General Electric
Imagination at Work
Miles Cudworth
John Dickmann
Christopher Juhlke
Ben Gaither
Zachary Krause
History Welch Culture Immelt EVO
General Overview How it started Products
• 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)
History Welch Culture Immelt EVO
General Overview How it started Products
• In 1876, Thomas Edison invented one of
the greatest and useful inventions ever;
the incandescent electric lamp.
History Welch Culture Immelt EVO
General Overview How it started Products
• In 1878, Thomas Edison founded the Edison General
Electric Company
• By 1890, Edison had organized his various businesses
into the Edison General Electric Company.
History Welch Culture Immelt EVO
General Overview How it started Products
• 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.
History Welch Culture Immelt EVO
General Overview How it started Products
• 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.
History Welch Culture Immelt EVO
General Overview How it started Products
• Radio Corporation of America • Telemundo
(RCA) • GE Healthcare
• NBC Universal (except NBC Radio) • Transamerica Finance
• Genworth Financial • InVision Technologies
• The Electric Bond and Share Co • Smiths Aerospace
• GE Commercial Finance • Vetco gray
• GE Consumer Finance • SABIC
• Genie • GE Security
• GE Infrastructure • GE Industrial
• GE Money
History Welch Culture Immelt EVO
General Overview How it started Products
• Light bulbs • Jet Engines
• Freezer • Locomotive engines
• Refridgerators • Ventilation systems
• Washers • Water systems
• Dryers • Food compactors &
• Ovens Disposers
• Air conditioners • Cooking foodstuffs
• Humidifiers/dehumidifiers • Ventilation systems
• Plastic bottled dispensers • Turbines
(pop/water)
History Welch Culture Immelt EVO
By the numbers Old Strategy New Strategy After
Jack Welch
• Yearly Shareholder
Return (20-year
period)
23 %
• Increase in Total
Shareholder Wealth:
$380 billion
History Welch Culture Immelt EVO
By the numbers Old Strategy New Strategy After
• 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?
History Welch Culture Immelt EVO
By the numbers Old Strategy New Strategy After
• “Change before you have to”
• Transition from Manufacturing to Services
– Acquisition of RCA’s NBC in 1986
• Eventual expansion of NBC division
History Welch Culture Immelt EVO
By the numbers Old Strategy New Strategy After
History Welch Culture Immelt EVO
By the numbers Old Strategy New Strategy After
• 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
History Welch Culture Immelt EVO
By the numbers Old Strategy New Strategy After
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
History Welch Culture Immelt EVO
By the numbers Old Strategy New Strategy After
• 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
History Welch Culture Immelt EVO
By the numbers Old Strategy New Strategy After
• 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
History Welch Culture Immelt EVO
General Overview Imagination CECOR 4 Commitments
• 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.”
History Welch Culture Immelt EVO
General Overview Imagination CECOR 4 Commitments
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.
History Welch Culture Immelt EVO
General Overview Imagination CECOR 4 Commitments
• 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
History Welch Culture Immelt EVO
General Overview Imagination CECOR 4 Commitments
• “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
History Welch Culture Immelt EVO
General Overview Imagination CECOR 4 Commitments
• Water • Lighting
• ABMet® Technology • Compact Fluorescent Lighting
• Advanced Membrane • Diamond Precise® Lamps
Technology • Homebuilder Program
• Desalination • Halogen HIR™ Lamps
• Homespring Central Water • LEDs — Refrigerated Display
Purifier Lighting
• Permatreat EPP® • LEDs — Signage &
• ZeeWeed® Membrane Architecture
Technology • LEDs — Transportation
Signals
• T8 Linear Fluorescent Lamps
History Welch Culture Immelt EVO
General Overview Imagination CECOR 4 Commitments
• For the Home • Dry Low NOx Combustion System
(DLN 1+)
• Dishwashers with • Boiling Water Reactor
SmartDispense™ Technology
• H System™ Turbine
• Front-Load Washers
• Jenbacher Biogas Engine
• Hot and Cold Water Dispenser
• Jenbacher Coal Mine Gas Engine
• Profile Harmony™ Washers
• Jenbacher Landfill Engine
• Refrigerators with
ClimateKeeper2™ • Kn3 Optimization Software
• LMS100 Gas Turbine
• Photovoltaic Technology
• Energy • Powerwave+™
• BCL304e Series Centrifugal • PulsePleat® Pleated Filter
Compressor Elements
• Cleaner Coal • UltraScan™ Duo
• DLN 2.6+ Combustion System • Wind Turbines
• X$D ULTRA® Motor
History Welch Culture Immelt EVO
General Overview Imagination CECOR 4 Commitments
• 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
History Welch Culture Immelt EVO
General Overview Imagination CECOR 4 Commitments
• Calibrate • Organize
What industry are you in? Is the go-to-market plan aligned with
Who are the customers and what do the value proposition?
they need? Are you prepared to implement?
• Explore • Realize
What are our potential avenues of Will you meet your revenue and
growth? income plans?
Which ones will you target? How will you measure customer and
GE impact?
• Create
What are our best ideas?
What is the customer value?
History Welch Culture Immelt EVO
General Overview Imagination CECOR 4 Commitments
• 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.
History Welch Culture Immelt EVO
General Overview Imagination CECOR 4 Commitments
• 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.
History Welch Culture Immelt EVO
General Overview Imagination CECOR 4 Commitments
• 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.
History Welch Culture Immelt EVO
General Overview Imagination CECOR 4 Commitments
• 4) Keep the public informed.
• GE is keeping the public informed through its
Ecomagination Web site, dozens of global
conferences, and stakeholder events.
History Welch Culture Immelt EVO
Culture Shock Imaginations Shift from Past Portfolio Shuffling
• 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
History Welch Culture Immelt EVO
Culture Shock Imaginations Shift from Past Portfolio Shuffling
• 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
History Welch Culture Immelt EVO
Culture Shock Imaginations Shift from Past Portfolio Shuffling
• 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
History Welch Culture Immelt EVO
Culture Shock Imaginations Shift from Past Portfolio Shuffling
• 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
History Welch Culture Immelt EVO
Culture Shock Imaginations Shift from Past Portfolio Shuffling
• 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 Welch Jeffery Immelt
History Welch Culture Immelt EVO
Culture Shock Imaginations Shift from Past Portfolio Shuffling
• 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
History Welch Culture Immelt EVO
History EVO GLM Hybrid
•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
History Welch Culture Immelt EVO
History EVO GLM Hybrid
•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 1st, 2005
•“Make or break” project for GE Transportation
•“Paying for the sins of the past”
History Welch Culture Immelt EVO
History EVO GLM Hybrid
• 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 Welch Culture Immelt EVO
History EVO GLM Hybrid
•“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 Welch Culture Immelt EVO
History EVO GLM Hybrid
•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 Welch Culture Immelt EVO
History EVO GLM Hybrid
•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
Works Cited
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
<http://www.businessweek.com/1996/44/b34993.html>.
“GE’s Changing Mix”. Online posting. BusinessWeek. 28 October 1996
<http://www.businessweek.com/1996/44/b34993.html>.
“GE: Our Company: Leadership, History, Culture. Advertising”. Online posting. GE Corporate Website.
6 March 2008 <http://www.ge.com/company/index.html>.
“GE Ecomagination: Home Page”. Online posting. GE Corporate Website. 6 March 2008
<http://ge.ecomagination.com/site/index.html>.
“How Jack Welch Runs GE”. Online posting. BusinessWeek. 18 June 1998
<http://www.businessweek.com/1998/23/b3581001.html>.
“Jack Welch Online Image 1”. Online posting. Business Innovation Insider. 6 March 2008
<http://www.businessinnovationinsider.com/Jack%20Welch%202.jpg>.
“Jack Welch Online Image 2”. Online posting. New York Magazine. 6 March 2008
<http://nymag.com/daily/intel/20070123welch.jpg>.
“Jack Welch’s Encore”. Online posting. BusinessWeek. 28 October 1996
<http://www.businessweek.com/1996/44/b34991.html>.
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