Jeff immelt
It has been no doubts that Immelt has been successful in fostering innovation by challenging the usual management-discipline business model that Jack Welch had created. From my analysis, I would like to analyze 2 major transformations that Immelt had implemented; Heavy acquisitions and Imagination Breakthrough. Although he brought remarkable achievements to GE through the above-mentioned transformations using his innovative management style, there are reasons why I did not choose Immelt as my role model.
After Immelt stepped in as the new CEO of GE, the company made 2003 as the biggest accquistion year in the history of GE with total value of more than $30 billion. (footnote) Although some may say it is an effective strategy to improve GE’s performances, I personally feel that such action is taking too much risk for an underperformed company. Immelt may opportunity-seeking expertise, but he should consider unforeseen circumstances that may occur during the acquisition period. For example, GE $3.3 billion acquisition of Lufkin Industries showed a 38% purchase price higher than it should be.(footnote) http://www.businessweek.com/articles/2013-04-08/did-ges-jeff-immelt-pay-too-much-for-lufkin
Thus, Immelt gave an impression that if he wants something, he would not hesitate to pay a superior price. As a leader, risk taking is a essential strategy, but overly risk taking may create a lost of confidence of one’s shareholders and followers.
Another policy implemented by Immelt that I deemed flawed, is GE’s Imagination Breakthrough, by having each business leader to submit at least three proposals a year.(footnote) Although this strategy may seem to promotes innovation by having new business creations, a policy of having 3 may result in forcing creativity. Immelt fails to understand that innovation should not be a process, innovation just happens. Instead of making it into a compulsory 3 proposals sunmission process, Immelt should make it a reward-based process,
After Immelt stepped in as the new CEO of GE, the company made 2003 as the biggest accquistion year in the history of GE with total value of more than $30 billion. (footnote) Although some may say it is an effective strategy to improve GE’s performances, I personally feel that such action is taking too much risk for an underperformed company. Immelt may opportunity-seeking expertise, but he should consider unforeseen circumstances that may occur during the acquisition period. For example, GE $3.3 billion acquisition of Lufkin Industries showed a 38% purchase price higher than it should be.(footnote) http://www.businessweek.com/articles/2013-04-08/did-ges-jeff-immelt-pay-too-much-for-lufkin
Thus, Immelt gave an impression that if he wants something, he would not hesitate to pay a superior price. As a leader, risk taking is a essential strategy, but overly risk taking may create a lost of confidence of one’s shareholders and followers.
Another policy implemented by Immelt that I deemed flawed, is GE’s Imagination Breakthrough, by having each business leader to submit at least three proposals a year.(footnote) Although this strategy may seem to promotes innovation by having new business creations, a policy of having 3 may result in forcing creativity. Immelt fails to understand that innovation should not be a process, innovation just happens. Instead of making it into a compulsory 3 proposals sunmission process, Immelt should make it a reward-based process,