The Spark Behind GE’s Revival

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 Nothing big, nothing bold, nothing important ever happens without starting with the end in mind.

Larry Culp, Chairman & CEO of General Electric 


Jack Welch catapulted General Electric to global dominance from 1981 to 2001. He prioritised profit but at the cost of transparency. He laid off teams and compelled managers to hit stringent targets, resulting in accounting irregularities. This set a precarious foundation for GE.

Jeff Immelt – who succeeded Welch as CEO – inherited this legacy. Yet, he struggled with complex business structures and poor strategic choices. His tenure, also marred by a lack of transparency and ill-timed acquisitions and buybacks, destabilised GE. In 2017, issues within the company’s power division triggered massive layoffs and its removal from the Dow after 110 years. The crisis forced Immelt to resign. 

After decades of poor decision-making, the new CEO Larry Culp – formerly CEO of Danaher, renowned for the operational execution methodology Danaher Business Systems – proved how a back-to-basics approach would once more lead to GE’s resurgence.

Real-Life Story

Once celebrated for exemplary management, GE had become a symbol of decline. Larry Culp, however, orchestrated its revival when he became CEO in 2018. He initiated this by restructuring the board – shrinking it from 18 to 12 members and introducing new perspectives through the addition of external experts, Tom Horton and Leslie Seidman.

Culp’s strategic overhaul included the adoption of lean manufacturing principles to enhance efficiency and cut costs, streamlining operations and encouraging staff involvement in problem-solving. He also split GE into three focused entities: GE Aerospace, GE Healthcare, and GE Vernova, aiming to drive efficiency by banking on each unit’s core competencies.

Culturally, Culp moved GE away from a blame-oriented environment towards one of continuous improvement. The shift empowered employees to actively participate in identifying issues and crafting solutions.

Financially, he tackled the inherited debt aggressively, significantly strengthening GE’s financial position and enabling strategic investments.

Changes under Culp’s leadership have revitalised GE, demonstrated by a surge in its share price by 95.8% in 2023 and surpassing tech giants such as Apple, Google, and Microsoft.

PostScript: Culp redefined operational and product excellence by keeping a healthy cash flow and staying committed to quality and innovation.

Key Lessons

1) Focus on structural efficiency

Larry Culp's decision to shrink and diversify the board demonstrates the importance of having the right team, capable of bringing fresh perspectives and expertise. WarTime CEOs should ensure their boards and management teams are aligned with the company’s strategic objectives.

2) Empower teams through transparency and engagement 

Transitioning from a blame-oriented culture to one of continuous improvement was crucial. WarTime CEOs should foster a culture where employees are encouraged to identify problems and contribute solutions, enhancing engagement and innovation.

3) Adaptability is key 

The division of GE into three focussed entities underscored the need for businesses to remain adaptable. By developing core competencies, companies can navigate market changes more effectively. WarTime CEOs should remain flexible, ready to revaluate and adjust business models to market demands.

4) Be prudent in your financial management 

Culp’s approach to reducing debt, along with his overall financial strategy, highlights the importance of maintaining financial prudence. WarTime CEOs should prioritise investments that are sustainable and match long-term goals.

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