GENERAL ELECTRIC THE MOST ADMIRED CORPORATION. Jack Welch, Chief Executive Officer zBecame CEO 18...
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Transcript of GENERAL ELECTRIC THE MOST ADMIRED CORPORATION. Jack Welch, Chief Executive Officer zBecame CEO 18...
GENERAL ELECTRICGENERAL ELECTRIC
THE MOST ADMIRED CORPORATION
Jack Welch, Chief Executive Officer
Became CEO 18 1/2 years ago at age 45Youngest chief in GE’s historyRaised market value to $300 billionBuilds talentEncourages Mergers & AcquisitionsChanges corporate cultureResponds rapidly and creatively to
change
MOTORS & INDUSTRIALMOTORS & INDUSTRIAL
INFORMATION SERVICESINFORMATION SERVICES
MEDICAL SYSTEMSMEDICAL SYSTEMS
PLASTICSPLASTICS
NBC
ELECTRICA L DISTN& CON TROL
POWERSYSTEMS
LIGHTI NGAPPLIANCES
GE CAPITALSERVICES
AIRCRAFTENGINES
TRANSPORTATIONTRANSPORTATIONSYSTEMSSYSTEMS
Why is GE a successful and admired corporation
Jack Welch, CEOOutward thinkingSense of PurposeInformalityWork OutCompetitive
advantage
Reward SystemCandorAgilitySix SigmaChoice of New CEOKnow how to
measure success
GE Thinks Outside Itself
Bureaucracy is focused inward
Designed a culture and reward system to encourage people to look outside the company
Sense of Purpose
Employees have incentive to do well because of stock options
Employees gain personal satisfaction through their work
Plane CrashNew Light-Speed CT
20 Second Body Scans
Pride in Product
Advantages of Informality
People do not take themselves too seriously
The ability to make decisions quickly
People are self-confident enough to have real exchanges of ideas
Work OutWork Out Changing from old to new Series of meeting with employees of all
levels Discussing ideas of change Process of building self confidence
Work OutWork OutTown MeetingsEmployees & SupervisorsExchange of Ideas85% of Issues Resolved Immediately
Organization’s Biggest Organization’s Biggest AdvantageAdvantage
Ability to learnShare that
learningAct on that
learning
Avoid “NIH” Syndrome
Learn EverydayFind a Better
WayLearn from Other
Companies- Toyota
- Wal-Mart
The Reward System
Align the reward system with the values that you want
Arrange the system so that everyone is motivated to do the best job possible
Get everyone to cooperate, help, and share their talent
Reward team work
CANDORBe informalBuild TrustCandor comes naturally
AGILITYAGILITYAgility must be present in your
thinking and in your actionsCompanies strengths must be used Weaknesses have to be reducedA company has to be able to make
changes
Six SigmaSix SigmaManagement policy designed to get
people to do their best
Designed to ensure quality work
People are trained to do their best
Gives employees something to strive for
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
How to determine the company’s success
Are the customers satisfied?
Are the employees satisfied?
How good is your cash flow?
Keys to Success
!Energy!Sense of Purpose!Informality!Work-Out!Value System!Culture
Things to Remember
OAlignment of Values & RewardOCustomer SatisfactionOEmployee SatisfactionOCash FlowOSpeedOSimplicityOSelf-Confidence
GlobalizationNot 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
ServicesInvest in businesses to improve the Performance of installed base and the wayit is actually serviced
Go beyond servicing to reengineer the installed base by using higher technology
Dramatically improve customers’ competitive positions
e-BusinessInternet explosion has brought about anIncredible 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
Six SigmaDisciplined methodology of defining, Measuring, analyzing, improving, & controlling every aspect of the company
Ultimate goal of virtually eliminating allDefects – changed the DNA of GE
The way they work, in everything they doAnd in every product they design
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
. . . 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
•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
•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
GE’s Stellar Performance Record
Summary
The company must have a positive, forward-looking chief executive.
It must look outside itself for ideas and inspiration.
The people must have a sense of purpose.The people should remain informal.The company must be willing and able to
change.
Summary Continued
The employees must be able to work together.
Maintain a competitive advantage.The reward system must be designed
to achieve the company’s goals.The company must be agile.A quality process should drive
everything they do.