PAPER

SUSTAINING INNOVATIVE ORGANIZATION

KNOWLEDGE MANAGEMENT AT GENERAL

ELECTRIC UNDER JEFF IMMELT LEADERSHIP
(2001 - 2017)

Metda Gumelar Sektiyoso 15122310017

Riesti Widianingrum 15122310022

Rr Agnes Josephine Soebagio 15122310025

Rahmawaty 15122310027

Nayoko Hanif 15122310030

Saphira Adyarini 15122310031

Adi Maulana 15122310033

PROGRAM STUDI S2 MANAJEMEN

UNIVERSITAS PRASETIYA MULYA
JAKARTA, 2025
1. BACKGROUND

General Electric (GE) is one of the world's largest multinational companies,

operating in various industries, including energy, healthcare, and aviation. Founded in
1892 by Thomas Edison, GE has grown into a global conglomerate with numerous
technological innovations. The company has a long history of developing industrial and
technological solutions that have become standards across multiple sectors.

When Jeff Immelt took over as GE’s CEO in 2001, he faced numerous significant
challenges. He succeeded Jack Welch, a legendary leader who had built GE into a global
business giant. Immelt began his tenure just days before the 9/11 attacks, which had a
significant impact on the global economy, including GE’s businesses in the aviation and
insurance sectors. Additionally, he had to navigate the 2008 global financial crisis, which
shook many large corporations, including GE.

To address these challenges, Immelt emphasized the importance of innovation,

digital transformation, and knowledge management as key strategies for maintaining GE’s
competitiveness in the global market. He pushed the company towards digitalization,
renewable energy, and technology-based services.

1.1. Brief Biography of Jeff Immelt

Jeffrey Robert Immelt was born on February 19, 1956, in Cincinnati, Ohio, United
States. He earned a Bachelor’s degree in Applied Engineering from Dartmouth College in
1978 and obtained an MBA from Harvard Business School in 1982. Immelt joined GE in
1982 as part of the plastics marketing division and later held various executive positions
in several GE business units, including GE Appliances and GE Healthcare. In 2000, he
was selected to succeed Jack Welch as GE’s CEO and officially took office on September
7, 2001.

1.2. Jeff Immelt’s Achievements as GE’s CEO (2001-2017)

● Digital Transformation and GE Digital

Immelt led GE’s digital transformation by establishing GE Digital in 2015,

focusing on the development of industrial software and Internet of Things (IoT)
platforms. One of the biggest innovations in this initiative was Predix, an
industrial analytics platform that enables real-time data management from
machines and industrial systems.
 ● Diversification and Global Expansion

Under his leadership, GE expanded its operations into various global markets,
especially in developing countries such as China, India, and Brazil. GE
strengthened its presence in the healthcare, oil and gas, and renewable energy
sectors.

● Focus on Innovation and Research & Development (R&D)

Immelt increased GE’s investments in R&D to drive innovation across different

business lines. He initiated the FastWorks program, which adopted Lean
Startup principles to accelerate the development of new products and services.

● Business Restructuring and Sale of GE Capital

One of Immelt’s major decisions was reducing GE’s reliance on financial

services by selling most of GE Capital’s assets after the 2008 financial crisis.
This move aimed to refocus the company on its core industrial and technology
businesses.

● Commitment to Sustainability and Renewable Energy

Immelt launched Ecomagination, an initiative to develop environmentally

friendly and sustainable technologies. GE expanded its investments in
renewable energy, including wind power and natural gas.

1.3. Challenges

Despite many achievements, Immelt also encountered significant challenges

during his tenure:

● Four days after Immelt took over the chairman’s suite, two hijacked airliners
crashed into World Trade Center, setting off occasions that significantly
influence GE’s business environment
● Post-Enron case of criticism over corporate financial reporting also took GE
into rumors of earnings manipulation circulated among the investment
community
● A decline in GE’s stock price, which did not experience significant growth
compared to the Jack Welch era.
 ● Strategic missteps in the energy sector, where GE acquired fossil fuel-based
energy businesses that later faced declining demand.
● Difficulties in the digital transition, as the adoption of new technologies
required significant investments and organizational cultural changes that
were not always smooth.

2. THEORETICAL FRAMEWORK
2.1. SECI Model (Nonaka & Takeuchi, 1995)

The SECI Model, developed by Ikujiro Nonaka and Hirotaka Takeuchi, explains how
organizations manage knowledge through the conversion process between explicit and
tacit knowledge. It consists of four main stages:

● Socialization: Tacit knowledge (experience, skills, intuition) is transferred

through social interactions such as informal discussions, mentoring, or direct
observation.
● Externalization: Tacit knowledge is converted into explicit knowledge through
documentation, reports, or formal communication.
● Combination: Documented explicit knowledge is combined with other
information to generate new insights, often using knowledge management
systems and IT.
● Internalization: Explicit knowledge is reabsorbed by individuals and internalized
into new skills or experiences through training or hands-on practice.

2.2. Learning Organization (Senge, 1990)

This concept emphasizes the importance of continuous learning within an

organization to remain innovative and adaptive. Learning organizations constantly
improve their ability to create, acquire, and transfer knowledge, leading to better decision-
making and sustained competitiveness. Senge (1990) identified five core disciplines that
define a learning organization:

1. Personal Mastery refers to the commitment of individuals within an organization

to continuously develop their skills, competencies, and capabilities. Employees
who pursue personal growth and lifelong learning contribute to a culture of
continuous improvement. Organizations that foster personal mastery provide
training programs, mentorship, and self-development initiatives to encourage
employees to reach their full potential. By investing in individual development,
companies create a workforce that is more skilled, adaptable, and innovative.
 2. Mental Models are the deeply ingrained assumptions, beliefs, and perspectives
that influence how individuals interpret situations and make decisions. To foster
innovation, organizations must challenge outdated or limiting mental models that
hinder progress. Leaders and employees are encouraged to question existing
ways of thinking and remain open to new ideas. This ability to rethink and reshape
perspectives is essential in driving adaptability and continuous improvement.
Companies that embrace this approach can navigate change more effectively and
sustain long-term growth.
3. Shared Vision is crucial for aligning all members of an organization toward a
common goal. A well-defined shared vision ensures that employees understand
and support the company’s long-term objectives, fostering unity and motivation.
Under Jeff Immelt, GE cultivated a shared vision focused on digital transformation
and industrial innovation, guiding strategic decisions and initiatives. This vision
helped GE adapt to market changes and technological advancements, ensuring
that every employee was working toward the same overarching goals.
4. Team Learning involves enhancing collective knowledge through collaboration,
dialogue, and shared experiences. Organizations that promote team learning
encourage open communication, knowledge-sharing practices, and cross-
functional teamwork. When employees actively learn from each other, they create
an environment where new ideas emerge and innovation thrives. By fostering a
culture of continuous learning and cooperation, businesses can improve problem-
solving capabilities and drive efficiency across teams.
5. Systems Thinking allows individuals to see an organization as an interconnected
system where changes in one area affect the entire system. This perspective helps
leaders and employees understand the broader impact of their decisions and avoid
working in silos. GE implemented systems thinking by integrating digital solutions
across different business units, ensuring coherence in its transformation efforts. By
viewing the organization as a whole rather than isolated parts, companies can
make more informed decisions that lead to sustainable success.

3. METHODOLOGY

This study adopts a case study approach with a qualitative research method. Case
study was chosen as it allows for an in-depth analysis of the Knowledge Management
strategies implemented by GE under Jeff Immelt's leadership.

The data used in the research comes from various secondary sources, including:
● GE annual reports: To understand the company’s strategies in managing knowledge
and innovation during Immelt's tenure.
● Jeff Immelt interviews: Analyzing interviews conducted by various media and
academics to identify Immelt’s vision and approach to Knowledge Management.
● Academic articles: Literature reviews related to Knowledge Management, innovation,
and digital transformation implemented by GE.
● Other secondary sources: Including industry reports, business publications, and expert
analyses on corporate strategy.

The research applies thematic analysis, where GE's Knowledge Management

strategies are categorized and examined based on their relevance to the theories
discussed earlier. Furthermore, the study evaluates the impact of these strategies on
company performance using indicators such as business growth, operational efficiency,
and technological innovation.

4. ANALYSIS AND CONCLUSION

4.1. Analysis

Knowledge Management Strategies at GE

1. Digital Industrial Transformation

Under Jeff Immelt’s leadership, GE launched GE Digital and the Predix platform to
enhance data analytics using artificial intelligence (AI) and the Internet of Things
(IoT). This initiative aimed to transform GE from a traditional industrial company
into a digital industrial leader. By leveraging real-time data processing and
predictive analytics, GE improved asset management, optimized operations, and
created smart industrial solutions that enhanced efficiency and reduced downtime.

2. Collaborative Innovation
GE implemented the FastWorks methodology, inspired by Lean Startup principles,
to accelerate innovation and knowledge-based decision-making. FastWorks
encouraged rapid prototyping, iterative development, and close customer
collaboration to reduce risks and shorten product development cycles. This
strategy empowered employees to experiment, learn from failures, and quickly
refine solutions based on real-world feedback, fostering a more agile and
knowledge-driven culture.
 3. Global Knowledge Sharing
To facilitate knowledge exchange across its global operations, GE established
Global Research Centers and promoted cross-divisional collaboration. These
centers served as hubs for scientific research, technological innovation, and best
practice sharing. By integrating expertise from different business units, GE
enhanced problem-solving capabilities and knowledge transfer, ensuring that
insights gained in one sector could be applied across the company’s diverse
industries.

4. Leadership Development
Immelt prioritized leadership development by investing in Crotonville Leadership
Institute, GE’s dedicated corporate training center. This initiative focused on
equipping executives and employees with strategic knowledge, problem-solving
skills, and innovation-driven mindsets. The program combined theoretical learning
with practical case studies, allowing leaders to adapt to changing business
environments and effectively manage knowledge within their teams.

Under Jeff Immelt’s leadership, General Electric (GE) adopted strong knowledge
management strategies, utilizing the SECI Model to foster innovation and sustain its
competitive advantage. The model was integrated into GE’s operations in the following
ways:

Socialization (Tacit to Tacit)

● GE promoted a culture of knowledge sharing through leadership development

programs like the GE Crotonville Learning Center, where employees engaged in
peer learning, mentoring, and direct interactions with experienced leaders. “Session
C” system for tracking managers’ performance, planning their careers, and formulating
succession plans for every management position at GE from department heads
upwards.
● Immelt emphasized boundaryless behavior, encouraging cross-functional and cross-
geographical knowledge exchange through informal discussions and global
collaboration.

Externalization (Tacit to Explicit)

GE used structured processes to document tacit knowledge, particularly through Six
Sigma methodologies, where best practices and problem-solving approaches were
recorded and shared.

● Immelt pushed for a digital transformation, encouraging employees to articulate ideas

through formalized innovation reviews and structured brainstorming sessions.

Combination (Explicit to Explicit)

● GE invested in knowledge management systems (KMS) and digital platforms,

allowing employees to access, integrate, and combine explicit knowledge from
different business units.
● The GE Store concept was introduced to facilitate the sharing of technological
innovations across various divisions, combining existing knowledge to create new
business opportunities.

Internalization (Explicit to Tacit)

● Employees engaged in continuous learning through GE’s training programs and

leadership workshops, applying explicit knowledge to develop skills and expertise.
● Digital industrial transformation, including Predix (GE’s industrial IoT platform),
enabled employees to internalize data-driven decision-making and operational
insights, embedding new knowledge into daily practices.

Gambar 2 . Spiral of organization knowledge Creation

 Sumber : Andreas Seufert, et al 1995

Gambar 3 . Six-part Growth Process

Sumber : Case 22 Jeff Immelt and the New General Electric, Grant (2015)

Knowledge Management System (KMS) in General Electric (GE) under Jeff Immelt

During Jeff Immelt’s leadership (2001–2017), General Electric (GE) implemented a

Knowledge Management System (KMS) to enhance innovation, efficiency, and knowledge
sharing across its diverse business units. GE's KMS was a combination of digital platforms,
structured processes, and organizational culture that facilitated the capture, storage,
distribution, and application of knowledge.

Key Components of GE’s Knowledge Management System

1. GE Crotonville Leadership Institute

○ GE’s corporate university and learning center, where employees and leaders
participated in training programs, mentorship, and strategic discussions.
○ Served as a hub for leadership development and knowledge exchange
among GE’s global workforce.

2. GE Store (Cross-Business Knowledge Sharing)

 ○ A structured framework that allowed different GE businesses (e.g., Aviation,
Healthcare, Energy) to share technologies, expertise, and best practices.
○ Encouraged cross-pollination of innovations, ensuring that knowledge
generated in one unit benefited other divisions.

3. Six Sigma and Digital Knowledge Repositories

○ GE’s Six Sigma initiative standardized problem-solving and quality

improvement, creating a structured repository of best practices.
○ Explicit knowledge was captured in digital databases, reports, and case
studies, which employees could access for decision-making.

4. GE Digital & Predix Platform

○ As part of its Industrial Internet of Things (IIoT) strategy, GE developed

Predix, a cloud-based platform that collected and analyzed data from
industrial assets.
○ The system enabled real-time knowledge sharing, allowing engineers and
business units to apply insights from predictive analytics.

5. Collaboration and Innovation Networks

○ GE Colab: An internal social networking and collaboration platform that

connected employees worldwide to share expertise and ideas.
○ FastWorks: A lean startup-inspired initiative that encouraged rapid learning,
experimentation, and customer-driven innovation.

Challenges in Implementing Knowledge Management

1. Resistance to Change
Despite the push for digital transformation, some business units within GE faced
challenges in adopting new technologies and knowledge-sharing practices.
Employees accustomed to traditional processes were hesitant to embrace
automation, AI-driven analytics, and open collaboration. Overcoming this
resistance required strong leadership, continuous training, and an organizational
culture shift that emphasized the long-term benefits of knowledge management.

2. Organizational Complexity
As a large conglomerate with operations spanning multiple industries, GE
struggled with coordinating and harmonizing Knowledge Management (KM)
practices across its business units. Differences in corporate culture, regulatory
 requirements, and operational structures made it difficult to implement a unified KM
strategy. The challenge was to ensure that knowledge generated in one division
could be effectively disseminated and utilized across the entire organization.

3. Global Economic Impact

The 2008 financial crisis significantly affected GE’s ability to invest in knowledge-
driven innovation. Budget constraints led to reductions in R&D spending, layoffs,
and restructuring efforts, limiting the company’s capacity to sustain KM initiatives.
Despite these economic challenges, GE continued to emphasize digital
transformation and strategic knowledge-sharing, though at a slower pace than
initially envisioned.

4.2. Conclusion

GE’s approach to Knowledge Management under Jeff Immelt was highly strategic,
integrating digital transformation, innovation, and leadership development. However, the
implementation process faced internal and external challenges, including resistance to
change, organizational complexity, and economic downturns. The success of GE’s KM
strategies highlights the importance of adaptability, strong leadership, and continuous
investment in knowledge infrastructure to remain competitive in a rapidly evolving industrial
landscape.

5. RECOMMENDATION AND FEEDBACK

5.1 RECOMMENDATION

During Jeff Immelt's leadership, GE successfully integrated Knowledge Management into

its digital transformation, accelerating innovation and enhancing operational efficiency.
However, internal and external challenges remained obstacles. The implications of this
study indicate that the success of Knowledge Management depends on leadership support,
a culture of knowledge sharing, and the ability to adapt to technological and market
changes.

Optimize Financial Strategy & Risk Management

● GE faced financial challenges due to over-expansion; thus, future leaders should

ensure sustainable investments and strategic divestitures.
● Maintain strong cash flow management to avoid financial strain during transformation
periods.
 5.2 FEEDBACK

During Jeff Immelt’s tenure, GE has a strong knowledge management. During this period,
we also saw how external factors have greatly affected the company's overall performance.
Despite its strength, the knowledge management that GE has doesn’t align with its financial
strategy and doesn’t have a clear market focus for long term viability. GE diversified into
too many areas (e.g., energy, healthcare, digital) without fully consolidating its core
business strengths. The result is that knowledge management loses its effectiveness. The
feedback that we can get from this case is that knowledge management should focus
on strengthening core competencies first before expanding into new territories.
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