i have case i want u to read it and answer the questions i attached also fill the VRIO form

06_ge.pdf

Home >Business & Finance homework help >Management homework help >i have case i want u to read it and answer the questions i attached also fill the VRIO form

MARNE L. ARTHAUO-DAY

ALICIA HORBACZEWSKI

FRANK T. ROTHAERMEL

Healthymagination at GE (in 2011)

• MHE-FTR-010 0077645065

Time magazine called this era "The Decade from Hell," and "when you are going through hell," Winston Churchill advised, "keep going."

-Opening statement of the GE 2009 Annual Report

IT HAD BEEN a heck of a decade for Jeffrey Irnmelt, Chairman and CEO of General Electric (GE), the quintessential American blue-chip company. Mr. Immelt' s new role as chief executive started on September 7, 2001, just four days before the 9 /11 terrorist attacks. Since that tragedy, Mr. lmmelt had spent his time putting out fire after fire. Because of 9/11, the U.S. economy was pushed into a reces- sion, and a global economic slowdown began. Several of GE's key industrial sectors such as aviation and energy were especially hard hit, and even GE's insurance business lost $600 million. The company that had repeatedly promised and delivered annual profit growth rates of 16 to 18 percent in the 1990s struggled to grow at half that pace in the new millennium.1

Beginning his tenure as CEO in 2001, Immelt continued GE's transition from a low-margin, mainly commodities manufacturer to a more lucrative services company.2 At the same time, he took several steps to unify the GE brand around a stronger focus on innovation, including changing the GE motto to "Imagination at Work." Inunelt remembered keenly what GE's former CEO Jack Welch had preached: "If the rate of change inside an organization is less than the rate outside, the end is in sight .... Leaders must develop a sixth sense, an ability to see around the comer."3 Immelt's ability to "see around the corner" was precisely the star talent that had gotten him to his job as CEO.

The global financial crisis beginning in 2008 compounded the company's troubles even further. Because the conglomerate relied on its financial services unit, GE Capital, for more than 50 percent of its profits, the company found itself in grave danger. In 2009, GE announced that it had missed its quarterly earnings forecast just weeks after Irnmelt had reassured investors the company was on track, sending shockwaves throughout the financial industry.4 GE's stock price fell by 13 percent by the end of that day, resulting in a $47 billion loss.5 One month later, Standard & Poor's downgraded GE's AAA credit rating, further underscoring the market's lost confidence in GE's financial health.6

hnmelt quickly undertook a series of drastic actions to restabilize the company, including cutting the company's dividend by 68 percent,7 downsizing the work force by 10 percent, and giving up his own bonus in both 2009 and 2010. He even asked Warren Buffett for a $15 billion liquidity injection. On March 5, 2009, GE's share price hit an all-time low of $6.66, a figure symbolizing the culmination of GE's "Decade from Hell." From his assumption of the company leadership in 2001, lmmelt had seen GE's market capitalization cut in half, to about $200 billion by 2010. (See Exhibits la through ld for financial performance data.)

Professor Marne L. Arthaud-Day, Research Associate Alida Horbaczewski (GT MBA '10) and Professor Frank T. Rothaermel prepared this case from public sources. This case is developed for the purpose of class discussion. It not intended to be used for any kind of endorsement, source of data, or depiction of efficient or inefficient management.© Arthaud-Day, Horbaczewski, & Rothaermel, 2013.

Strategy & Policy

Healthymagination at GE

As the financial crisis persisted, it became clear to both Inunelt and GE's investors that the com- pany needed to rethink its corporate strategy. Once a key resource utilized to finance acquisitions and smooth quarterly earnings for the other divisions, GE Capital's losses were now a drain on the overall health of the firm. Increasingly, Immelt saw the financial crisis as an opportunity to move the company away from dependence on GE Capital and toward a new identity for the 21st century. He believed the key to future success was to figure out how to refocus GE away from declining businesses toward the rapidly growing industries of the future. The time was ripe for GE to return to its roots and become an industrial company again.

The first step in Immelt's plan involved a series of corporate restructurings. Earlier in his tenure, hnmelt had divested business units representing 40 percent of revenues and consolidated GE's mul- tiple business divisions into just five: GE Capital, GE Technology Infrastructure, GE Energy, NBC Universal, and GE Home & Business Solutions. In 2008, he extended that process, selling portions of GE Capital and spinning off the famed GE Consumer and Industrial division, allowing GE to focus on an even narrower group of businesses. (See Exhibits 2a and 2b for changing product and geographic scope.) In 2009, Immelt announced his intent to shrink GE Capital to no more than 30 percent of the total corporate profits, and he sold a majority stake in NBC Universal to Comcast Corp. 8 (See Exhibit 3 for an organizational chart.) The funds generated from the sale of NBC were used to offset loan losses from GE Capital and to fund investments in aviation, health care, and energy.9

These efforts were met with mixed reactions. While some analysts wondered whether the company was becoming too narrowly focused and losing the ability to hedge its bets, others recommended even further divestment. They pointed out that the company's simplified organizational structure belied the fact that GE had engaged in 307 acquisitions and purchased stakes in another 105 firms from 2001- 2010, while selling only 266 business units.10 In fact, acquisitions exceeded divestitures in all but 3 of the past 10 years (see Exhibit 4). Moreover, some of the purchases (e.g., homeland security, commercial real estate, and subprime mortgages) were at best tangentially related to GE's stated focus on global technology, infrastructure, and industrial businesses.11 GE remained a sprawling conglomerate with a presence in a vast array of industries including electrical distribution, oil and gas, water and pro- cess technologies, aviation, health care, transportation, appliances, consumer electronics, lighting, and media.

Without the financial economies once supplied by GE Capital, Mr. Immelt needed to persuade inves- tors that his acquisitions were justified and that there was still a strategic reason for keeping these com- panies together under the GE corporate umbrella. Otherwise, investors would be better off investing in growth markets on their own, instead of subsidizing GE's administrative costs. In the words of one analyst, "Reshaping GE [was] vital if the stock and Mr. hnmelt [were] to regain their former luster."12

History of Strategic Leadership at GE

The decline of GE's value under Jeffrey hmnelt's leadership was striking when compared to the widely acknowledged successes of his predecessors. When Reginald Jones became the seventh CEO in 1972, he shifted GE away from its traditional focus on electrical equipment and appliances and concen- trated instead on services, transportation, and natural resources. Even more important, he is credited with implementing the notion of strategic plarming at GE, having created 43 strategic business units to oversee its groups, divisions, and departments as well as manage the information generated by 43 stra- tegic plans. Over time, Reginald Jones added more management layers and finally grouped the busi- nesses into three divisions: consumer products, power systems, and technical products.13 Under his leadership, GE's sales almost tripled to $27billion, and he was named "CEO of the Decade" in 1979.14

( )

Healthymagination at GE {in 2011)

Healthymagination at GE

Jack Welch began working at GE in 1961 and was well known for his disdain for bureaucracy. Upon becoming CEO in 1981, Mr. Welch immediately instituted a massive downsizing effort. The restructuring did away with several layers of GE's formal reporting structure, increasing the number of direct reports per manager from 5 to 15. The number of employees at GE dropped from 404,000 in 1980 to 292,000 by 1989.15 Mr. Welch's strategy was not just to cut employees and costs, however. He envisioned a GE in which each of the businesses would be first or second in its industry in terms of market share, or else would be fixed, sold, or closed. From 1981 to 1987, he sold 200 businesses and acquired 370 businesses, for a net cost of $10 billion, 16 earning Welch the title of 'The Toughest Boss in America. "17 While Welch reigned over GE, market capitalization increased from $18 billion to over $500 billion.18 With GE's performance outshining all other companies during his tenure, he gained not only admiration but also converts and devotees to the "Welch Way."

The GE motto under Welch was "We Bring Good Things to Life." Welch implemented this success- ful slogan by introducing GE to Six Sigma (6rr), which was invented by Motorola in 1981. Six Sigma is a business-management process that focuses on improving the quality of outputs by removing the causes of potential defects and minimizing variability. The name Six Sigma comes from the statistical modeling of a manufacturing process in which the percentage of a process is 99 .99966 percent free of defects. Under Welch's leadership, every GE employee underwent extensive training to learn how to improve quality, lower costs, and increase productivity. GE now had decades of experience as a best-practice Six Sigma company and was renowned for its operational efficiency and mature management processes. Analysts estimated that the resulting performance tools that GE developed in technology, process, information, and culture brought in an additional $40 billion in revenue per year.19

A former football player for Darbnouth College and an MBA graduate from Harvard Business School, Jeff Inunelt joined GE in 1982. He was only 45 years old when jack Welch handpicked him as his successor above two other, more-experienced candidates-Robert Nardelli, who went on to become CEO of Home Depot and then Chrysler amidst considerable controversy, and Jim McNemey, who went on to head 3M and currently serves as CEO of Boeing.

Ecomagination

Im.melt saw GE as a company known for solving problems. He believed energy and health care to be two of the most pressing problems in the world today, and he placed his bets accordingly. With GE's long-standing expertise in industrial engineering, Immelt believed ·that GE was uniquely positioned to develop technological solutions for the world's future energy needs. In 2004, GE spent $700 million on clean technology. With the launch of a new ecomagination initiative in 2005, Irrunelt pledged to triple that amount over the next five years.20

The ecomagination initiative was intended to "develop tomorrow's solutions such as solar energy, hybrid locomotives, fuel cells, lower-emission aircraft engines, lighter and stronger durable materials, efficient lighting, and water purification technology."21 Immelt saw it as a way to deliver more energy- efficient products and services to GE's customers while generating reliable growth for the company. The program's goals included increasing GE's invesbnent in green technology R&D, increasing the rev- enues raised from ecomagination products, reducing GE's own greenhouse-gas emissions and improv- ing energy intensity, reducing water use and improving water reuse, and increasing communication with the public.22 In rolling out this initiative, Mr. Immelt also called upon the Bush administration to formulate a clear policy on environmental values and global warming.23

Strategy & Policy

Healthymagination at GE

Despite GE's strong track record in industrial engineering and program management, some observ- ers received the news of the new eco-initiative with considerable skepticism. They questioned how serious GE was in its comrnihnent to a green economy, given its past reputation for large-scale air and water pollution. As of 2000, GE was the fourth-largest producer of air pollution in the United States and the fifth-largest creator of toxic waste, after companies like Honeywell and Chevron. Critics argued that "Mr. Immelt's credibility as a spokesman on national environmental policy is fatally flawed because of his company's own intransigence in cleaning up its own toxic legacy."24

Yet over the next few years, Mr. Immelt succeeded in turning both the company and public opinion around with ecomagination. In 2009, Business Week ranked GE as the #17 Most Innovative Company in the world, mostly because of its environmental initiatives. GE personnel created nearly 100 new green products spanning across company segments ranging from appliances to aviation, energy, lighting, transportation, and water. Indeed, there was such positive market response to ecomagination products that revenues from the program grew 260 percent, to $18 billion by 2009. That same year, lmmelt com- mitted $1.5 billion annually in clean-technology R&D, with pledges to increase that value to $10 billion by 2015.25

The ecomagination initiative proved to be a success for GE (see Exhibit 5 for the results) in both real dollars and intangible goodwill. GE became one of the largest players in the wind-power industry, and was continuing to develop innovative new products such as the Evolution Series locomotive and GEnx aircraft engine, which burned significantly less fuel than their predecessors. By 2009, GE had success- fully lowered its greenhouse gas emissions by 22 percent and reduced its water use by 30 percent, with even further reductions planned for the future. In an ecomagination advertising campaign, Immelt was quoted as saying, "It's no longer a zero-sum game-things that are good for the environment are also good for business."26 Mr. Immelt learned through the ecomagination experience that with innovation, all stakeholders- customers, employees, investors and the public-can win.27

Healthymagination

"It's the most valuable thing on earth. All the money in the world can't buy it. Those wlw have it don't always appreciate it. Those wlw have lost it will do anything to get it back. What is it? It's Health. At GE, we believe what's needed, right now, is a new mindset that embraces that health is everything. We call it healthymagination." 28

Inspired by the success of ecomagination, Mr. Immelt launched GE's $6 billion healthymagination initia- tive in May 2009, hoping to leverage the company's technical knowledge, global position, and financial strength to transform the health care industry.29 He needed a repeat performance to rebuild the com- pany's value, as well as to demonstrate that he could formulate and implement innovative strategies for GE on an ongoing basis. While ecomagination grew naturally from GE's strengths in industrial engineer- ing, however, healthymagination would be a bit more of a stretch for GE's employees on multiple fronts.

( )

()

Healthymagination at GE (in 2011)

Healthymagination at GE

ESTABLISHED COMPETITORS

Although GE first entered the health care business in 1915, it did not aggressively expand its presence until the advent of ultrasound technology in the 1980s. By that time, several competitors had already established a formidable presence in the health care market, placing GE at a competi- tive disadvantage. Playing catch-up through a series of acquisitions and joint ventures, GE quickly began competing in all of the primary health care market segments, including obstetrics, cardiology, and general radiology. The company's strategy was deceptively simple: Launch premium medical products based on cutting-edge technologies. By 2010, GE Healthcare had gained envious market positions in most developed countries in the world,30 with $20 billion in assets and $18 billion in annual revenue.31

A NEW BUSINESS MODEL

The healthymagination initiative represented a significantly new business strategy aimed at address- ing the "changing needs and emerging opportunities in healthcare."32 No longer content with sup- plying medical practitioners in develaped economies with high-quality (and expensive) imaging equipment, Immelt viewed healthymagination as a bold declaration of GE's intent to help "revolutionize health care all over the world"33 by addressing three critical needs: lowering health care costs, increas- ing access to innovations, and improving the quality of health outcomes.34 He believed all three metrics could be improved by 15 percent over the next five years. (See Exhibit 6 for the assessment process.) Though grounded in GE's Healthcare division, the initiative would require the active involvement of GE Capital, GE Global Research, GE Water, and NBC Universal, as well as an advisory board of inter- national health care experts. Immelt pledged to invest $3 billion in health care-related R&D, $2 billion in financing, and $1 billion in technology and content by 2015:35

"We will invest in innovations that measurably improve cost, access and quality," Mr. Inunelt said. "That means lower-cost teclmology for more customers, products matched to specific local needs, and process expertise to help customers win. This reflects the new opportunities we see in health care. Our newest innovations-low-cost digital x-ray machines, portable ultrasounds, more affordable cardiac equipment- will save costs for doctors, hospitals, the government, families and businesses. This will help level the playing field in healthcare. "36

By the end of 2009, GE had already validated 24 new products through its healthymagination pro- gram. (See Exhibit 7 for a progress update and Exhibit S for a full list of validated products.) Some, like the handheld Vscan ultrasound and Brivo CT device, promised to make previously bulky and expen- sive diagnostic tools available to primary-care physicians, both in the United States and in developing nations such as India and China. Information technology innovations such as Qualibria (a patient data management system) and Centricity EMR (an electronic medical-records system) were designed to increase the quality and accessibility of medical data, enabling doctors to make better health care deci- sions while simultaneously reducing costs. In yet another example, GE Performance Solutions utilized its AgileTrac software suite to help Mount Sinai Hospital in New York City optimize its processes so that existing personnel could treat up to 10,000 more patients within its current treatment facility. To deepen the innovation pipeline even further, GE created a $250 million equity investment fund to sup- port the development of new companies and technologies consistent with its healthymagination goals.37

Strategy & Policy

Healthymagination at GE

CHANGING MANAGERIAL MINDSETS

While GE's management center at Crotonville, New York, had a longstanding reputation for select- ing and training the best managers in the world, it was not clear how readily they would embrace Imrnelt's new approach to doing business. GE was renowned for being lean and productive, but not necessarily agile and entrepreneurial. Changing long-established structures, processes, practices, and attitudes of the past several decades was a mammoth mission. This would be especially hue at GE, where the prevailing attitude was, "Why do we have to change if we're good?"38

GE's development goal was to get young professionals ready to run a big business by age 30. Training programs that rotated almost 3,000 employees annually kept GE's talent pipeline full. Senior executives spent at least 12 months in training and professional development during their first 15 years with GE.39

Yet recently, Bloomberg Businessweek had run a cover story entitled, "Can GE Still Manage?"40 while The Wall Street Journal reporter Evan Newmark wondered "whether GE's management still possesses superior skills and capabilities. "41 The central question seemed to be whether a formal HR system that originated in the 1950s could effectively equip leaders for the current-day decentralized business envi- ronment, in which the next breakthrough innovation was as likely to come from India or China as from the United States. Mr. Immelt had good reason to wonder whether GE's managers would be able to embrace the highly uncertain environment as the "new normal"42 and respond in brave new ways. Yet he needed the buy-in and support of GE's legendary managers if he was to successfully embed innova- tion in a company long known for its performance culture. 43

GETTING PERSONAL

At the same time that he was asking his employees to embrace a new business modet Inunelt also issued them a more personal challenge. As an employer, GE was faced with health care costs of $2.5 billion a year, covering the lives of 600,000 U.S. employees.44 HealthAhead was implemented as a four-pronged approach to bringing better health to GE's people, thereby reducing the company's own health expenses. The components included health verification of company worksites, wellness pro- grams such as Health by Numbers, and a new consumer-based health insurance program.45 GE also issued a new policy mandating all worksites to be tobacco-free by March 2011, promising lower insur- ance premiums for employees who successfully quit smoking.46

Although promotional materials depicted workers exercising happily, praising the virtues of being smoke-free, and embracing the switch from name-brand to generic drugs, it was not yet clear that this picture accurately portrayed the sentiments of the entire work force. In the same year that GE stock prices took a dive, dividends were cut, and salaries were frozen at current levels, the new health plan (mandated for salaried employees and retirees under the age of 65) levied deductibles as high as $4,000 per year.47 How willingly would GE's employees embrace healthymagination at such a personal level?

GAINING PUBLIC BUY-IN

As with ecomagination, Immelt also sought to engage the public in a national conversation on health care. GE conducted a national survey of consumers and doctors and found significant differences in their perceptions of healthy lifestyles.48 The company then utilized the 2010 Winter Olympics in Vancouver, Canada, as a platform to launch a full-scale media campaign on health awareness, using athletic spokespeople like skaters Michelle Kwan and Scott Hamilton. At the same time, NBC Universal sought to increase its emphasis on health and wellness programming through shows like Today and The

()

I /

()

Healthymagination at GE (in 2011)

Healthymagination at GE

Biggest Loser, while its The More You Know spots targeted issues such as diabetes, strokes, and nutri- tion.49 GE gained additional exposure through the launch of a healthymag£nation homepage, as well as its presence on sites such as Facebook, Twitter, and YouTube. The initial numbers were impressive. In its 2009 healthymagination Annual Report, GE claimed to have made 247 million media impressions and helped facilitate the sharing of 2,225,834 healthy ideas.50 However, it was much more difficult to measure the financial return on this invesbnent.

GOING INTERNATIONAL

Ultimately, Mr. Immelt saw lack of access to adequate health care as not just an American problem, but a global ill. According to the healthymagination website, 1.1 billion people on earth do not have access to clean drinking water, while another 2 billion lack basic sanitation and health care. In Canada, there is one doctor for every 470 people; in China, one doctor for every 950 people, and in Africa, one doctor for every 50,000 people.51 hnmelt's goal was for healthymagination to become a worldwide move- ment that would help to change these numbers. He believed that GE, with its international reach and influence, was in a unique position to foster global cooperation, spur health-related innovation, and leave a lasting impact around the world.

GE already had significant experience in international markets on which healthymagination could build. After the financial crisis plunged the world into a deep recession, GE had started to look even more to revenues from outside of the United States. Because armual growth in emerging markets could be three times that in developed markets,52 Mr. hnmelt had strongly encouraged international sales in areas such as China, India, Turkey. Eastern Europe, Russia, and Latin America. In 1980, GE's revenues outside the United States" at $4.8 billion, constituted 19 percent of total revenues; in 2008, this number had soared to $97 billion and more than half of GE's total revenues. s3 The percentage of GE's sales from the U.S. market had declined from 66 percent to 46 percent just over the first eight years of Immelt's tenure as CEO.

When hnmelt traveled around the world and "looked around the corner," he saw that success in developing countries was a prerequisite for continued vitality in developed ones.54 Yet he also realized that emerging economies presented new and difficult challenges. For decades, GE and other industrial manufacturers had developed high-end products for primary use in industrialized nations and then adapted them for less-developed markets around the world. The world was different now. Economic growth in the United States and other wealthy countries was slowing, while information technol- ogy was increasing awareness of new technologies abroad. However, many second- and third-world nations still lacked the funds and basic infrastructure needed to support the resulting increase in tech- nological demand.

GE had experimented-successfully-with some alternative approaches to doing business in low- income countries. In Kenya, it had established a partnership with a rural educational and clinical hos- pital to conduct research on the need for robust, low-maintenance, and inexpensive ICU I anesthesia products. In China, GE collaborated with the Ministry of Health to create a pilot program for stroke screening, utilizing GE's ultrasound and EKG equipment. Projects in India were focused on providing better neonatal care to both rural and urban communities.ss Information gathered from such initiatives was resulting in a new model of "reverse-innovation," in which products were developed in and for countries in Africa, China, or India, and then distributed globally as well as back at home (see Exhibit 9).s6 Mr. hnmelt believed this strategy would help prevent emerging corporate giants from developing countries from overtaking GE at home and abroad. But such a locally based approach was both time- consuming and more resource-intensive than GE's traditional way of doing business.

Strategy & Policy

Healthymagination at GE

Perfect Timing?

The U.S. health care system was in dire straits at the time GE launched its healthymagination initia- tive. Health care spending as a percentage of GDP had more than tripled in the past 50 years, from 5 percent in 1960 to 17 percent in 2010.57 Some predicted that health care spending would reach 20 per- cent of the U.S. GDP within the next few years, implying that one out of every five dollars would be spent on health care of some sort. Americans had the most expensive health care system in the world, spending almost $8,000 per person annually.58 The countries with the next highest per capita expendi- tures on health care were Canada, the Netherlands, France, Germany, and Sweden, all of which spent between $3,000 and $4,000 per year.59 Sadly, comparisons with other developed countries showed that America's health care system did not provide significantly better outcomes, despite costing a lot more money. The United States fared worse than the OECD average in basic health indicators such as life expectancy, stroke survival rates, and infant mortality.60

The United States was also unique among industrialized cormtries in that it did not have 100 percent coverage for its citizens. Some countries like Britain, Canada, and Sweden had "single-payer" systems in which the public service was supported through taxes. Others, like the Netherlands and Switzerland, required every family or individual to purchase insurance. Analysts estimated that 49 million Americans were without health insurance in 2009, including not just people who truly could not afford it but also people who chose not to buy it. Instead of treating preventable diseases with early care and detection, these uninsured free-riders hrrned up in emergency rooms where insured people and taxpayers were forced to cross-subsidize their expensive treahnents amormting to tens of billions of dollars per year.61 Further con- tributing to the lack of access to health care in America were the insurance companies themselves, which had been allowed to select the safest patients and reject the sickest. This placed an unfair burden on the elderly and the ill who were unable to receive insurance coverage due to a preexisting condition. Even Americans who had health insurance coverage often found it "bankruptingly inadequate" if they became seriously ill or injured.62

After years of acrimonious debate over why these problems existed and what should be done to fix them, President Obama signed the Affordable Care Act into law on March 23, 2010. Its objectives were strikingly similar to those stated by GE's healthymagination program just one year prior: to improve qual- ity, increase access, and lower the costs of health care in the United States. One of the primary provisions was that 32 million of the rurrent 49 million uninsured would be mandated to purchase insurance by 2014. Government subsidies for this expense would be given for families making less than $88,000 a year. In the meantime, small businesses and non-profit organizations could receive tax credits for provid- ing health-insurance benefits to their employees, young adults would be permitted to remain on their parents' plans until they hrrned 26 years old, and a new program was established to preserve employer coverage for people who retired before age 65. A second thrust of the new law was to bolster primary- care services and to place an increasing emphasis on preventive medicine. The legislation also enacted a host of new consumer protections aimed at limiting the power of the insurance companies, which would henceforth be forbidden from dropping people with preexisting conditions, placing lifetime caps on cov- erage allowances, or charging higher rates based on gender or health status.63' 64

Mr. Inrmelt believed that GE was in a unique position to take advantage of the business opportu- nities created by this new legislation. Not only did the company have a penchant for the evidence- based, data-driven, and quality-control operations so desperately needed in the health care industry, but through healthymagination's advisory board, it had direct access to several high-profile health care experts. One of the most prominent was Tom Daschle, who had served four terms as a U.S. sena- tor from South Dakota, as a member of the Democratic Party. He co-authored a recent book entitled

()

Healthymagination at GE (in 2011)

Healthymagination at GE

Critical: What We Can Do About the Healthcare Crisis, advocating for universal health care in America. (Daschle was offered the position of the Secretary of the Department of Health and Human Services in the Obama administration, but withdrew his nomination amid controversy over his income tax fil- ings. 65) GE was counting on the insights and connections of Mr. Daschle and the other advisory board members to guide the development of healthymagination's new products and services and to get them into the health care plans of the future.

However, GE's efforts could be in vain if Congress succeeds in its bid to repeal the Affordable Care legislation, or at a minimum de-fund the program. Critics were quick to point out the significant risk associated with building a business plan around legislation that could be repealed and subsidies that could be withdrawn due to a change in political administration. 66

Back to Its Roots for Future Success?

Immelt knew the next few years would be especially critical for healthymagination-not to mention his career-for several reasons. The economy and GE's earnings were finally starting to turn around, positioning the company for further growth in the future. In July 2010, GE's profits increased by 16 per- cent-making this the biggest increase since the end of 2007. GE Capital's credit losses were decreasing, and health care sales were rising, especially in China and India.67 At the same time, health care needs were as urgent as ever, both in the United States and abroad. The Affordable Care Act promised to create new opportunities for the types of teclmological and process innovations at which GE excelled, and GE had strong relationships with the U.S. goverrunent, at least for the time being. GE needed to make the most of these opportunities while they lasted.

As he prepared to address a cadre of several hundred GE leaders from across the globe at GE's lead- ership center in Crotonville, Immelt found himself wondering whether ecomagination and healthy- magination would be enough to restore GE's former glory. Though up from its all-time low of $6.66, GE's share price had yet to break $20 since the 2008 financial crisis-a far cry from the $60 per share value Irnmelt inherited when he took office. It would take more time and a concerted effort to recover the $200 billion GE had lost in market capitalization. CEOs were supposed to create-not destroy- firm value. While the board had been supportive of his turnaround efforts to date, lmmelt had been at the helm for nearly 10 years with what some considered mediocre results. He wondered how much longer they would be willing to wait to reap the full benefits of his strategic plan.

In the meantime, the calls for further divestment continued. Once considered the "exception to the conglomerate rule,"68 GE's financial premiums had evaporated with the downfall of GE Capital. Immelt himself saw the benefits of maintaining the company's expertise in technology, services, and finance in order to achieve his ecomagination and healthymagination visions, but he was feeling increasing pres- sure to justify his decisions to retain or spin off longstanding divisions as he reconfigured the corporate strategy around those far-reaching goals. He needed to show investors there would be a clear benefit to keeping at least some financial and media capabilities in-house. He also knew it would be challeng- ing to demonstrate that ecomagination and healthymagination were broad enough to create synergy across GE's different business units (see Exhibits lOa and lOb for business-unit financials), yet not so broad that the company would find its resources stretched across too many projects in too many dispa- rate industries. He knew that GE needed to return to its roots in industrial products and services, but sighed as he thought about the obstacles to be faced in the process of getting there. Could he persuade his managers, investors, and directors to continue on this journey with him?

Strategy & Policy

Healthymagination at GE

EXHIBIT lA GE Share Price, 2001-2010

tmmelt Becomes CEO, 9/7/2001

Terrorist Attacks on World Trade Center,

9/11/2001

Global Financial Crisis

$70············........... . ........................................................................................ . $60 ............................................................................................................................................................ . $50 .. $40 ....... . $30 ........................ ~.:;;;,,;;,;.~~~~~~ $20 ........................................................................................... . $10 .................... ..

~-------------------- 2002 2004 2006 2008 2010

I - Daily Closing Prices! Minimum

$6.66 (Thursday, March 5, 2009)

Average $31.37

Maximum $59.88

(Friday, September 8, 2000

Source: www.WolframAlpha.com.

EXHIBIT lB GE Performance Relative to the Dow Jones Industrial Average, 2000-2010

Price History- GE (9/7/2001 -12/14/2010)

9/3/2001 1/6/2003 1/5/2004 1/3/2005 1/2/2006 1/1/2007 1/7/2008 1/5/2009 1/4/2010 12/13/201 .................................................................... .,. ........................................................................................ .., ................................................................... .. 80% ............................................................... , .......... °' .... ,.. .................................................................................... ., .... ,.. ................................................ ..

60%······"·············· ........................................................................................................................................................ ., ..................... ., ................................ .. 40o/o ......................................................................... .., ................................................................ T . ..,.,,,,,IC. 20o/o .............. ·················•·•··•·•··· .. ······ .. ·········· ................................................. ·

0%,.iGK"\.·

-40% ............ . -eoo/o ......................................................................................................................................................... . -80%····"·

-100% -----;:::::==;:::=;::::=;=========;-------I· General Electric Co. • Dow Jones Industrial Average Index j

Source: MSN money (http:/ /money.msn.com/).

( .. )

( )

)

Healthymagination at GE {in 2011)

Healthymagination at GE

EXHIBIT 1C Consolidated Income Statement, 2005-2010 ($in millions, except per-share amounts)

Revenues

---s:~16s:8t 90acts Sales of services

@ffj~r ip~Rln' General Electric Capital Services, Inc. (GECS) revenues from services

: fdt~r'r~y¢ri~~~:i, Costs & Expenses

cost~),~8~as8'91ci : , Cost of services sold lnte~~~i:!~i;6t~~i:({O~ri'W~t charge$ Investment contracts, insurance losses & insurance annuity benefits Prqyi~l:9:Q·r(9f :1p:~_s,e~;9n· -tinanCi_~d- ~~:Gft,iV~b-i~S -: Other costs & expenses Tq-1~:1:'6:~:~~~j~:~fe~e,~:ses Earnings (loss} from continuing ops before income taxes

Earnings from continuing operations

:~~f,~J~-~:~:d9~~);~rom disco'ntlli9~ii':~pera,~-!'Ons :'':,:,-"/-»::-:- - ,"',- _;,, - :

Net earnings (loss) ::l~i'.~'.-~-~f;_~#'./iliOijs att:ri-~J:~~~Je::t;~:n9:r_c_~jlfrolling:-i~tef~St$' Less effect of accounting changes Nel~Wr~tno~ilttriboli!~l~10;1iie'co~pahv Preferred stock dividends declared

-~~B~:~~tn,_nOs attrib_u«;~1e:;tD:~o_ID-th'.~:n-shareOWner$\' Per Share Amounts

'j::;:_:~arQ:i~~f(loss) per,__s,h~r~;do11ii_ri,OJDg_operat_iO~-~~ij:~~ib; _ Earnings (loss) per share-discontinued operations-basic

-'-::-: ~a(~_ing~'.--:(loSs) p~f,::s,:~~-r~~:qpn,(iq Ul~ti :operatfrms~~i1_UtB~ Earnings (loss) per share-discontinued operations-diluted

· <'fi•fear~ings (loss)'Wrshafef~~#ic Net earnings (loss) per share-diluted

'_:-:P_i~!~e,il,rlS declared pe{~har~, -:- Weighted average shares outstanding-basic

- 'JJ\te'ib~~~d average shar~~-:~uiSta~;ding-diluted Year end shares outstanding TOtiil huhlber of emPIOy~~S;'. Number of common stockholders

Source: GE Annual Reports.

2010 2009 2008 2007 2006 2005

•··· ~~b .. a1t \$§5(66a $6~,19011 $.60:~10 $64,297· }5S,837 39,625 38,709 43,669 38,856 36,403 32,752

1,15)> ~';Qp6 1,586' ~1019 2,537. 1,683.

48,623 50,495 68,160 69,943 60, 154 55,970

150,211 ts5l2\'et ;is2,515 172,488'. 163,391 150,242

. 4$,005

25,708

;,1·~~.983

3,012

;7.•\91 · ,_,_, 38,104

·1:l6;003 14,208

(1,050) 13,158

12,179

5o,sW 54i§92 25,341 29,170

1 ~-;~o:~w;::l1:?§:;:2:0~-; 3,017 3,213

37,409 145)2831 ,1631374

9,995 19,141 . i1~8 ;•; .

11,052) 11,143 18,089 .. i:'.182 ):; (lll9)

-~-:;1::-·-

11,225 17,410 (535)i . . : (200) .

l1,64f 11:g~sr 17i,'410 _flQQ) _(_SQQ) ~ $11,344 'F$Jo:z25i $17,335

1.15 1.79 (0.09) (0.02) (0.07)

1.15 .·1i03 .. 1.78 (0.09) (0.02) (0.07) 1.013'' 1:01 1:12 1.06 ---1J!! 1.72 0.46 . •.. 0:\31 ii. 1.24

10,661 10,614 10,080 10,678 .10,615 10,098 10,615 10,663 10,537

287,000 3Q4;900 323,000 578,000 598,000 605,000

47309'''' :.5.il •. 5. 88 •:,,,;/ - 25,816 23,522 23;7~2 .• j9;:!86

3,469 3,214

4,431 ; 3;839 41,089 38,322

145.8~6 faa,771 26,612 24,620 (4;155) (3,954)

22,457 20,666

J24~} .!163

22,208 20,829

g2:208 20,829

$22.208 $20,829

2:21 . 1.99 (0.03) 0.02

.. 21zo .1.99 (0.03) 0.02 2:1$ •.. : 2.01 2.17 2.00

____!d() 1.03 10,182 10,359 .10,218 10,394 9,988 10,277

327,000. :'19,000 607,000 626,000

46,169 20,645 ~5}38

5,474

13:841 36,257

127,524 22,718 (4,085)

18,633

ft,922)

16,711

$16,711

1.73 (0.18) 1.72

(0.18) 1.55 1.54 0.91

10,570 10,611 10,484

316,000 646,000

"' EXHIBIT lD Consolidated Balance Sheets, 2005--2010

CONSOLIDATED BALANCE SHEET

(in millions except per share amounts)

Ass.els Current Assets

Total Current Ass~ts

Financing receivables Net other GEC~ receiVables> Property, Plant and Equipment

Property, Plant and Equipment Net

Goo<] will

Other Intangibles, Net A~~et _from ·fost:or1Ui1ued operati_1iri~-, All Other Assets

Total.Assets Liabilities and Stockholders' Equity CU:frenltia'biUthiS'

Total ·current Liabilities

2010 2009 2008 2007 2006 2005

Investment Securities ;••$': 14,275 · •$.. 9,011 5t,343

16,458 43,938 18,621

41,446 21,411

45,276

22,259 47,826 53, 144

Current reCeiVabres'',ri,fot Inventories Net

P.ropeity, Plant and ,EqUipmeiil.(GEJ··•

Property, Plant and Equipment (GECS)

Les~ Allowance for _d_ep_r~_C.[fltjgn·-:--· __

1s.954 ···'11.4.851· 11,526 11,987 13,674 12,897 11,401 10,474

·~z· ·1so.2.1s •. ·._•i_2<1_.1_18:s ;_••.•_96_,1_63 _·_87_.45_6 _87_.4_8o 310,055 319,247 365,168 376,123 334,205 287,639 : .'a:;~~:1.,:\ ·14,056;, .13,439·•·· JB,514 •·14,767

30,860 12,253 35,242 31,348 79,185 56,717 90,429 88,255

• •. (43,831) ''(47,141) • •• (41,715)

je',63'3 80,801

(45,468)

.39,378 72,355

(44,2051 66,214 68,970 78,530 77,888 74 966 67,528

••. :;.64.4:7:3• :.~~5;q75·' : si;~s!! '''•;il1>11a ,-. -- --- 9,973 tt,75t 14,977 16,142 86,433 8t,726

138,507 t52,525 119,178 13t,737 97,112

••.• :;:.. $751?@'ti2 \$7/lJ,9or. c:s19z,169• '>'$zgs,683 $697,239

4,6,756:

. 87,425 $673,321

Short term borrowings $t t7,959 $129,869 $193,695 $195,100 $172,153 $158,156 Trcide:--~·CCciiJ.f1(J)'iya~·!iL .. -- 14,657 19,527 20,819 21,338 • .21,273:

' """"" '"""""'

Accrued and other current liabilities 11, 142 12,192 12,536 9,885 5,248 4,456 Dividends payable 1,563 ~,340. 3,100 2,878 2,623. All other current liabilities 11,396 13,386 18,220 15,816 18,538 18,419

·1ss,7fc"' ."''l•76,11s \248,610 .. 2~5;239 • · 220,514 • 204,927

,-~">

', . .___./'

;;>

I "' ~ ~·

;; 0

§: "' • ~. • 0 " 0 • a " "'

·~

-----~

'--•

EXHIBIT lD (Continued)

CONSOLIDATED BALANCE SHEET (in millions except per share amounts)

Long-Term Borrowings

Bank Deposits & Non-recourse borrowings oeter:re·ei 'inc'owe--:raxf!§ Investment contracts, insurance liabilities & insurance annuity benefits

All other liabilities

Total Liabilities

Stockholder.•' Eqliity

Total Equity

Total Stockholders' Equity and Liabilities

Source: GE Annual Reports.

Minority Interest in equity of consolidated affiliates

•.. · Pr.eferred Stock (S0,000 ~hares outstanding) .· ·

Common stock (t0,6t5,376,000 and t 0,663,075,000 shares outstanding at year-end 20t O and 2009, respectively)

. Qther R~i~cintap\fa1;,, Retained earnings

Accumulated gains (losses) net

Stockholders' equity subtotal

·•tess tre•s~ry stefck (~toast)··· Stockholders' equity total

Noncontrolling interests

.. ~ ~/

2010 2009

67,358

2,840

29,582

37,402

2,081

3t,64t

2008 2007 2006

ss1Hl6't< ···"3'i:s:o1s · · >260 .so4 '', ',','!,, ,"" ,, ' ;;,;;';;;;;!- ' '

4,584

34,032

t 2;490_

34,068 34,499

2005

212,281.

45,432

77:198' .. i:i'.~5'4, .• , oo:aM ''st,310 47,359 76,964 627,0tB 656,765

702 702

' 36',89Q ''i '· 37,729: t3t ,137 t26,363 . (17,855) . (15,2&5) t50,874 t49,529

31,93JL "32;238 118,936 117,291

~ ·':7,845 t24,t98 t25,t36

684,t57 672,t20

8,947 8,004

702 669

40\39.02 · 2effoo 122,t23 117,362

(2'~il53j '"ll,324 t50,309 t60,459

,•,36,697 ' .. · 36',896;

113,612 123,563

0 tt3,6t2 123,563

.. 5n347 555,934

7,578 8,054

669 669

25,227

107,798 98,117

~· 2,667 144,785 t34,734

' ' 24',893 17,326

t 19,892

·O tt9,892

117,408

_.::_Q tt7,408

$1si;z16 -$7.Bi·ieo1 ·. $791,769 .$795,683 ~97,239., ~

i;: • f ~ il ~- ~

" "'

-.__/

I ~

~ g "' 5· ~ g. , ;>: C1 m

s- ~

Strategy & Policy

EXHIBIT 2A GE's Changing Product Scope

$5.8,

$7.1,

GE Product Scope 2001 ($130 bn)

$11.7,

$58.3,

45%

m Aircraft Engines u Appliances 111 Capital •Industrial Products Materials 111 NBC

and Systems

$16.9,

11%

Healthymagination at GE

GE Product Scope 2010 ($150 bn)

•Energy Infrastructure •Capital Finance 11 Home & Bus. Solutions • NBC Universal ra Technology Infrastructure

Source: GE Annual Reports, 2001 and 2010 (annual revenues in parentheses).

EXHIBIT 2B GE's Changing Geographic Scope

GE Geographic Scope 2001 ($130 bn)

$23.9,

18%

$85.0,

66%

1111 U.S.• Europe IHI Pacific Basin m Americas rn Other

GE Geographic Scope 2010 ($150 bn)

$13.4,

$21.6,

14%

$31.8,

21%

$70.5,

47%

11U.S. •Europe m Pacific Basin

1111 Americas •Middle East m Other and Africa

Source: GE Annual Reports, 2001 and 2010 (annual revenues in parentheses).

()

Healthymagination at GE (in 2011)

Healthymagination at GE

EXHIBIT 3 GE Organizational Chart, April 2010

)

Source: GE website for Investor Relations (www.ge.com).

EXHIBIT 4 GE's Acquisitions, Stake Purchases, and Divestitures, 2001-2010

Year Acquisitions Stakes Divestitures

2010 14 3 '23 2009 8 8 22 2008 31 16 26 2007 32 17 23 2006 40 13 29 2005 22 10 33 2004 34 6 19 2003 33 10 31 2002 48 6 32 2001 45 16 28

Source: www.alacrastore.com/mergers-acquisitions/General_Electric_Company-1006912.

Strategy & Policy

EXHIBIT 5 Results of Ecomagination

2005 Goals

Ooub!fR.&o tp $1.oB'oo."green products" • Work with customers to increase revenues from $58 in 2005 to $208 in sales by 2010 Ff~dm;:B,GE carb_9nJ8,9tprirltby 1°/o

Be transparent and involved

2009 Status

, $1.58 on R&D f6rf§''.e¢o'' products $188 of revenue in 2009; 17°/o growth rate Global engagement

, Reduction (if:~o/o-;;$'~V_e $100 MM/yea_r Founding member of USCAP

Healthymagination at GE

Source: http://wardsauto.com/keydata/historical/UsaSaOlsummary.xls.

EXHIBIT 6 Assessment Process

$68 Investment $38 Healthcare Product/Service, $28 Financing, $18 GE in these Areas

~ Cost Savings ~ Access Improvement

1) Greater efficiency 1) Maternal & infant care •Asset optimization

2) Water & sanitation •Maximize throughput •Reduce diagnosis & 3) Screening for life· treatment variance threatening conditions

2) Therapy decision support 4) Technology to extend

3) Managing chronic reach (remote access and

diseases portability)

~ @}) 3rd Party Validation by Oxford Analytica

• Imagination at Work

.Quality Improvement

1) Reducing medical errors

2) Improving diagnostic capability

3) Remote medicine/ monitoring

4) Early disease detection

@})

Healthymagination May 7, 2009

Source: GE healthymagination, May 7, 2009 {http:/ /www.ge.com/pdf/investors/events/05072009/ ge_healthymagination_overview.pdf).

()

) /

Healthymagination at GE (in 2011)

Healthymagination at GE

EXHIBIT 7 Validation Progress for Healthymagination

( )

Source: GE healthymagination (http:/ /www.healthymagination.com/).

Strategy & Policy

EXHIBIT 8 List of Healthymagination Validated Products

otag'~o~_ii Jechno16~!ies . Adra.Viaw. !. y • •Bri\/oDR'P Digital X'BaY .. Discovery NM/CT5l0c

i•Dis~d~ery Prricf.~QO VCT •g.;scovery CT75gi~~.• • •. i

, ',jn/lova lnte_r~~-~tidila1;f:Ray , ;::,:/:~_,,"/' i. LightSpeed VC~iXt~with ASiB or SnapshotPulse ..• Logiq C5 '-'!:''

riAa Elasfograpliy'I ·· . MRgFus•.·· • i.t•

Dptima ~f66o.t•iJ• Y i · ',' 6<'"'

, _:,:X~nue ~-o"_ ,_(_:::<"::;<-,:;,,-,'::_ -, : ::;,-_ -- --- -, ••voluson Aµrni;ll~teilfechnology • .

1 ;\i\. i · ·

••MAC 400 •i•~ii. ;;i,;. ·• .ii • ••

······i~~~ ~00 •• ·.···.·.r· ;1·11··· ; )\chilies ·•· ·· .•• I: i · ··Lile Support• .. · .. • .n .

En-gStrom,C~re~t~il'.Qti"- •tullaby 1nc~ti~16rxP

Lullaby War~er•i:• i Health care 1r c~~lridty Prac_tfo~lS~h~tM~' --':':;'-:"' ,, " ' ",'.:

•Clinical Decision S~ppSrf tor Diagno~\ic !~aging (CDS·Dl)

:: #gUe_Trac • Home Health

QuietCare

Source: GE healthymagination, May 7, 2009

Healthymagination at GE

(http:/ I www.ge.com/pdf/ investors I events /05072009 I ge_healthymagination_overview.pdf).

( )

()

Healthymagination at GE (in 2011)

Healthymagination at GE

EXHIBIT 9 GE's New Model for Health Care Innovation

Old Way (Sequential)

Innovation I Impact outcomes I

Later thought I Cost+ access+ quality I

Distribution Luminary~ mainstream

+ U.S _,World

Source: GE healthym!lgination, May 7, 2009

New Way (Simultaneous)

Prevent/treat diseases +

Cost + quality + access

Two way innovation (U.S. B World) Pervasive + simultaneous

distribution

(http: I I www.ge.com/ pdf/ investors/ events/ 05072009 / ge_healthym.agination_overview.pdf).

EXHIBIT lOA Revenues and Earnings by Strategic Business Unit, 2005-2010

(In millions) 2010 2009 2008 2007 2006 RevenuOS-;;:'Ji:: '. /, ,,

Energy Infrastructure $ 37,514 $ 37,134 $ 38,571 $ 30,698 $ 25,221 TechnolO~y:J~tra-$-tructure .' • 37,860 . 4i,414 46,3jW 42,801 37,681 NBC Universal 16,901 15,436 16,969 15,416 16,188

Capit?I fina'frc~ 47,040 59,622 6l;OOB 66,301 56,~78 Consumer & Industrial ~ 9,703 11,737 12,663 13,202 Total seti:rrtelit revenues 147,963 155,369 180,601 167,879 148;676

Corporate items and eliminations ~ ~ ~ 4,609 ~ Consolidated revenues •$150,211 $106.783 $182,515 . $172,488 $151,568

2005

$ 21,921

33,873

14,689

49,071

13,040

132,594

~ $136,262

(continued)

Strategy & Policy

EXHIBIT lOA (Continued)

(In millions)

Segment profit Energy' -l'nf r~Stf~-cft.ifS Technology Infrastructure

NBC Unlv~r:sal/, Capital Finance

2010

$ 7,271 6,314

2;261

3,265

coqs~mer' &iJndustrial , , ~ Total segment profit 19,568

cofporai~l(em1 and eil!liina110!1i:,L · (3,s21) GE interest and other financial (1,600) charges

GE provijlpn'Jofi\ncomefa~es'L 1 "' · i . ; (2;024) Earnings from cont. operations 12,623

Earning§(!pss)ltrotn .

~!~~~~ifiue,d-:9'Pe~ations,-q~~;~t, '---:\'.'.'.:(- >(g]g) Consolidated net earnings $11 .644

Source: GE 2011Form10-K.

2009

$ 7,.J05.

6,785

2,464 1,462

' 370 17,986

(2,8~~y· (1,478)

(2,739)

10,943

2008 2007

$ 6,080 f4,~j(' 8,152 7,883

3,131' '•

•i3,\07 i

8,632 12,243 3~5 ; ,, 1,034

26,360 29,084

(2;{}9fo (j;~40)

(2,153) (1,993)

(3;427,) .:.: ' ; l2'7!J4)'' '""i '

18,089 22,457

EXHIBIT lOB Additional Financial Data for Selected Business Units, 2007-2010

(in ml/lions) 2010 2009 2008

Reve~ue~'.>f' $3l,5.14 $37::13!1' ·$38571'·"' ~ Segment Profit $7,271 $6,842 $6,080 Reven~e¥,

Energy( a) $30,854 $30,185 $31,833 OIL& Gas:. 7;561 t.743 7;417.

Segment Profit Energy( a) '$6,235 $ 5';7?2 $; 5,Q67: Oil & Gas 1,205 1,222 1, 127

Healthymagination at GE

2006 2005

$ 3,518 '' $ 13,2.22 7,308 2,919'

10,397

ato. 25,112

fl,,548)',, (1,668)

6,188

3,092 8,414

.~ .. 21,648

(372) (1,319)

r2.5s2r ·.; (Z,ll78J 19,344 17,279

,,"

1,398' / .. •(559)

$20,742 $16,720

2007

$30,698 $4,817

$24,788 6,849

$ 4,057

860

(a) During the first quarter of 2009, GE transferred Banque Artesia Nederland N.V. (Artesia) from CLL to Consumer. Prior period amounts were reclassified to conform to the current period's presentation.

Source: GE 2011 Form 10-K.

() \ !

c )

.. ( )

Healthymagination at GE

EXHIBIT lOB (Continued)

(in millions) 2010

Revenues $37,860 Segment Profit $6,314 Revenues Aviation $30,854 Health Gare 16,897 Transportation 7,561

Segment Prof If

Aviation $3,304

Health Care 2,741 Transportation 3t5

(In millions) 2010

,'Ae~enues , .. $~7.040

Segment Profit $3,625

:::To~a!_;As_Sets $575,908 Revenues CL~'(a) ~18,447 Consumer (a) 17,822

• 'Real Estate ~.744 Energy Financial Services 1,957

· GECAS (a).:::. '. . 5,12i. Segment Profit

CLL (a) . $1,554 Consumer (a) 2,629

'' Real Estate ..

(l,741) Energy Financial Services 367

' GECAS(a) j,195

Total Assets

C.LL (a) • $202;650 Consumer (a) 154,469 Real Estate . ·· 72,630 Energy Financial Services 19,549 GECAS (a) 49,106

2009

$38,517 $6,758

$30, 185 16,015 7,743

$3,923 2,420

473

2009

.. $49,746

$1,462 ·$6il/,707

$20;762 17,634

""" 4,009 2, 117

4,59.f i

$963 1,419

(1,541) 212

1,011>

$210,742 160,494

81,505 22,6t6 48,178

Healthymagination at GE (in 2011)

2008

$41,605 $7,460

$19,239 17,392

5,016

$3,684 2,851

962

2008

• :'$67,645

.. ·~26,856 ..

24,177 . 6,646 .

3,707

4,688

$1,838 3,623

1,144 825

1,140'

$228,176 187,927

85,266 22,079 49,455

2007

$38,339 $7,187

$16,819 16,997 4,523

$3,222 3,056

936

2007

$66,301 $12,243

$26,982 25,054

7.021 2,405

'4:839

$~;787 4,283 2,285

677

1.rn.

Source: GE 2011 Form 10-K.

Strategy & Policy -----·~------------~·------------

Healthymagination at GE

Endnotes

1. "The hard way," The Economist, October 18, 2003.

2. Mark, K. (2008), "General Electric: From Jack Welch to Jeffrey Immelt," Ivey Business School Case.

3. "Peripheral vision: Detecting the weak signals that can make or break your company," Wharton School of Permsylvania, 2008.

4. "Embarrassed Immelt owns up to impact of credit crisis," Financial Times, April 12, 2008.

5. "Immeltdown," The Economist, April 19, 2008.

6. Glader, P. (2009), "GE's Immelt to cite lessons learned," The Wall Street Journal, December 15.

7. McGregor, J. (2009), "Health care: GE gets radical," Business Week, November 30.

8. Glader, P. (2009), "GE's Immelt to cite lessons learned."

9. Glader, P. (2009), "GE to invest in industrial businesses-Cash from NBC deal will help burnish aviation, healthcare and energy units," The Wall Street Journal, December 4.

10. www.alacrastore.com/mergers-acquisitions/General_Electric_Company-1006912; accessed January 6, 2011.

11. Glader, P. (2010), "Live, from New York, GE's moment of truth," The Wall Street Journal, December 10.

12. Ibid.

13. Bartlett, C. A., and M. Wozny (2005), "GE's two-decade transformation: Jack Welch's leadership," Harvard Business School Case, May 3.

14. Ibid.

15. Welch, J. (2001), Straight from the Gut (New York: Warner Books), p. 121.

16. Mark, K. (2008), "General Electric: From Jack Welch to Jeffrey hnmelt."

17. "Fortune's survey lists nation's toughest bosses," The Washington Post, July 19, 1984.

18. Mark, K. (2008), "General Electric: From Jack Welch to Jeffrey hnmelt."

19. GE healthymagination, May 7, 2009 (http:/ /www.ge.com/pdf/investors/events/05072009/ge_ healthymagination_overview.pdf).

20. Schiafo, R., and N. Sullivan (2005), "Talking green, acting dirty," The New York Times, Jnne 12.

21. Camey, Timothy (2011), "Want to know how GE paid $0 income taxes? Think green," Washington Examiner, April 7.

22. GE ecomagination Annual Report, 2009.

23. Schiafo, R., and N. Sullivan, (2005), "Talking green, acting dirty."

24. Ibid.

25. GE ecomagination Annual Report, 2009.

26. Schiafo, R., and N. Sullivan (2005), ''Talking green, acting dirty."

27. GEhealthymagination, May 7, 2009 (http:/ /www.ge.com/pdf/investors/events/05072009/ge_ healthymagination_overview.pdf).

28. http:/ /www.ge.com/pdf/company/advertising/healthymagination-manifesto.pdf.

()

(

Healthymagination at GE (in 2011)

Healthymagination at GE

29. GE healthymagination, May 7, 2009.

30. Inunelt, J. R, V. Govindarajan, and C. Trimble (2009), "How GE is disrupting itself," Harvard Business Review, October.

31. GE healthymagination, May 7, 2009.

32. Ibid.

33. GE healthymagination Annual Report, 2009, p. 6.

34. GE healthymagination, May 7, 2009 (http:/ /www.ge.com/pdf /investors/ events/05072009 / ge_healthymagination_ overview.pelf).

35. GE healthymagination Annual Report, 2009, p. 2.

36. Monegain, B. (2009), "GE's 'healthymagination' tags $6 billion for IT innovation," Healthcare IT News Online; accessed September 07, 2009.

37. GE healthymagination Annual Report, 2009.

38. "Can GE still manage?" Bloomberg Businessweek, April 25, 2010.

39. Ibid.

40. Ibid.

41. "Newshub," The Wall Street journal, April 17, 2010.

42. hrunelt, J. R. (2009), "Letter to shareholders," GE 2009 Annual Report.

43. Crainer, S. (2009), "From Edison to hrrmelt: The GE way," Business Strategy Review, Autumn.

44. GE healthymagination, May 7, 2009.

45. GE healthymagination Annual Report, 2009.

46. Martin, J., (2010), "General Electric to go tobacco-free in 2011: Work sites to be tobacco-free," McClatchy- Tribune Business News, March 4.

47. McGregor, J. (2009), "Health care: GE gets radical," BusinessWeek, November 30.

48. GE healthymagirwtion Annual Report, 2009.

49. "NBCU annonnces new company-wide initiative: 'Healthy at NBCU'; Campbell Soup company signs on as first 'Healthy at NBCU' advertiser; Multi.platform campaign promoting nutritional literacy to launch 2010; 'The More You Know' launches new season of health-themed PSAs, co-branded with GE's healthymagination," PR Newswire, October 14, 2009.

50. GE healthymagination Annual Report, 2009.

51. "healthymagination: Changing the way we approach healthcare around the world," www.healthymagination.com.

52. hrrmelt, J. R., V. Govindarajan, and C. Trimble (2009), "How GE is disrupting itself."

53. Ibid.

54. Ibid.

55. GE healthymagination Annual Report, 2009.

56. Immelt, J. R., V. Govindarajan, and C. Trimble (2009), "How GE is disrupting itself."

Strategy & Policy

Healthymagination at GE

57. Centers for Medicare and Medicaid Service, National Health Statistics Group, 2010.

58. "Heading for the emergency room," The Economist, September 9, 2009.

59. Ibid.

60. "This is going to hurt," The Economist, September 25, 2009.

61. "Heading for the emergency room," The Economist, September 9, 2009.

62. "This is going to hurt," The Economist.

63. ''Signed, sealed, delivered," The Economist, March 25, 2010.

64. "Provisions of the Affordable Care Act, by year," HealthCare.gov; accessed August 31, 2010.

65. "Daschle withdraws as nominee for HHS secretary," Associated Press, February 3, 2009.

66. Katz, J. (2010), "GE returns to its roots," Industry Week, July.

67. Glader, P., and B. Sechler (2010), "GE's earnings rise, ending a losing streak-Profit jumps 16o/o with assist from GE Capital Unit; Conglomerate's revenue declines as industrial businesses lag," The Wall Street Journal, July 17.

68. "Solving GE's big problem," The Economist, October 26, 2002.

() \