GENERAL ELECTRIC SPARKS A NEW PATH

New GE CEO John Flannery was hired to turn the struggling conglomerate around.  His current strategy is to focus on GE’s aviation, power and health care divisions while pulling back from the transportation and lighting units.  He will also continue to evaluate and assess the performance of all the company’s portfolio of businesses.  The current changes in focus, along with a reduction of the company’s dividend by $4 billion and a change to the make-up of the board of directors, reducing the number from 18 to 12 and replacing half of the existing directors, are intended to produce a smaller and simpler company by the end of 2018.  As we discuss in BLAIR’S RULES: A STRATEGIC GUIDE TO ORGANIZATIONAL CHANGE MANAGEMENT, these are the kind of strategies that must be employed on a regular basis for companies to survive and thrive.  The change actions are best accomplished through Strategy Systems Building and conducted in advance of the surfacing of serious problems, but that process had been ignored during the previous CEO’s later years.  When this is the situation, it’s always a good approach to think carefully about strategy, as Flannery is doing, and implement immediate changes, combined with reviewing and revising as the plan is implemented.

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