GE 2012 Annual Report Download - page 19

1
Double-digit
earnings
growth for
GE industrial
2
Significant
cash
returned to
parent from
GE Capital
3
Significant
margin
expansion
4
Solid
industrial
segment
organic
revenue
growth
5
Return
cash to
shareholders
2013: WHAT IS IMPORTANT TO INVESTORS
We are lucky that government can set
the “floor” with favorability at 13%.
So is size inherently bad? I don’t think
so. But size can breed a perversion of
bureaucracy, a sense of entitlement
and a distance from reality. Size is bad
when it crushes innovation. A good
culture is the only filter that can make
size a strength and not a weakness.
Over the past year or so, I have made
it a priority to personally connect with
entrepreneurs and venture capital-
ists. I wanted to understand more
about the start-up culture and the
ways that smart entrepreneurs run
their companies.
Now, I don’t want to make GE a start-
up. GE’s great strength is our scale.
GE has more than 40,000 salespeople,
supported by 50,000 engineers and
scientists; we can sell in more than
160 countries with the world’s sixth
most valuable brand.
The trick is to keep all of that, but with-
out the bureaucracy and arrogance
that can often accompany size.
The fact is that GE was becoming too
complicated. We were simply working
on too many things that aren’t impor-
tant. We had too many “checkers”
and not enough “doers.” Visiting with
entrepreneurs has helped me focus
on complexity, accountability and
purpose. I have found two books—
The Lean Startup and The Startup
Playbook—to be particularly useful.
Entrepreneurs simplify everything.
They are purpose-driven. They focus
on customers, people and solving
problems. They do fewer things, but
with bigger impact. They don’t del-
egate important decisions; rather,
they position decision-makers close
to the action. There is no headquar-
ters, no layer of “checkers.” They use
judgment, they move fast, and they
are accountable.
The unique leadership movement
inside GE today is Simplification.
Part of it is structural. We want the
Company to be lower-cost, have
shorter cycle times, and match author-
ity to accountability. And we need to
accomplish this across multiple plat-
forms, in diverse markets, living in an
era of hyper-regulation.
But the other part of Simplification
is cultural. Big companies fail when
they lose a culture of accountabil-
ity—accountability for outcomes.
We must compete with purpose. And
we must deliver outcomes for custom-
ers, investors, society and each other.
We are building processes that drive
speed, accountability and compliance.
We are committed to long-term think-
ing despite volatility in the current
environment. The decisions we are
making today will shape the Company
for years to come. GE can execute on
a scale few can match. I hope, as an
investor, that makes you proud.
So, what is leadership? It is the har-
nessing of culture, the culture of GE
Works. We are mission-based. We
search for a better way. We drive
solutions for our customers and
society. We are a “We Company.” It is
driving accountability for outcomes.
It is fostering smart risk-taking and
business judgment.
You have invested in GE. You know the
choices we have made for the next
decade. You have seen our execution
and the key metrics we use to manage
the Company. You have a sense for our
culture and leadership team. You will
see this reinforced in the rest of this
report. Let me know what you think.
You can e-mail me at [e-mail].
Jeffrey R. Immelt
Chairman of the Board
and Chief Executive Officer
February 26, 2013
GE 2012 ANNUAL REPORT 17