GENERAL ELECTRIC

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GENERAL ELECTRIC

• THE MOST ADMIRED CORPORATION

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Jack Welch, Chief Executive Officer

• Became CEO 18 1/2 years ago at age 45
• Youngest chief in GEs history
• Raised market value to 300 billion
• Builds talent
• Encourages Mergers Acquisitions
• Changes corporate culture
• Responds rapidly and creatively to change

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Why is GE a successful and admired corporation

• Jack Welch, CEO
• Outward thinking
• Sense of Purpose
• Informality
• Work Out
• Competitive advantage

• Reward System
• Candor
• Agility
• Six Sigma
• Choice of New CEO
• Know how to measure success

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GE Thinks Outside Itself

• Bureaucracy is focused inward
• Designed a culture and reward system to encourage
  people to look outside the company

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Sense of Purpose

• Employees have incentive to do well because of
  stock options
• Employees gain personal satisfaction through
  their work
• Plane Crash
• New Light-Speed CT
• 20 Second Body Scans
• Pride in Product

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Advantages of Informality

• People do not take themselves too seriously
• The ability to make decisions quickly
• People are self-confident enough to have real
  exchanges of ideas

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Work Out

• Changing from old to new
• Series of meeting with employees of all levels
• Discussing ideas of change
• Process of building self confidence

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Work Out

• Town Meetings
• Employees Supervisors
• Exchange of Ideas
• 85 of Issues Resolved Immediately

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Organizations Biggest Advantage

• Ability to learn
• Share that learning
• Act on that learning

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Avoid NIH Syndrome

• Learn Everyday
• Find a Better Way
• Learn from Other Companies - Toyota
• - Wal-Mart

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The Reward System

• Align the reward system with the values that you
  want
• Arrange the system so that everyone is motivated
  to do the best job possible
• Get everyone to cooperate, help, and share their
  talent
• Reward team work

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CANDOR

• Be informal
• Build Trust
• Candor comes naturally

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AGILITY

• Agility must be present in your thinking and in
  your actions
• Companies strengths must be used
• Weaknesses have to be reduced
• A company has to be able to make changes

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Six Sigma

• Management policy designed to get people to do
  their best
• Designed to ensure quality work
• People are trained to do their best
• Gives employees something to strive for

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SIX SIGMA IMPROVES YOUR SCORE

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

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How to determine the companys success

• Are the customers satisfied?
• Are the employees satisfied?
• How good is your cash flow?

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Keys to Success

• Energy
• Sense of Purpose
• Informality
• Work-Out
• Value System
• Culture

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Things to Remember

• Alignment of Values Reward
• Customer Satisfaction
• Employee Satisfaction
• Cash Flow
• Speed
• Simplicity
• Self-Confidence

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Globalization

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

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Services

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

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e-Business

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

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Six Sigma

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

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GE Leaders...Always with unyielding integrity
Are passionately focused on driving customer
success
Live Six Sigma Quality . . . ensure that the
customer is always its first beneficiary . . .
and use it to accelerate growth
Insist on excellence and are intolerant of
bureaucracy
Act in a boundaryless fashion . . .always search
for and apply the best ideas regardless of their
source
Prize global intellectual capital and the people
that provide it . . . build diverse teams to
maximize it
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See change for the growth opportunities it
brings . . . i.e., "e-Business"
Create an environment of "stretch," excitement,
informality and trust . . . reward improvements
. . . and celebrate results
. . . the "4-E's" of GE leadership the personal
Energy to welcome and deal with the speed of
change . . . the ability to create an atmosphere
that Energizes others . . . the Edge to make
difficult decisions . . . and the ability to
consistently Execute
Create a clear, simple, customer-centered vision
. . . and continually renew and refresh its
execution
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GE Facts Reported in CEOs Annual Address in 2000

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

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GE Facts Reported in CEOs Annual Address in 2000

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

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GEs Stellar Performance Record
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Summary

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

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Summary Continued

• The employees must be able to work together.
• Maintain a competitive advantage.
• The reward system must be designed to achieve the
  companys goals.
• The company must be agile.
• A quality process should drive everything they
  do.