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Case Study: General Electric’s Two-Decade Transformation Under the Leadership of Jack Welch

When Jack Welch became CEO of GE in 1981, he set out to reenergize one of America’s largest companies. Through a revision of GE’s mission and values Jack Welch grew GE from a $24+ billion company to into a $74+ billion company, ready to face competitors and future challenges. Welch realigned goals and motivation , forcing managers to stretch to previously unknown limits. Any company not number one or two in their industry was divested or closed and though sometimes perceived to be a destroyer, he restructured GE into one of the world’s most staid corporations.

Jack Welch’s management and motivation approach included three main areas:

• Goal setting and preparing the company on a corporate level for its competitive challenges;
• Empowering employees at all levels of the organization; and
• Communicating his new goals and visions through the entire organization, using such tools as extensive training programs, newly formed teams and 3600 review processes. Different aspects of Jack Welch’s management tactics, in terms of motivating employees to bring about change.

When Welch took over GE, he had a vision of creating an organization where people at all levels could be held responsible for their own work, and in the end make decisions for the betterment of their job. The goal was not to control workers, but instead to liberate them. Welch characterized this as creating a boundaryless organization in which empowered employees were self directed and motivated to effectively reach their goals. When Welch became the CEO of GE he found that the company was still organized the way it had been when GE was founded near the turn of the century. Specifically, it was represented by an overwhelming nine layers of management between the shop floor and the CEO. This bureaucracy lead to an unresponsive, inward focused company whose employees found great difficulty in communicating with one another. In fact, if GE’s massive cost structure was not dramatically restructured, analysts projected that GE would become unprofitable by the end of 1982  Welch addressed this issue by eliminating whole layers of management (see appendix for 1981, 1992 &1993 organizational charts), consolidating overlapping jobs and business units, and forcing employees at every level to take more responsibility for their own work. If something was not absolutely necessary they eliminated it (very much like Xerox did in “Dining at the Quality Restaurant”). They stopped gathering unnecessary financial data and eliminated unnecessary reports. In the past, it had not been unusual for business managers to request daily reports that contained so much detail that the reports often produced a 12-foot high stack of paper. The sheer mass of detailed information made a mastery of the details impossible thereby rendering the information relatively useless.

In the plant equipment operators became responsible for the quality of their own work,  reducing the need for inspectors. In effect, employees were given the ability to eliminate those aspects of their job that were unproductive and thus unnecessary. An important aspect of this has been the Work-Out, which has opened the communication channels necessary to help bring about innovative change (once again very much comparable to the training camps introduced by Xerox in its attempts to reinvent itself).

The Work-Out   has been an empowerment concept greatly favored by Welch. Thousands of GE employees get an opportunity to get together and share their ideas, thoughts and know-how, while building and fostering a more creative and team oriented atmosphere. The Work-Out encourages communication and accountability with the ultimate goal being to drive above average team performance. By providing each team member with the opportunity to contribute his ideas to the decision making process, Jack Welch’s hoped to stimulate individuals to constructively challenge their bosses and promote a more motivated workplace. All Work- Outs included follow-up meetings where previous commitments were discussed and accountability was enforced. Empowerment has been a two-way street. Employees have received the satisfaction of being able to air their concerns, while the company has greatly benefited from insights shared in the Work-Out. Under Jack Welch, GE began to realize that human beings are not machines and that each person has the potential to enhance productivity. Knowing how to use this resource can not only give the company a competitive edge, it can make each employee feel more important in the production process and thus more motivated. Although it is difficult to measure the results of empowerment, GE believes that the success of the company in the future will prove that it was the right decision to make. The key question therefore is to find out how leaders like Welch decide that empowerment is the right strategy and how they in general decide if it is the right strategy to implement at their companies. “Boundaryless behavior” and the elimination of unnecessary communication filters are the key phrases to describe Jack Welch’s attitude towards communication. He encourages input from every employee7, from the factory floor to the executive suite8. To facilitate goal setting and empowerment within GE, Welch needed to establish clear lines of communication in the organization. He realized that employees come to GE with many different experiences and backgrounds. He did not want to take away from the benefit of those various backgrounds, as much as reshape them with GE philosophies. This is not to say that he wanted a workforce of robots. Just the opposite actually, he wants free thinkers. One of his objectives was to motivate people to think outside the box and challenge the status quo. Open communication channels between Welch and his employees have been an important tool in this regard. These channels work in both directions, giving employees the ability to air their concerns and work towards a consensus for action. They also help motivate employees, because once again employees feel that they are directly contributing to the success of the company.

Cultural Change Processes

GE’s Work-Out process was created in 1988 as part of the ongoing drive for better productivity and efficiency. Initially, Work-Out was intended to identify and eliminate unneeded processes and tasks that were left over from previous years, when management had more layers. After restructuring, many groups did more work with fewer people, rather than making comprehensive operational changes. The aptly named Work-Out process involves identifying an area in need of improvement and bringing people together from all sides of the process (design, marketing, production, sales, etc.) to identify a better method. The Work-Out team meets outside of its normal work environment to discuss the issues and develop recommendations. Team recommendations are presented to the responsible managers, who must accept or reject proposals on the spot. Ideas that require further study are reviewed for a period of time agreed on by the team (usually less than a month) before a final decision is made. The process encourages responsive leadership and greater employee participation, which increases the rate of change throughout the organization. When Work-Out began, groups initially attacked the obvious things that didn’t made sense in the new GE, known as “low-hanging fruit”. As Work-Out evolved, customers and supplier-partners were introduced to the process. The Work-Out process is now part of everyday life at GE. In General Electric Jack Welch was   the OD practitioner. He brought so many changes like:

• Merger & acquisition – Jack Welch made more than 200 merger & acquisition.his first   acquisition with Hungary lighting in 1989.Later on they merge.the reason behind the success of merger & acquisition was its integration model.There was some policy which was followed by GE before making any acquisition.These acquisition accelerate the future of GE.
• Delayering – When Welch assumed the position of CEO, he saw the extent of GE’s vast bureaucracy. There were more than 500 senior managers, more than 100 vice presidents, andsome 25,000 managers. There were strategic planners who hired vice presidents, and vice presidents who hired strategic planners. Removing entire layers of managementwas a defining aspect of Welch’s hardware revolution. Not only did he eliminate layers of management, he also dis-mantled the walls that had separated key functions (for example,marketing and manufacturing) within the company.
• E-initiative – Welch used to refer to GE’s Internet initiative. As part of GE’s e-Initiative,Welch recommended that every process be digitized. The GE CEO sees this as yet another important step in making the company faster and more agile. In 2000, digitization helped the company sell more than $8 billion of products and services via the Internet.Welch calculates that GE’s digitization of its processes will save the company in excess of $1.5 billion in operating margin in 2001 . GE calculates that e-Business will save over $1 billion in operating margin in 2001 and have $1.5 billion in cost savings. Welch also predicts that in 2001 GE will buy about $12 billionin materials over the Internet and rack up online sales of about $20 billion. He now calls the Internet “the thing of the future” and sees it as a productivity tool to “make the old young and the slow fast.” E-Business has Welch talking speed again, and he is throwing himself into this, his final major company-wide initiative, with the same fervor as his other three crusades.
• Globalization – Welch understood that unless the company moved onto the world stage, it would not become a global competitor. Starting in the mid- to late 1980s, GE launched a three phase revolution that ensured the company’s place in world markets . Welch’s first key growth initiative, globalization played an important role in helping GE grow at double digit rates throughout his tenure. Today globalization is an indelible part of the GE fabric. So much so that the company says it is “less an ‘initiative’ and more a reflex.” That brand of thinking represents a vast departure from where GE was only two decades ago.Before CEO Welch took the reins, GE derived only 20 percent of its revenues from non-U.S. markets. In 2001 more than 40 percent of GE’s sales will come from outside the United States.

GE Six Sigma Quality Coach: An Internet-based mentoring program (or Web-based performance support system)that helps train GE personnel on the quality initiative.This is an important tool in helping GE achieve Six Sigma quality . It was developed after GE performed 55,000 Six Sigma projects involving 4000 quality leaders, and consists of more than 50 tools used in implementing the steps of Six Sigma.

The Product Services initiative. Welch knew that GE’s manufacturing business would take the company only so far,as the market for huge-ticket items like jet engines was limited.In 1995,Welch made product services a top priority, helping to double GE’s product service business to $17 billion by 2000.

Work-Out: Welch’s second major company wide initiative (after Globalization) turned hierarchy on its head. Of the five company wide initiatives,Work-Out was Welch’s only cultural initiative and the one most responsible for changing attitudes and behaviors within GE.Work-Out ensured that managers listened to workers, giving employees a voice in decision making.Welch credited Work-Out with establishing the boundary-less culture that helped create GE’s “learning engine.”Work-Out was a seminal program that helped to bring an end to the type of scientific management methods that had ruled GE and other large companies for decades.Welch said that “Work-Out was nothing more complicated than bringing people of all ranks and functions–managers, secretaries,engineers, line workers, and sometimes customers and suppliers–together in a room to focus on a problem … and then act rapidly and decisively on the best ideas developed, regardless their source.”

Barriers during the changes

Anything that hampered performance or open communication was to be torn down.Welch’s initiatives were designed to erase the barriers that proliferate in large organizations: horizontal barriers, vertical barriers, and external barriers.Welch urged employees to “blow up” bureaucracy and knock down every boundary.Much of what he did in the 1980s, from delayering to Work-Out, was explicitly designed to remove debilitating barriers.Welch was fiercely committed to removing any speed bump that slowed the company down. His strategy of boundarylessness was specifically designed to remove the boundaries that separated GE workers from new ideas, customers, and each other.

There are two type of barriers.one is horizontal barrier & vertical barriers.

• Horizontal barriers: These are the debilitating boundaries that isolate separate groups within the company, such as sales and manufacturing. Horizontal barriers also refers to geographic walls that exist, such as between Seoul and Sidney. With programs like Work-Out and Globalization,Welch tore down these unnecessary barriers.
• Vertical barriers:: Barriers had no place in Welch’s boundaryless organization.Vertical barriers are those layers that added bureaucracy and put more distance between executives and employees.When Welch became CEO, there were nearly a dozen layers between CEO and the factory floor. He delayered, chopping the wedding cake hierarchy down to only four or five layers.

Re-shaping GE for the Future

While others are worrying about the next quarter, Jeff Immelt is planning years of explosive growth. He’s trying to recast GE for decades to come, spending big bucks to create the new infrastructure of innovation, beefing up GE’s global research facilities, overhauling the GE research center in Niskayuna, NY, investing in new, cutting-edge R&D centers in Bangalore, India, Shanghai, China and Munich, Germany.

The simple fact is that most of GE’s growth will come from outside the US. Jeff Immelt predicts that developing countries will account for 60% of the company’s growth in the next 10 years, vs. about 20% for the past decade.

To Jeff Immelt, the best managers are great marketers and not just great operators. Marketing is not just a matter of producing better commercials or catchy slogans – it means getting outside the company to understand markets and customers. Managers must look to lead industries rather than merely follow demand. And they must be leaders who are experts in their business and intensely passionate about what they’re doing.

Jack Welch’s attitude towards management boils down to a few very simple ideas: breaking down hierarchies, ensuring free information flows throughout the organization, and encouraging people to talk, listen and be open to new ideas. When he first became a GE vice president at the age of 36, he “stalked out on the plant floor, or picked up the telephone to deal directly with anyone at any level when a problem came up” and that is the organization Jack Welch has attempted to build in terms of communication. Welch succeeded in transforming a complacent behemoth into an energized company ready to face world competition. By flattening the organization and by removing unnecessary layers of bureaucracy, he liberated employees and empowered them to make decisions and effect their jobs, as well as the company as a whole. At the same time, he relied on stretch goals and the slope of satisfaction (as previously discussed) to further push the company to new levels of achievement. An additional sense of empowerment was relayed through various communication, training and motivation mediums, such as the “Work-Out”, “the Pit”, “the Corporate Executive Council” and other special project teams. Foremost he underlined his words with accompanying actions and an exemplary attitude, avoiding the well known saying that words by themselves are empty. Through the use of 360- degree review processes , appropriate bonus schemes and structural organizational changes , Welch created and opened communication channels at GE, allowing for unprecedented networking, teamwork, and openness to take place at GE. All of these factors combined to form a motivating force for the employees of GE. This motivation in turn has lead to a decade of outstanding performance by Jack Welch and General Electric Corporation.

External Links:

• Jack Welch  (Reference For Business)
• Management Strategies From A Top CEO  (Investopedia)

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hi. can you answer this question for me? explain the barriers during the change in GE? what do you see as the most important barrier to employee empowerment? thanks.

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Data and Analytics Case Study

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GE’s Big Bet on Data and Analytics

Seeking opportunities in the internet of things, ge expands into industrial analytics., february 18, 2016, by: laura winig.

If software experts truly knew what Jeff Immelt and GE Digital were doing, there’s no other software company on the planet where they would rather be. –Bill Ruh, CEO of GE Digital and CDO for GE

In September 2015, multinational conglomerate General Electric (GE) launched an ad campaign featuring a recent college graduate, Owen, excitedly breaking the news to his parents and friends that he has just landed a computer programming job — with GE. Owen tries to tell them that he will be writing code to help machines communicate, but they’re puzzled; after all, GE isn’t exactly known for its software. In one ad, his friends feign excitement, while in another, his father implies Owen may not be macho enough to work at the storied industrial manufacturing company.

Owen's Hammer

Ge's ad campaign aimed at millennials emphasizes its new digital direction..

The campaign was designed to recruit Millennials to join GE as Industrial Internet developers and remind them — using GE’s new watchwords, “The digital company. That’s also an industrial company.” — of GE’s massive digital transformation effort. GE has bet big on the Industrial Internet — the convergence of industrial machines, data, and the Internet (also referred to as the Internet of Things) — committing $1 billion to put sensors on gas turbines, jet engines, and other machines; connect them to the cloud; and analyze the resulting flow of data to identify ways to improve machine productivity and reliability. “GE has made significant investment in the Industrial Internet,” says Matthias Heilmann, Chief Digital Officer of GE Oil & Gas Digital Solutions. “It signals this is real, this is our future.”

While many software companies like SAP, Oracle, and Microsoft have traditionally been focused on providing technology for the back office, GE is leading the development of a new breed of operational technology (OT) that literally sits on top of industrial machinery.

About the Author

Laura Winig is a contributing editor to MIT Sloan Management Review .

1. Predix is a trademark of General Electric Company.

2. M. LaWell, “Building the Industrial Internet With GE,” IndustryWeek, October 5, 2015.

3. D. Floyer, “Defining and Sizing the Industrial Internet,” June 27, 2013, http://wikibon.org.

i. S. Higginbotham, “BP Teams Up With GE to Make Its Oil Wells Smart,” Fortune, July 8, 2015.

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General Electric Change Management Case Study

General Electric (GE) is a multinational conglomerate that has undergone significant change management in recent years. 

Facing financial decline and a need for cultural transformation, GE has implemented a number of strategies to revitalize the company. 

This case study examines the change management efforts of GE, including the challenges faced, strategies implemented, and the resulting impact. 

By examining the success of GE’s change management, we can gain valuable insights into the importance of leadership, cultural transformation, and ongoing evaluation in managing change within an organization.

Brief Background on General Electric 

General Electric (GE) is a multinational conglomerate that was founded in 1892 by Thomas Edison. 

Originally focused on electrical power and lighting, GE has expanded over the years to become a leader in a variety of industries including aviation, healthcare, renewable energy, and more. 

With over 200,000 employees worldwide, GE has a significant impact on the global economy. 

However, in recent years, the company has faced a number of challenges including financial decline and a need for cultural transformation. 

These challenges have required significant change management efforts to revitalize the company and ensure its continued success.

Challenges faced by General Electric 

There are 03 major challenges faced by General Electric that pushed it to implement changes at organization level. 

1. Deteriorating financial performance 

One of the major challenges faced by General Electric was deteriorating financial performance. After years of success, the company began to experience declining revenues and profits in the late 2010s. 

This was due in part to a decline in demand for some of GE’s products, as well as increased competition in certain markets. In addition, GE faced significant debt and liquidity challenges, which further impacted its financial performance. 

These challenges necessitated significant changes in the company’s operations, including a focus on simplification and operational excellence, as well as divestitures of non-core businesses to improve cash flow. 

2. Need for cultural shift 

General Electric also faced a need for cultural shift. For many years, GE had a reputation for being a highly centralized and hierarchical organization, with a focus on efficiency and control. 

However, as the business landscape changed, GE recognized the need to shift its culture to be more innovative, agile, and customer-centric. 

This required a shift away from a “command and control” culture, towards one that valued collaboration, risk-taking, and continuous improvement. 

3. Leadership succession issues 

Another challenge faced by General Electric was leadership succession issues. GE had a long-standing tradition of grooming internal candidates for leadership positions, and had a history of successful CEO transitions. 

However, in the early 2010s, the company faced a number of high-profile leadership challenges, including the resignation of CEO Jeff Immelt in 2017, and the subsequent replacement of his successor, John Flannery, after just 14 months on the job. 

These leadership challenges created uncertainty and instability within the organization, and highlighted the need for better succession planning and talent development. 

Change management strategies implemented

Following are the key change management strategies implemented by General Electric to address the challenges it faced:

1. Reorganization of its business units

To address the financial challenges faced by the company, GE undertook a significant restructuring effort, which included the consolidation and divestiture of a number of non-core businesses. 

This allowed the company to focus on its core competencies and improve its overall operational efficiency. Specifically, GE reorganized its business units into three core segments: Aviation, Power, and Renewable Energy. 

Each segment was given more autonomy and responsibility for its own operations, which allowed for greater agility and innovation within the organization. 

The reorganization also included the sale of GE’s transportation, lighting, and healthcare businesses, which generated significant cash flow and allowed the company to focus on its core competencies.

2. Focus on simplification and operational excellence

GE recognized the need to streamline its operations and improve its overall efficiency. This required a focus on simplification and standardization, as well as a commitment to operational excellence across all areas of the organization. 

To achieve this, GE implemented a number of initiatives, including the use of lean principles, the adoption of digital technologies, and the development of new processes and procedures. 

These efforts allowed the company to reduce costs, improve quality, and enhance its overall competitiveness in the market. 

3. Cultural transformation through leadership development programs

To address the need for a cultural shift towards innovation, agility, and customer-centricity, GE recognized the importance of developing its leaders to embody these values. 

This required a focus on leadership development, which included the implementation of new leadership development programs, as well as the enhancement of existing programs. 

These efforts focused on developing leaders who were able to drive innovation, foster collaboration, and embrace risk-taking. In addition, GE also implemented a number of diversity and inclusion initiatives to foster a more inclusive and supportive culture. 

4. Succession planning and talent development

To address the leadership succession issues faced by the company, GE recognized the need to enhance its talent development efforts and improve its succession planning processes. 

This required a focus on identifying and developing high-potential employees, as well as enhancing the company’s recruitment and retention strategies. 

To achieve this, GE implemented a number of initiatives, including talent development programs, career development plans, and leadership development opportunities. These efforts allowed the company to develop a pipeline of talent to fill key leadership positions, and to ensure continuity in the company’s leadership over the long term.

Results and Impact of change 

The change management strategies implemented by General Electric had a significant impact on the organization, resulting in improved financial performance, employee engagement and culture, and reputation and stakeholder confidence.

Firstly, the reorganization of business units allowed the company to focus on its core competencies, leading to improved financial performance. This was evident in the company’s financial results, with GE reporting stronger earnings and cash flows following the implementation of the reorganization.

Secondly, the focus on simplification and operational excellence allowed GE to streamline its operations and reduce costs, which in turn led to greater employee engagement and culture. By enhancing its operational efficiency, GE was able to create a more collaborative and innovative work environment, which resulted in greater employee satisfaction and engagement.

Finally, the cultural transformation through leadership development programs and succession planning and talent development efforts enhanced GE’s reputation and stakeholder confidence. By building a stronger leadership bench and fostering a more innovative and customer-centric culture, GE was able to enhance its reputation as a leading industrial company and rebuild stakeholder confidence.

Final Words 

General Electric’s journey through change management provides a valuable case study for organizations facing similar challenges. The company’s successful implementation of change initiatives can be attributed to several key factors, including a clear vision and strategy, effective communication, and strong leadership support.

Through the reorganization of business units, a focus on simplification and operational excellence, and a cultural transformation through leadership development and talent management initiatives, GE was able to transform its business, enhance its capabilities, and rebuild its reputation and stakeholder confidence.

Furthermore, the role of leadership in driving and supporting the change effort cannot be overstated. The leadership team at GE played a critical role in setting the direction and vision for the company, communicating the need for change, and ensuring that the organization was aligned and committed to the change effort.

About The Author

Tahir Abbas

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Case 20 Restructuring General Electric *

The appointment of Larry Culp as the chairman and CEO of the General Electric Company (GE) on October 1st, 2018 was a clear indication of the seriousness of the problems that had engulfed the company. Culp, the former CEO of the highly‐successful conglomerate, Danaher Corporation, had been appointed a GE director only six months previously and was the first outsider to lead GE—every one of GE’s previous CEOs had been a career manager at the company. On the same day as Culp’s appointment, GE abandoned its earning guidance for the year and announced a $23 billion accounting charge arising from a write‐down of goodwill at its troubled electrical power division. 1

Culp’s predecessor, John Flannery had been CEO for a mere 14 months—a sharp contrast to GE’s two previous CEOs: Jeff Immelt (16 years) and Jack Welch (20 years). Flannery’s tenure at GE has coincided with of the company’s most difficult periods in its entire 126‐year history. In November 2017, amidst deteriorating financial performance, Flannery announced a halving of GE's quarterly dividend, the proposed sale of its lighting and locomotive units—two of GE's oldest businesses—and the elimination of 12,000 jobs in the power division.

In 2018, the situation worsened. In January, GE announced that it would be paying $15 bn. to cover liabilities at insurance companies it had sold 12 years previously. In February, GE confirmed suspicions over its dubious accounting practices by restating ...

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Jack Welch’s Approach to Leadership

• Claudio Fernández-Aráoz

A look at the GE CEO’s legacy.

The late Jack Welch CEO of General Electric from 1981 to 2001, probably isn’t the ideal model for 21st-century executives. However, three aspects of his leadership remain relevant today. First, get people decisions right. Welch was passionate about putting the right people in the right roles. Second, speak with candor. He always asked probing questions and delivered frank feedback. Third, be insatiably curious. Welch always had a hunger to learn. These are principles that can work for today’s managers as well as they did for him.

Jack Welch was heralded by many as the greatest leader of his era. As CEO of General Electric from 1981 to 2001, he transformed it from a company known for appliances and lightbulbs to a multinational corporation that stretched into financial services and media as well as industrial products. He was initially criticized for cost-cutting and layoffs, which earned him the moniker “Neutron Jack,” but as GE’s revenues expanded and its share price soared in the ensuing years, he was lauded. In recent years, many have questioned his strategy, leadership style, and legacy. Was he too hard-nosed? Did his relentless push for growth, particularly at GE Capital, sow the seeds for the broader company’s later struggles? Was he really a CEO that others should emulate?

• Claudio Fernández-Aráoz  is an advisor on Talent and Family Businesses, a frequent lecturer at Harvard Business School, and the author of  It’s Not the How or the What but the Who .

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Digital Transformation at GE: What Went Wrong?

By: Robert D. Austin, Genevieve Pelow

As recently as 2017, General Electric (GE) had been touted as an example of how established companies could pre-emptively transform their businesses digitally, without waiting to be forced to do so…

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• Publication Date: Sep 13, 2019
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As recently as 2017, General Electric (GE) had been touted as an example of how established companies could pre-emptively transform their businesses digitally, without waiting to be forced to do so by their competition. But in 2018, the wheels appeared to fall off GE's transformation, amid a crisis that included leadership changes, dividend cuts, credit downgrades, and a stock price crash. The company announced that it would sell GE Digital, the newly built-up organization at the heart of its celebrated transformation. This case examines the digital transformation that GE had been attempting and the challenges it encountered. Students will develop ideas about what happened and what GE's experience means for digital transformation initiatives within other established firms.

Learning Objectives

This case is suitable for a graduate-level course on information technology management, innovation, and business strategy. After working through the case, students will understand why established companies might attempt digital transformation; what outcomes firms aim to achieve through digital transformation; and the difficulties and risks inherent in such ambitious change programs.

Sep 13, 2019

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Case Study: How General Electric Saved 80% in Development Costs

Think your organisation is too big, bureaucratic and over-regulated to apply lean startup ?

Think again.

Introducing the General Electric Case Study:

General Electric , with its $493B in assets and 200,000 employees worldwide, is doing exactly that. And it’s exactly this kind of progressive thinking, entrenched in GE’s DNA, that sees the company enter its 125th year in a commanding position, ranking eighth in the 2015 Fortune 500 list .

With one third of listed companies facing de-listing in the next five years , it’s no wonder that GE is looking to change the way it thinks, makes decisions and delivers outcomes, in order to keep up with the rapid pace of change disrupting every industry.

GE is fast becoming a model of how to implement lean startup in a large organisation.

Eric Ries, author of the Lean Startup , a new solution development methodology that has radically transformed the way startups get products to market, approached GE with a simple question, after introducing a group of stakeholders to the philosophy that was rooted in software development.

“Is this something you can use to make things like turbines and jet engines, as well?”

Rather than simply shoot down Eric’s question, GE got testing. They put together several new product introduction (NPI) teams at Crotonville, the company’s leadership institute. Eric was brought in and taught the teams how to apply the methodology.

When asked whether this was something that was applicable to their respective businesses, the resounding response was “yes”.

As soon as team members returned to their respective business units, their ideas and new ways of working were quickly squashed. They realised that applying lean startup would not only require training but a cultural shift in the organisation.

GE promptly created its Fastworks program - geared towards the successful adoption and use of lean startup philosophy across GE.

Step one? Get senior leaders, “the top 5,000”, trained and educated in lean startup. This formed part of a roadshow that Fastworks’ co-founders and partners Viv Goldstein (Business Innovation) and Janice Semper (Human Resources) embarked upon, together with Eric Ries and David Kidder (author of The Startup Playbook ). You’ll note that the partners together represent methodology and culture, not just one or the other.

The Fastworks team spent 2 days with senior leaders teaching them all about lean startup and this was not without its challenges. Many senior leaders have spent years at GE and most grew up with Six Sigma and as such were process driven, perfectionist and anti-variation. The lean startup sessions were as much as about challenging them to think in a different way as much as they were about lean startup methodology.

Getting Buy-In from Senior Management

Because of the structural hierarchy of GE, getting senior stakeholder buy in was critical to the success of the program. Getting support at purely a grassroots level wouldn’t be enough to get traction.

However, recognising the benefits that grassroots employees could bring by way of testing projects and gathering proof points, they could take these validated learnings as ‘money in the bank’, so to speak, and say “here is the impact, here is the evidence” to obtain real and ongoing support from senior stakeholders.

They quickly realised that Eric Ries is just one person and that they needed to bring the expertise in-house. As such, GE created a community of coaches and trained them to build the expertise internally.

Was there a specific plan to train ‘X’ amount of teams and coaches? No, GE essentially applied the lean startup principles to its rollout of this program.

“Let’s start small, learn and build it up from there” says Semper.

GE’s different businesses own Fastworks, as opposed to it being a top down corporate initiative, which supports buy in. They are given a framework but are allowed to determine how many coaches, who becomes a coach, whether it’s a part time or full-time role and so on.

“Here’s the framework - it’s up to you how you want to own it.”

While this was initially uncomfortable for a lot of people because it requires judgment, it also gives them ownership, critical to buy-in.

They’ve found that both part time and full time coaches can work in varying degrees.

What about non-tech companies?

“This absolutely works outside of technology and software and GE is a great proof point for that”, having applied the philosophy in areas such as transportation, energy and finance.

It’s not just about training people “What we learned at Crotonville early on is that as soon as people went back to their business they struggled to use the methodology”, says Semper. “You need to think more broadly about your organisation and the ability to make sure that behaviours and culture can support the application of a lean startup approach.”

Questions to ask:

• will lean startup behaviours be permissible and rewarded?
• does performance management support lean startup?
• what are your expectations of your leaders in supporting lean startup?
• what competencies do you need to develop ?
• like health and fitness, a holistic approach is required to successfully implement lean startup - a personal trainer is pointless if your house is full of high carb, sugary temptations

Everything must be aligned with this way of working

At GE, limiting characteristics that embody the values of its people are failure not being an option, an addiction to being right and a lack of customer-centricity and empathy when developing new products. Why engage customers when you have all the answers right?

Semper zeroed in on these cultural challenges and started to attack them by creating a new belief system that aligned with the Fastworks and lean startup principles.

This belief system was summarised by the following:

• empower and inspire each other
• customers determine our success
• stay lean to go fast
• learn and adapt to win
• deliver results in an uncertain world

This was supported by senior management projecting to their people that “this is what we believe”.

New beliefs underpin new behaviours and these new behaviours are critical to the success of lean startup in a large organisation.

Performance management system was out of synch

GE’s performance management system was representative of your standard run of the mill linear system. The type where goals are set and reviewed once a year. In order to support the very experimentation and adaptability that lean startup advocates, the performance system had to also embody these values. GE is currently moving towards a more adaptable system where ongoing management is stressed over once a year check-ins.

Still, there are challenges as one would expect of a company the size and scale of GE - 200,000 diverse employees across 175 countries.

But the results speak for themselves...

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Transport: Using lean startup, GE developed and commercialised a new engine based on regulatory changes brought on by the EPA. It got to market 2 years before its competition not only resulting in significant cost savings, but bettering the EPA’s requirements. This positioned them extremely well with customers, gave them first mover advantage.

Energy: GE developed a gas turbine which enabled it to deliver the most efficient, low cost energy solution it could to customers and it decreased development costs by 60% by doing so!

In its Industrial business GE:

• reduced time of NPI by two thirds
• reduced time to customer validation by 80%

The latter not only represents a significant cost saving but also frees up NPI funds to reinvest into new ventures, rather than over-invest building the wrong thing and scrambling to find budget for new projects. This snowball effect enables GE to explore a much higher number of new innovations and products in a much shorter time-frame with much lower expense.

Positive Impact on Employee Morale

In a time when customer churn can cost organisations more than $50,000 per person , improving employee engagement and therefore retention is also top of the agenda for most HR managers. Implementing lean startup means that employees are engaged on projects that are delivered quicker and actually realise benefits. This is light years away from traditional, waterfall based ‘transformational’ projects.

Funding Process

The Fastworks process has been embedded into operations.

If an employee has an idea they add it to a growth board and seek seed funding to validate their idea. If validated, then the employee qualifies for additional funding. If invalidated, then things simply stop (stopping anything at GE is also something that was counter-cultural before lean startup reared its head). Now, if a customer says that a new product or feature wouldn’t create value for them, the project isn’t pursued. Makes sense, in retrospect.

On Regulation

I often hear leaders from regulated organisations say that “it’s impossible for us to implement lean startup - it’s too risky, we’re so regulated.”

The fact is that lean startup is a de-risker.

The cost to go to market with a regulated product is higher than normal, given the compliance requirements and checks that need to take place.

“Using lean startup allows us to mitigate risk before putting things to market - it is a risk mitigant that applies across our healthcare, transportation, finance businesses (and so on)”.

By testing quickly, we are taking lots of small bets rather than few large ones and only going to the regulator with products that we know our customers have an appetite for.

Australian health insurer Medibank tested appetite for its Gym Better product by sending employees out to a busy shopping strip in plain clothes with iPads trying to sell a fictional product under the guise of a fictional company to passerbyers and gym goers, purely to gauge customer interest. If somebody wanted to buy on the spot they were simply reminded that “sorry, this doesn’t actually exist but thanks for your cooperation - here’s two movie tickets!”

This approach cost much less than jumping through regulatory hoops and putting a product to market that there is not enough appetite for.

“Look at the level of disruption that’s happening in our industry. It’s unprecedented and it’s happening today. If we don’t change we run the risk of becoming obsolete in less than a decade.” This is the reality that’s communicated to influencers at GE to inspire their jumping on board the good ship lean startup.

We make it clear that “this is not an initiative, this is a fundamental way we are changing how we make decisions, how we work together, how we align with customers, how we hold eachother accountable”, says Semper.

On Collaboration

Remote teams are a nature of the beast that is GE.

The company created a Fastworks site within GE where methodology, proof points, stories, tools and coaching resources are available. Digital training is also being rolled out to move this way of thinking beyond just project team.s.

On Startups

On startup culture, Semper says that GE has learned two fundamental things:

• Startups are extremely purpose driven and have a strong connection to the company
• Dedicated co-located teams achieve amazing things

She has been exploring ways to replicate these startup traits within GE.

The underlying message is clear - if an organisation the size of GE can implement lean startup, then chances that your organisation can too .

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General Electric Case Study Solution

History of general electric:.

General Electric Company operates as an infrastructure and financial services company worldwide. The company Power and Water segment offers gas, steam and aero derivative turbines, generators, combined cycle systems, controls, and related services; wind turbines and solar technology; and water treatment services and equipment. It’s Oil and Gas segment provides surface and subsea drilling and production systems, equipment for floating production platforms, compressors, turbines, turbo expanders, reactors, industrial power generation, and auxiliary equipment. The company’s Energy Management segments offers electrical distribution and control products, lighting and power panels, switchgears, and circuit breakers; engineering, inspection, mechanical, and emergency services; motors, drives, and control technologies; and plant automation, hardware, software, and embedded computing systems. Its Aviation segment offers jet engines, turboprop and turbo shaft engines, related replacement parts, and aerospace systems and equipment for military and commercial aircrafts; and maintenance, component repair, and overhaul services. The company’s Healthcare segment provides medical imaging and information technologies, medical diagnostics, and patient monitoring systems; and disease research, drug discovery, and remote diagnostic and repair services. Its Transportation segment offers freight and passenger locomotives, diesel engines for rail, marine and stationary power applications; railway signaling and communications systems; underground mining equipment; motorized drive systems; energy storage systems; and information technology solutions. Its Home and Business Solutions segment manufactures home appliances and lighting products. Its GE Capital segment offers commercial loans and leases, fleet management, financial programs, home loans, credit cards, personal loans, and other financial services. The company was founded in 1892 and is headquartered in Fairfield, Connecticut.

From Inspiration to Industry (1878 to 1904):

From the invention of the first practical incandescent light bulb to building America’s first Central Power Station, the GE tradition of life-changing innovations was underway. With power and light, GE provided the basis of modern life, quickly redefining everything from the length of the day to our knowledge of the human body through the development of the first X-ray machine

Historic Advancements (1905 t0 1980):

GE made history with the first voice radio broadcast, changing forever the speed of shared information. Meanwhile, GE’s spirit of invention produced the first of many modern conveniences with the first electric toaster and the first Hotpoint electric range. At the same time, work on vacuum tubes enabled the beginning of electronics, while work on resins brought us plastics in a wide variety of new forms.

Reaching New Heights:

Helping mankind expand its horizons, a plane equipped with a GE supercharger set a new altitude record of 40,800 feet. Back on the ground, GE built the world’s largest electrical installation at the Panama Canal, vastly improving shipping times. In the home, many daily foods were given a new lease on life with GE’s latest addition to the long line of household conveniences: the refrigerator.

A Decade of Firsts:

A number of GE innovations helped us see our world differently, from the first fluorescent lamp and “invisible glass” to the first television network, and radar which let us “see” twenty miles away, even at night! More GE firsts in aviation brought us the first U.S. turboprop, autopilot, and the first U.S. jet engine, while Howard Hughes set the record for transcontinental flight with an engine powered by GE.

Tapping Emerging Markets (up to 2000):

One hundred years after it began, GE extended its reach into new markets, online and around the world. In 1999, GE generated over $2 billion in electronic sales alone. India, home of many of the world’s brightest technologists, provided the site for a new GE Global Research Center. Meanwhile, the world of medicine saw radical changes thanks to new GE technologies in imaging and diagnostics.

Recent Developments (up to now):

The always inventive minds at GE continue to make discoveries with an ever greater variety of subjects and substances. For example GE scientists have used light, energy, and other resources to develop everything from the ideal carbon nanotube to information tools like holographic data storage, and new organic LEDs with a wide variety of applications.

Questions Answers:

Q.1 what is the condition of the firm in the last 12 months..

The firm in the last 12 months was in a good position here are some basic values which I have read out in the last period.

Creation of the web portal:

In the last days there was a web portal was invented that was working for searching out the opportunities for the business. It was handled by the managers to know about the current situations of the business. It was all about the findings about the policies and the environment of the business.

Hr activities:

As there are increase in number of employees so there ware activities of the HR system too.

Shares Outstanding:

It was also increase from the last year so there was some shares which was not paid or may be the

Some other changes:

• Company has borrow some more by selling stock.
• There was lot of others things also happens here are they,
• Company has defines different types of the managers
• It sales has increase so it has create more market share.
• It has crate more dividends so it means it is in good financial situation.
• It has also increased its share price so it means there is more good well of firm is being assumed.
• It has borrowed more or there is increase in some of its liabilities.

Q.2 What can I do to increase the quality outside the firm?

Here are some following tips to increase the value of quality outside the firm.

• Quality can improve by creating constancy of purpose toward improvement of product and service and by developing a plan to be competitive and stay in business. Everyone in the organization, from top management to shop floor workers, should learn the new philosophy.
• Quality can be increase by obtaining 360 feed backs.
• It can be done by adopt the new philosophy. Commonly accepted levels of delays, mistakes, defective materials, and defective workmanship are now intolerable.
• It can be increase by producing good product.
• There should be Cease dependence on mass inspection. Instead, design and build in quality. The purpose of inspection is not to send the product for rework because it does not add value.
• It can be done by increasing productivity.
• It can create by creating good relationships.
• It can be created by CSR and by developing good environment around the company.
• It can be create by continuous increasing the features in the products
• The best supervisors are leaders and coaches, not dictators. Deming high-lighted the key role of supervisors who serve as a vital link between managers and workers. Supervisors first have to be trained in the quality management before they can communicate management’s commitment to quality improvement and serve as role models and leaders. So it will also helpful to for increasing the quality of the firm.
• The best way that I will chose I will do positive marketing some demanded means that will promote my goodwill so it will the key success for me.
• Break down barriers between area it will also support to increase the quality of organization. People should work cooperatively with mutual trust, respect, and appreciation for the needs of others in their work. Internal and external organizational barriers impede the flow of information, prevent entities from perceiving organizational goals, and foster the pursuit of sub unit goals that are not necessarily consistent with the organizational goals. Barriers between organizational levels and departments are internal barriers. External barriers are between the company and its suppliers, customers, investors, and community. Barriers can be eliminated through better communication, cross-functional teams, and changing attitudes and cultures.
• Create a structure in top management that will promote the previous thirteen points. It is the top management’s responsibility to create and maintain a structure it will repute good for the company.

Q.3 What are players A, B, C what are your thoughts about them?

In this company there is a big motive to survive good and to get maximum return by the market that will support the company to get maximum advantage by increasing the profit. Here are the details about the players as they are describes on the case study.

A category player is that person who has following characteristics

So it was determined that a person which having the abilities which are discussed above is acceptable in the organization but those who are lacking they should not b allow here and the HR has no issue to pay head on them they should just focus on the player A that that will give maximum return and they should b in the top 10 % of the company. So there should only they are accepted and they should pay back for that good work they should paid by cash or stock for their satisfactions or just to satisfy them.

Player B & C:

Those who fill not capable of the four qualities (vision, leadership, energy, courage) are fall in this capability. Firm’s rule is just to pull out them or not to pay head on them.

My prospects on this strategy:

I will agree with that technique that will help to pick those persons which are ready to give their A plus as this company requires this and there will another thing when company will take action against the B and C player them they will also try to focus on what they are lacking in them so I think that this is the best option to go for it.

Q. 4 Do I agree that the leaders have these three characteristics energy, energizing and edge.

If we talk about the today’s leaders so there are varieties of them which are having a countless characteristics so as there is mention that a good leader have only three characteristics so would like to say I’m not agree there are lot more for a leader to have in it here are some of them are discussed.

Proactive vs. Reactive:

The exceptional leader is always thinking three steps ahead. Working to master his/her own environment with the goal of avoiding problems before they arise.

Flexible/Adaptable:

How do you handle yourself in unexpected or uncomfortable situations?  An effective leader will adapt to new surroundings and situations, doing his/her best to adjust.

A Good Communicator

As a leader, one must listen…a lot!  You must be willing to work to understand the needs and desires of others. A good leader asks many questions, considers all options, and leads in the right direction.

Respectful:

Treating others with respect will ultimately earn respect.

Quiet Confidence:

Be sure of yourself with humble intentions.

Enthusiastic:

Excitement is contagious. When a leader is motivated and excited about the cause people will be more inclined to follow.

Open-Minded:

Work to consider all options when making decisions. A strong leader will evaluate the input from all interested parties and work for the betterment of the whole.

An exceptional leader will recognize the efforts of others and reinforce those actions. We all enjoy being recognized for our actions!

Well Educated:

Knowledge is power. Work to be well educated on community policies, procedures, organizational norms, etc. Further, your knowledge of issues and information will only increase your success in leading others.

Evaluative:

Evaluation of events and programs is essential for an organization/group to improve and progress. An exceptional leader will constantly evaluate and change programs and policies that are not working.

Are you prepared for meetings, presentations, and events and confident that people around you are prepared and organized as well?

Consistent:

Confidence and respect cannot be attained without your leadership being consistent.

An exceptional leader realizes that he/she cannot accomplish everything on his own.

Initiative:

A leader should work to be the motivator, an initiator. He/she must be a key element in the planning and implementing of new ideas, programs, policies, events, etc.

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Ship that caused bridge collapse had apparent electrical issues while still docked, AP source says

FBI agents were aboard the cargo ship Dali as a criminal investigation opens into the deadly collapse of Baltimore’s Francis Scott Key Bridge. Attorney L. Chris Stewart, representing some of the victims, said their deaths were preventable and said the families appreciated the federal investigation.

People are seen aboard the container ship Dali, Monday, April 15, 2024, in Baltimore. The FBI confirmed that agents were aboard the Dali conducting court-authorized law enforcement activity. (AP Photo/Julia Nikhinson)

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FBI agents get on board the cargo ship Dali on Monday, April 15, 2024 in Baltimore. The FBI is conducting a criminal investigation into the deadly collapse of the Francis Scott Key Bridge that is focused on the circumstances leading up to it and whether all federal laws were followed, according to someone familiar with the matter. (WJLA via AP)

The collapsed Francis Scott Key Bridge lays on top of the container ship Dali, Monday, April 15, 2024, in Baltimore. The FBI confirmed that agents were aboard the Dali conducting court-authorized law enforcement activity. (AP Photo/Julia Nikhinson)

FILE - The container ship Dali is stuck under part of the Francis Scott Key Bridge after the ship hit the bridge, March 26, 2024, in Baltimore, Md. The FBI is conducting a criminal investigation into the deadly collapse of Baltimore’s Francis Scott Key Bridge that is focused on the circumstances leading up to it and whether all federal laws were followed. The FBI says Monday, April 15 it was present conducting court authorized law enforcement activity. (AP Photo/Steve Helber, File)

FILE - This satellite image provided by Maxar shows the bow of the container ship Dali remains stuck underneath sections of the fallen Francis Scott Key Bridge, in Baltimore, April 8, 2024. The FBI is conducting a criminal investigation into the deadly collapse of Baltimore’s Francis Scott Key Bridge that is focused on the circumstances leading up to it and whether all federal laws were followed. The FBI says Monday, April 15 it was present conducting court authorized law enforcement activity. (Satellite image ©2024 Maxar Technologies via AP, file)

Salvage work continues on the collapsed Francis Scott Key Bridge, Monday, April 15, 2024, in Baltimore. The FBI confirmed that agents were aboard the Dali conducting court-authorized law enforcement activity. (AP Photo/Julia Nikhinson)

People work on a standing section of the collapsed Francis Scott Key Bridge, Monday, April 15, 2024, in Baltimore. The FBI confirmed that agents were aboard the Dali conducting court-authorized law enforcement activity. (AP Photo/Julia Nikhinson)

The collapsed Francis Scott Key Bridge lay on top of the container ship Dali, Monday, April 15, 2024, in Baltimore. The FBI confirmed that agents were aboard the Dali conducting court-authorized law enforcement activity. (AP Photo/Julia Nikhinson)

The U.S. Army Corps of Engineers debris removal vessel The Reynolds works near the collapsed Francis Scott Key Bridge, Monday, April 15, 2024, in Baltimore. The FBI confirmed that agents were aboard the Dali conducting court-authorized law enforcement activity. (AP Photo/Julia Nikhinson)

BALTIMORE (AP) — Hours before leaving port, the massive container ship that caused the deadly collapse of a Baltimore bridge experienced apparent electrical problems, a person with knowledge of the situation told The Associated Press on Monday, the same day FBI agents boarded the vessel amid a criminal investigation into the circumstances leading up to the catastrophe.

The Dali departed Baltimore’s port early on March 26 laden with cargo destined for Sri Lanka. It lost power before reaching open water and struck one of the supports for Francis Scott Key Bridge, causing the span to collapse into the Patapsco River and sending six members of a road repair crew plummeting to their deaths. Two of the victims are still unaccounted for.

Authorities announced Monday evening the recovery of a fourth body from a construction vehicle in the underwater wreckage. The person’s identity wasn’t released per their family’s request, officials said.

While the ship was docked in Baltimore, alarms went off on some of its refrigerated containers, indicating an inconsistent power supply, according to the person with knowledge of the situation who was not authorized to publicly comment and spoke to AP on condition of anonymity.

Officials with the National Transportation Safety Board have said their investigation will include an inquiry into whether the ship experienced power issues before starting its voyage.

Board Chair Jennifer Homendy said last week the investigation is focused on the ship’s electrical system generally. The ship experienced power issues moments before the crash, as is evident in videos that show its lights going out and coming back on.

Homendy said information gleaned from the vessel’s voyage data recorder is relatively basic, “so that information in the engine room will help us tremendously.”

The FBI is now conducting a criminal investigation into the bridge collapse that is focused on the circumstances leading up to it and whether all federal laws were followed, according to a different person familiar with the matter. The person wasn’t authorized to discuss details of the investigation publicly and spoke to the AP on the condition of anonymity.

FBI agents were aboard the cargo ship on Monday conducting court-authorized law enforcement activity, the agency said in a statement. It didn’t elaborate and said it wouldn’t comment further on the investigation, which was first reported by The Washington Post.

Meanwhile, Mayor Brandon Scott issued a statement Monday announcing a partnership with two law firms to “launch legal action to hold the wrongdoers responsible” and mitigate harm to the people of Baltimore. He said the city needs to act quickly to protect its own interests.

Scott said the city “will take decisive action to hold responsible all entities accountable for the Key Bridge tragedy,” including the owner, operator and manufacturer of the cargo ship Dali, which began its journey roughly a half-hour before losing power and veering off course.

The Dali is managed by Synergy Marine Group and owned by Grace Ocean Private Ltd., both of Singapore. Danish shipping giant Maersk chartered the Dali.

Synergy and Grace Ocean filed a court petition soon after the collapse seeking to limit their legal liability — a routine procedure for cases litigated under U.S. maritime law. Their joint filing seeks to cap the companies’ liability at roughly $43.6 million. It estimates that the vessel itself is valued at up to $90 million and was owed over $1.1 million in income from freight. The estimate also deducts two major expenses: at least $28 million in repair costs and at least $19.5 million in salvage costs.

“Due to the magnitude of the incident, there are various government agencies conducting investigations, in which we are fully participating,” Synergy spokesperson Darrell Wilson said in a statement Monday. “Out of respect for these investigations and any future legal proceedings, it would be inappropriate to comment further at this time.”

The companies filed their petition under a provision of an 1851 maritime law that allows them to seek to limit their liability to the value of the vessel’s remains after a casualty.

Attorneys for some of the victims and a worker who survived the collapse argued Monday that the companies that own and manage the ship are taking advantage of an “archaic law” in attempting to protect their assets.

“Imagine telling that to grieving families … while they’re planning a funeral, the owner of the boat is in court,” attorney L. Chris Stewart said during a news conference in Baltimore.

The road crew “absolutely had zero warning” in the moments before the collapse, Stewart said, even though a last-minute mayday call from the ship’s pilot allowed nearby police officers to stop traffic from trying to cross the span. Three of the workers’ bodies are still missing, as crews continue the dangerous work of removing massive chunks of steel from the river.

Julio Cervantes, who survived falling from the bridge, narrowly escaped drowning by rolling down his work vehicle’s window and fighting through the frigid water despite being unable to swim, attorneys said. He clung to debris until he was rescued.

“This was all preventable,” Stewart said. “That is why we were brought in to investigate and find out what has happened and give these families a voice.”

The investigations come amid concerns about the safety of thousands of U.S. bridges and days after more than two dozen river barges broke loose and struck a closed span in Pittsburgh.