Wednesday, April 27, 2011

General Electric: Back to where it all started

“An organization's ability to learn, and translate that learning into action rapidly, is the ultimate competitive advantage. “ – Jack Welch

General Electric was started in the year 1878 with generation, distribution and use of electric power at the center of its priorities.

Near the end of the 20th century, General Electric took the risk of not focusing enough on its core competency i.e. making physical products and was allured into the fancy trap of quick money as they thought financial engineering was the way forward.

The result: It was punched in the face by the financial crisis.

The lesson: Stick to what you know.

The solution: In the wake of recent events, powered by a study from McKinsey & company, they made the wise decision of turning back to what had worked well for them in the past one hundred plus years.

The way forward: While the firm is back on track it is important for them to continue down that path.

What happened can be best summed up in the following words by the famous Jack Welch.

“Change before you have to. “– Jack Welch


  • G.E. Goes With What It Knows: Making Stuff (New York Times, December 4, 2010)
  • Can You Say What Your Strategy Is? (Collis and Rukstad, Harvard Business Review, April 2008)
  • The Secrets to Successful Strategy Execution (Neilson, Martin, and Powers, Harvard Business Review, June 2008)
Author: Shubham Raj

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