The news that GE, once the world’s largest and most admired company, is being broken up has caused many to reflect on the drivers of its decline and to look back at a business model that now seems anachronistic. In its heyday under Jack Welch, GE was a vast conglomerate employing over 300,000 people globally in businesses as diverse as broadcasting, railway engines, medical diagnostics and automobile finance.
But to judge the group’s long history only on its recent performance is to vastly underrate the successes of its glory years, in particular, the extraordinary achievement of creating a strong, consistent corporate culture across an incredibly diverse range of individual businesses.
Like many GE alumni, sight of the GE “meatball” still fills me with pride. Its unifying, values-driven culture was the glue that held the group together, that allowed colleagues to pursue global careers across an eclectic range of industries from road haulage to nuclear power, that delivered the flat management structures needed for genuine empowerment, and that meant that joining any GE meeting, anywhere in the world, felt instantly familiar, effective and assured.
A week before I joined GE in 1996, I was sent in the post a copy of the code of ethics (“Integrity: the Spirit & Letter Guide”) with instructions to read it carefully and be ready to sign the tear-off affirmation on my first morning. It was the first and most important part of my induction, reinforcing the message that how we did business would be as important as what we might achieve.
Values were integrated into every aspect of GE’s business, with Welch using his simple “makes the numbers/has the values” matrix to signal the need to deal decisively with people who delivered results but didn’t live the values.
“Integrity” was a word with a special meaning and particular resonance in GE. If someone said in a meeting “I have an integrity concern with that proposal”, it was like dropping a plate in a restaurant; everyone instantly stopped, looped back to work out where we had gone wrong and focused on finding a better way forward.
Even the comically clumsy value of “Boundarylessness” served a useful purpose, signalling how damaging it was to the organisation as a whole when different GE businesses approached the same customer without properly co-ordinating.
Integration and best practices
My business grew very rapidly through acquisition, identifying and delivering on a pipeline of acquisitions that put us ahead of the investment banks in the European M&A league tables.
At the time, this was all resourced internally, pulling individuals out of our day jobs to create a temporary deal team. The integration leader was the first name on the team list and took the lead on cultural due diligence and cultural integration planning.
All the difficult decisions on people were taken on day one, with talented individuals in the acquired business sometimes getting immediate two-level promotions as the deal closed. Wood panelling was rapidly replaced with the standard GE open plan desks, suits and ties with chinos, and the integrated businesses were recognisably GE in look and feel within weeks.
In stark contrast to the “not invented here” attitudes of others, GE enthusiastically adopted best practices it saw elsewhere, perhaps most notably with the Six Sigma process improvement methodology developed by Motorola. This had a huge cultural impact. As one of my colleagues commented at the time, it “institutionalised common sense”, encouraging everyone to challenge established ways of working, providing practical tools and a common language for improvement, but keeping what was critical to the customer at the centre.
Communication had to be simple and direct to be effective across such a wide range of businesses and geographies. The annual training on Spirit & Letter leveraged the presentation skills of NBC television (at that time a GE business), presenting with candour real examples of things that had gone very badly wrong. There was an open acknowledgement that the organisation made mistakes, even at a senior level, but what mattered most was learning from the experience.
GE’s culture of empowerment
When things didn’t look or feel right, we were all not just empowered but expected to call out our concerns and to take ownership of the issue regardless of whether it fell within our line responsibilities.
Speak up channels were well resourced, with a network of champions to encourage colleagues to raise any concerns. The business provided the help that was needed to fix the problems that were raised, most notably through “Workout” (which essentially involved identifying all the stakeholders needed to fix an issue and locking them in a room until they had mapped out and agreed on a robust and effective solution).
GE under Jack Welch was decades ahead of its time. Of course, it wasn’t perfect (a colleague achieved legendary status by commenting to the chairman that “I would like to work for the company I read about”) but it was by far the strongest, most effective corporate culture I have experienced and a great place to work.
There is much from GE in the ’90s that today’s companies could still learn from. In particular, businesses that are struggling to establish consistent cultures across far less diverse organisations than GE could usefully seek inspiration from the house that Jack built.