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GE has traditionally been about creating "true managers" — people who can manage any type of business without a hitch.
Now it's altering its whole philosophy. Instead of grooming generalists, it wants to focus more on expertise, reports Kate Linebaugh at the Wall Street Journal.
This goes starkly against the old "GE Way," made famous under Jack Welch, which represents an ideal "borderless organization" that takes down the boundaries between management layers and thrives off of generalists.
So what sparked the paradigm shift?
Competition has ramped up and customers want experts
GE has realigned itself and is focusing on a few core businesses under CEO Jeff Immelt, cutting ties with many of its old big businesses. Now it's all about health care, financial services, energy and aircraft engines.
With competition so high in, say, aircraft engines, customers want specialists that they can trust to be the best at what they do — not jack-of-all-trades. Customers often don't say exactly what they want, so GE has to prove it can translate vague demands into a successful product, reports Linebaugh.
It's trying to promote accountability within the organization
Noel Tichy, who ran a leadership training center at GE in the 1980s, told Linebaugh, "we were moving people every two years so it was musical chairs and the joke was you could parachute into a business that was on an upswing and get all the credit."
GE famously moves executives to different businesses to test their abilities. Now, executives will have to make it all the way through a business cycle to prove their worth—not just piggyback on someone else's success.
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