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Transcript: How GE management practices have changed

Though GE still makes light bulbs and appliances, those products account for less than 2 per cent of the company’s revenue.


KARL MOORE – This is Karl Moore of the Desautels Faculty of Management at McGill University, talking management for The Globe and Mail. Today, I am talking to Tom Gentile, who is the CEO of [GE Healthcare Systems].

GE is one of the best-known companies in the world. When I talk to my students, for 20 years [I have said] it's the one they should keep an eye on, and follow what is happening there. How is GE's management different than let's say 10-15 years ago, when you were being trained as a younger manager?

TOM GENTILE – The focus at GE has always been about learning and continuous improvement and that's something that has been true since our earliest days.

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We are the only company that was in the original Dow Jones industrial 30 that is still there and so the company has had to grow, evolve and change. So we still make light bulbs and appliances, but today it is less than 2 per cent of our revenues and so we have continued to change.

That is one thing about GE that really has inspired me and kept me so motivated is that there is constant learning. We go through training; everybody spends at least three or four weeks every year involved in training programs in some form, even at very senior levels. Each year I go to Crotonville, which is our in-house university, and I spend many days there either teaching courses or participating in them myself. So I think that is one thing that is critical, is the training and the ongoing development.

We have very, I would say, rigorous discipline processes – we call them operating mechanisms – for strategic planning, for people development, and that is something that has continued.

I think one thing that has changed, and I have to admit I am not a good example of it, is that we are deeper in terms of domain expertise perhaps than we were 20 years ago. Twenty years ago, people would move between different divisions of GE more regularly. Now, again, I am not good example because I started off in GE Capital, and then went to [GE] Aviation, and now I am in [GE] Healthcare, but I am somewhat unusual in today's GE, because the leaders are usually very deep domain experts in their field – whether it is Healthcare, Aviation or Energy, and they spend much longer in their positions because it is so important.

With markets that are global, today it demands deep domain expertise. Now, when I have moved between the industries, I am fortunate enough to have very strong teams around me and that has helped me assimilate into the different industries – but I would say, in general, we are moving away from the generalist model to more specific and deeper domain experts in our business.

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