AN ANALYSIS OF THE ROT AT G.E.

In All The Moving Parts: Organizational Change Management, we talk about General Electric who, during that period of time before Jeffrey Immelt had had the time to fully implement his “take-down” policies, was doing well.  However, about half-way into Immelt’s CEO tenure, it became obvious that he was quickly turning around most of Jack Welch’s gains.  Yesterday’s WSJ cited Immelt’s “success theater” as a factor in masking the rot that was fast overtaking the firm.  WSJ reports that Immelt and his leadership team projected a confidence about GE’s operating prospects and its future that was clearly unrelated to the realities of the problems that the company faced at the time.  Confidence in the future can work wonders; however, fake confidence only fosters harm and prevents the accomplishing of a successfully functioning future.  Immelt stepped down last year and was replaced by the new CEO John Flannery who has been working deliberatively to effect a “turn-around” from the “take-down.”

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