General Electric (GE) opens a new chapter of its management philosophy. As reported by The Wall Street Journal, the company no longer wants management generalists in executive potitions. Experts with deep knowledge of their industry are prefered. While the senior leaders at GE previously moved to other parts of the company to improve their management skills approximately every two years, now they stay longer in order to further understand the products and customers in their field. The strategy of current CEO Jeff Immelt as well as the increasing competition and limited budgets in some fields of GE's operation play a role in the shift.
GE Vice Chairman and the CEO of GE Energy John Krenicki, for example, passed executive positions in the divisions of chemicals and materials, lighting, superabrasives, transport, plastics and advanced materials before taking up his position in GE Energy. He has been in the role for seven years and he believes that his successor will not have the same CV. He will most likely come directly from GE Energy.
GE traditionally produced senior managers able to seamlessly move between companies operating in completely different areas of business. The tradition of "professional managers" working for a short time in different parts of the company was established in the 1950s and strengthened under the influence of the legendary CEO Jack Welch who had led the company from 1981 to 2001. GE became the most valuable company of that time in the world under his leadership.
"The world today is very complex," Wall Street Journal quoted Susan Peters, the GE Director of executive development. "We need people with deep knowledge of their fields."
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