Sandy Wibisono Address: General Electric Company Internet Registrations 3135 Easton Turnpike Fairfield, CT 06828-0001 USA  Founded in 1878 by Thomas Edison.  Focus on Generation , Distribution, and use of electric power to become.  1978 – Power Generation , household appliances, lighting + Aircraft engines, medical systems and Diesel Locomotives. 1960 1950 • Decentralization • strengthen its corporate staff and develop sophisticated planning systems 1930 • centralized GE –a Bellwether of American Management Practices Strategy-SBU based structure and planning processes • • • 10 groups, 46 divisions, 190 departments, and 43 strategic business units Develop a constructive business-government dialogue Wall Street Journal proclaimed him as a “management legend” Success • • • Sales more than doubled ($10 billion to $22 billion) and earnings grew even faster ($572 million to $1.4 billion) A major thrust into international markets Expansion of world trade and restoration of U.S. competitiveness  1935: born in Salem, Massachusetts  1957: BS in Chemical Engineering  1960: MS and PhD in Chemical Engineering • 1960: Joined GE as a chemical engineer • 1972: Elected GE’s youngest VP • 1979: Vice Chairman • April 1, 1981: Became the 8th Chairman and CEO of General Electric  Challenge form outside GE  Economic recession  High interest rates  Highest unemployment rate since the depression  Challenges from GE  Massive information and inefficient macro-business  “A decade from now, I would Services Technology GECC Information Construction & Engineering Nuclear Services Industrial Electronics Medical Systems Material Aerospace Aircraft Engines Core Support Ladd Petroleum Semi Conductor GE Trading Co. Utah Mining Lighting Major Appliance Motor Transportation Turbine Construction Equipment Ventures Calma Three-Circle Vision for GE like General Electric to be perceived as a Unique, highspirited, Entrepreneurial enterprise…the most profitable, highly diversified company on the earth, with world quality leadership in every one of its product lines”. -- Jack Welch Outside Housewares Central Air-Conditioning TV&Audio Cable Mobile Power Delivery Radio Stations  Challenged everyone to be “better than the best”  Sold more than 200 businesses and made over 370 acquisitions  Insisted GE become more “lean and agile” resulting  Delayering: elimination of the “sector” level  Downsizing: elimination of about 123,450 jobs  Divestiture: elimination of an additional 122,700 jobs  Replaced 12 of his 14 business heads Work Out Best Practices Going Global Developing Leaders Software Iniatives Second Wave Boundaryless Behavior Service Businesses Six Sigma E-Business Third Wave  A process designed to get unnecessary bureaucratic work out of the system while providing a forum in which employees and their bosses could work out new ways of dealing with each other.  How to increase Productivity ? Michael Fraizer of GE’s Business Development • They focused more on developing effective processes than controlling individual activities. • Customer satisfaction was their main gauge of performance. • They treated their supplier as partners • They emphasized the need for a constant stream of high quality new products designed for efficient manufacturing  1989 – appointed Paulo Fresco as head international Operations.  a key negotiator on the thompson swap  Continued to broker numerous international deals  a joint venture with German-based Robert Bosch  a Partnership with Toshiba  Acquisition of Sovac , the French Consumer credit Company Loyal Creative Strong People Professional SelfConfidence Passion for Excellent Aggressive Capacity to develop global brain Change  To strengthening GE’s Individual Businesses Integrated Diversity Boundaryless Company The Boundaryless company we envision will remove the barriers among engineering, manufacturing, marketing, sales, and customer service; it will recognize no distinctions between domestic and foreign operation …..  1990 , Welch Introduced the notion of “stretch” to set performance targets and described it as “using dreams to set business targets, with no real idea of how to get there.”  Stretch Targets did not replace traditional forecasting and objectives-setting process.  In 1994, Welch launched a new strategic initiative designed to reinforce one of his earliest goals: to reduce GE’s dependence on its traditional industrial products. 1980 1990 1995 1998 2 15% 2 45% 1 33% 1 45% 1 55% 2 55% 2 67% 1 85% Products Services  Issue  When a 1995 Company Survey showed that GE employees were dissatisfied with the quality of its products and processes.  Six Sigma (Motorola Inc and AlliedSignal)  Improve Quality  Lower Cost  Increase Productivity  1996 – Boca Raton- Welch announced a goal of 5 Months implementation 6 weeks of instruction in statistic , data analysis and other six sigma tools Master Black Belts 4 weeks training Black Belts Green Belts reaching Six Sigma quality levels company – wide by the year 2000, describing the program as “the biggest opportunity for growth, increased profitability , and individual employee satisfaction in the history of our company.” Full time six sigma instructors – mentored the Black Belt candidates through the two –years process  destoryyourbusiness.com (www.dyb.com)  “A – Players”  Individuals with vision , leadership, energy and courage  “4 E’s”  Energy ,  Ability to Energize others ,  Edge , the ability to make tough calls  Execution , the consistent ability to turn vision into results. First Wave Second Wave GE’s Restructuring #1 or #2 – fix, sell, or close 1981 Third Wave Cultural Changes Work Out Best Practices 1988 1990 Boundaryless ness