIH” Syndrome zLearn Everyday zFind a Better Way zLearn from Other Companies - Toyota - Wal-Mart

12 The Reward System zAlign the reward system with the values that you want zArrange the system so that everyone is motivated to do the best job possible zGet everyone to cooperate, help, and share their talent zReward team work

13 CANDOR zBe informal zBuild Trust zCandor comes naturally

14 AGILITY zAgility must be present in your thinking and in your actions zCompanies strengths must be used zWeaknesses have to be reduced zA company has to be able to make changes

15 Six Sigma zManagement policy designed to get people to do their best zDesigned to ensure quality work zPeople are trained to do their best zGives employees something to strive for

16 If you played 100 rounds of golf per year, and played at: 2 sigma - you'd miss 6 putts per round 3 sigma - you'd miss 1 putt per round 4 sigma - you'd miss 1 putt every 9 rounds 5 sigma - you'd miss 1 putt every 2.33 years 6 sigma - you'd miss 1 putt every 163 years! SIX SIGMA IMPROVES YOUR SCORE

17 How to determine the company’s success z Are the customers satisfied? z Are the employees satisfied? z How good is your cash flow?

18 Keys to Success  Energy  Sense of Purpose  Informality  Work-Out  Value System  Culture

19 Things to Remember  Alignment of Values & Reward  Customer Satisfaction  Employee Satisfaction  Cash Flow  Speed  Simplicity  Self-Confidence

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24 Globalization  Not only to grow by selling and servicing the global markets  Globalizing every activity of the company – sourcing of raw materials, components, and products  Attracting the best people from the world

25 Services  Invest in businesses to improve the Performance of installed base and the way it is actually serviced  Go beyond servicing to reengineer the installed base by using higher technology  Dramatically improve customers’ competitive positions

26 e-Business  Internet explosion has brought about an Incredible change in the way things can be done  Rapidly change dealings with vendors, partners, and customers  Represents the greatest opportunity for growth that the company has ever seen

27 Six Sigma  Disciplined methodology of defining, Measuring, analyzing, improving, & controlling every aspect of the company  Ultimate goal of virtually eliminating all Defects – changed the DNA of GE  The way they work, in everything they do And in every product they design

28 Are passionately focused on driving customer success Live Six Sigma Quality... ensure that the customer is always its first beneficiary... and use it to accelerate growth Insist on excellence and are intolerant of bureaucracy Act in a boundaryless fashion...always search for and apply the best ideas regardless of their source GE Leaders...Always with unyielding integrity Prize global intellectual capital and the people that provide it... build diverse teams to maximize it

29 ... the "4-E's" of GE leadership: the personal Energy to welcome and deal with the speed of change... the ability to create an atmosphere that Energizes others... the Edge to make difficult decisions... and the ability to consistently Execute See change for the growth opportunities it brings... i.e., "e-Business" Create a clear, simple, customer-centered vision... and continually renew and refresh its execution Create an environment of "stretch," excitement, informality and trust... reward improvements... and celebrate results

30 Revenues rose 11% to $112 billion, a record. Earnings increased 15% to $10.7 billion, the first time GE has broken the $10 billion mark in earnings from operations. Earnings per share were up 15%. Free cash flow was a strong $11.8 billion, up 17%. Our ongoing operating margin rate grew to 17.8%, a gain of more than a full point from '98 and the third straight year of more than a full point improvement. GE Facts Reported in CEO’s Annual Address in 2000

31 Working capital turns hit an all-time high of 11.5 — an improvement of 2.3 turns. The 80% improvement in this key performance measure over the past three years has added $4 billion to cash flow. GE made 134 acquisitions in 1999, worth almost $17 billion. This marks the Company's third year in a row with over 100 acquisitions, totaling over $51 billion. GE Facts Reported in CEO’s Annual Address in 2000

32 GE’s Stellar Performance Record

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38 Summary zThe company must have a positive, forward-looking chief executive. zIt must look outside itself for ideas and inspiration. zThe people must have a sense of purpose. zThe people should remain informal. zThe company must be willing and able to change.

39 Summary Continued zThe employees must be able to work together. zMaintain a competitive advantage. zThe reward system must be designed to achieve the company’s goals. zThe company must be agile. zA quality process should drive everything they do.


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