“GE’s Growth Strategy: The Immelt Initiative,” it discusses the challenges faced by Jeff Immelt, hired as CEO in 2001, c and how he changed GE’s growth strategy, Taking over for a legend Jack Welch, Immelt did not sit on his hands and go with the status quo. Further, he faced some unique challenges as he took over as the 9/11 attacks had taken place. These attacks threw the economy into a tailspin and Immelt was dealing with GE doubters on Wall Street. Based on these and other challenges, Immelt realized a change in strategy was due despite the monumental success that GE led by Welch had enjoyed. Immelt decided he wanted to take GE into “big fundamental high-technology infrastructure industries, places where he felt GE could have competitive advantage and where others could not easily follow.” Based on this, Immelt put a greater investment into R&D, changed the companies culture by empowering his employees in the creative process, changed the companies stance on social responsibility, put greater focus on the customer, and changed the way GE spent it’s money. Ge capital had long been the cash cow for GE but Immelt realized that technology was the way to grow GE into the company he visioned.
A few takeaway’s from this article: One, Immelt recognized the need for entry barriers in his overall growth strategy. The technologies and software they developed and invested in, would be difficult for others to copy or produce. Second, Immelt realized the changing economic climate. GE Capital, once GE’s cash cow, would certainly be impacted by the post 9/11 financial crises and again in the recession in 2008. Third, he vastly changed the way GE was run and it’s culture despite the long standing success of Jack Welch. I am sure people, including Wall Street analysts, bristled with this notion as they had seen GE do so well for so long, but Immelt showed grit with his vision and strategies. Finally, he realized the key role his employees had in delivering on his strategy. Through his Imaginations Breakthroughs program, GE not only saw success in the US, but it helped poise GE for a greater global presence.
As we see today, this change in strategy for GE has paid off and had Immelt not stuck to his guns and decided status quo was not the way to go, GE might not have gotten to that point.