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“GE’s Imagination Breakthroughs: The Evo

Project”
CHRISTOPHER A. BARTLETT
BRIAN J. HALL
NICOLE S. BENNETT
 General Electric (GE) is an American
multinational conglomerate incorporated
in New York.
 Headquartered in Boston.
 Founder: Thomas Edison
 Business Type: Public
 As of 2018, the company operates
through the following segments:

 Aviation  Additive manufacturing,


 Healthcare  Venture capital and finance
 Power  Lighting
 Renewable energy,  Transportation
 Digital  Oil and gas
 SEGMENT INVOLVED:

 Transportation (locomotive business)

 CHARACTERS INVOLVED:

 GE’s Chief Executive Officer (CEO), Jeff Immelt.


 GE’s Chief Marketing Officer (CMO) of Transportation, Pierre Comte.
 GE’s Chief Executive Officer (CEO) of Transportation, John Dineen.
 Head of Transportation’s locomotive P&L unit, Brett BeGole.
 GE’s Ex- Chief Executive Officer (CEO), Jack Welch.
 Difficulties faced by CEO:

 On Friday, September 7, 2001, 43-year-old Jeff Immelt became GE’s ninth


CEO.
 Four days later, two planes crashed into the World Trade Center towers.
 Faced changing environment, economic recession and decreasing
revenues.
 Immelt did not have an easy initiation as he tried to deal with the resulting
economic downturn.
 GE’s profits on revenues had declined 3% from the prior year.
 Immelt said,

“This was not a great year to be a rookie CEO.”


 Efforts made by EX-CEO, Jack Welch:

 Under Jack leadership, GE had generated a total return to shareholders of


23% per annum for 20 years.
 $380 billion increase in shareholder wealth over his two decades as CEO.
 Welch had built GE into a disciplined, efficient machine that delivered on its
promise of consistent growth in sales and earnings.
 The results were achieved primarily through a continuous stream of timely
acquisitions and clever deal making.
 This two-pronged approach had resulted in double-digit revenue and profit
increases through most of the 1990s.
 Immelt’s Efforts:

 Immelt knew that he couldn’t follow the same strategy.


 The environment in the new millennium had changed too much.
 He wanted to use GE’s size and diversity as sources of strength.
 He wanted to drive growth by investing in places and in ways that others could
not easily follow.
 He began to articulate a strategy that would rely on:

 Technology leadership.
 Commercial excellence.
 Global expansion.
JACK WELCH Jeff Immelt
(Process Oriented) (Marketing Oriented)

 Effective Operations Management  Organic Growth – Given Top Priority

 Timely Acquisitions  Technology Leadership

 Clever Deal Making  Commercial Excellence

 Financially Based Strategies  Global Expansion, Marketing Driven

 Efficiency Driven  Long Term, Research-Based Approach to his Task.

CEO Jeff Immelt is Transforming GE From a Process Oriented Company into Marketing Oriented
Company
 Changes made by Jeff Immelt:

 LEADERSHIP::

He found out that five leadership traits would be key to driving organic growth in
GE:

 An external focus,
 An ability to think clearly
 Imagination and courage
 Inclusiveness and connection with people
 In-depth expertise.
 CULTURE:  R & D:

 Norms and Practices.  Invested in Research and


 Encourage Risk-Taking. Development (Global Research
Center in Shanghai New York)
 HR Practice:

 Slow Down Job Rotation


 Recruit/ Promote Externally
 Adjusted Reward and Evaluation
Process
 To deal with Economic Downturn, Jeff Immelt Launched Innovative products,
which is a new Locomotive, answering different needs and requirements of
market and the environment.

 Beginning in 2002, he challenged his business leaders to identify new growth


platforms.

 Growth initiatives were taken by Jeff Immelt in his locomotive business  He


named the new Innovative projects as “Imagination Breakthroughs.” (IB’s)
 What is IB?

 8% Organic Growth Target

 Marketing Led

 Fully Integrated

 Potential to generate $100 million in new business within 2 to 3 years.

 One of his IB’s Project was “THE EVO PROJECT” (Evolution Locomotive)
 GE Transportation identified its 5 potential IBs.

 Most exciting was “Evolution Locomotive”.

 North American Rail Market – 1918.

 AC 4400 long-haul locomotive – the most successful engine on the


market.

 In 1995, introduced the “Super Loco” – AC 6000.

 The most Powerful locomotive (size and hauling capability).


 After an year of its launch, North Americans reported the capabilities of
AC6000 were unnecessary and un-economical.

 Losses.

 Unfortunate market readings.

 Failed to deliver the cost benefit performance.


 Carbon emission cut offs

 Applicable after January 2005

 Major serious challenge for locomotive industry

 Encouraging fuel efficiency and emissions


 Evolution Locomotive incorporated a locomotive control system
enhancement that managed the speed and to minimize fuel
consumptions and emissions taking account terrain, track conditions,
train dynamics and weather without negatively impacting the train’s
arrival time

 Technically advanced
 AC 6000 Failure coupled with the looming change in EPA regulations in the
industry put the locomotive industry under intense pressure.

 EVO – a make or break project.

 Customers wanted the solid evidence of the benefits of the product.

 “Need Marketing to get a price” , ….. Immelt.

 Marketing group’s analysis, rising oil prices, increased rail traffic, and
tightening emission standards could make customers more open to Evo’s
Benefits
 GE regained the market

 70% shares

 Success continued into 2007, surpassing records in one


year

 Evo had become a poster-child success story


 John Dineen became CEO of GE Transportation (2005)

 Annual corporate growth playbook process that’s have growth council


in which monthly review of growth initiative in each of transportation
business discuss by management team

 They have Objective more growth from IB old line and mature portfolio
of businesses
 Slow growth domestic markets already dominated by GE

 Dineen emphasized the opportunities for international expansion

 Challenge of breaking global locomotive market to sell internationally

 Take decision about no standardized locomotive (Gauges width,


weight limits etc varied by country)
 Investment in engineering major cost barrier

 Government were operator of railways and selling process involved


complex political negotiation

 Tim Schweikert General Manager of Locomotive developed a product


concept (Global Modular Locomotive)

 And presented this idea monthly growth council


 Objectives:

 To reduce the response time in international tender processing



 To reduce the amount spent on nonrecurring engineering

 To reduce the time between order and sale

 GML approved as an IB
 Dineen assigned Gokhan Bayhan as a marketing leader for the
Locomotive Unit

 Bayhan had already worked on Locomotive modernization contract that’s


GE had won to rebuild 400 Locomotives for the state-owned railway in
Kazakhstan its best place to explore GML potential.

 They had opportunity for GE to help them expand their railway system to
meet the needs of Kazakhstan fast growing china trade
 Sales, Engineering and Marketing worked together to test and
approve the GML Concept

 In December 2005 company received an order 300GML Locomotive


from the Chinese railway
 Dineen Announced the Pierre Comte as a chief marketing officer of GE
transportation in may 2006.He had strong commercial background, an
international career, relevant industry expertise and strong enough
personality to deal with P&L leaders

 The role of marketing group is to push P&L Leaders to revisit their


portfolio.

 Under Comte the new marketing team have a active role in the business
 In April 2006 Locomotive Management Team have a presentation at
transportation growth playbook session 1 review.

 Initial ideas behind the GML Concept were beginning to seem questionable to
resolve the concern commissioned a “Tiger Team” of six people from
engineering, product management and marketing and gave them two weeks
to recommend changes about the GML Concept
 Gokhan Bayhan assembled data on customers, competitors and market
trends

 Bayhan Presented a rich picture of critical, technical and quality elements


that’s customers were demanding

 After two weeks analysis the Tiger Team had a conclusion that’s the GML
Concept too complex and too expensive to serve the market efficiently
 They proposed that GML Modular Approach replaced by platform
concept in which five different families of Locomotives would serve
90% of the global market demand

 Three of the five platform developed upon EVO Engine

 The Tiger Team recommendation were presented at transportation


growth council
 Dineen backed their recommendation by committing to invest in development
engineering required for Global Locomotive Families

 With strong Analysis and data to support the team proposal a clear commitment to
invest in it ,the New GML Concept quickly accepted and became one of
transportation's official IB

 Soon GE received an additional large order from a mining company in Australia and
before year end it won a tender for 40 more locomotive in Egypt

 China Effect drives a big surge in demand for all forms of transportation. Around the
world GDP is growing, globalization thus, GE best understand the customer needs
and respond with a great product
 GE would commit to transferring the assembly operation to Kazakhstan in the second
half of 2008 .This facility become the regional source of locomotive sold to other
countries in the CIS (Commonwealth of Independent States)

 Transportation P&L planned to any new locomotive sales with a service contract to
renew worn components locally rather than replacing them with imported new parts it
save the customer money and bring employment to country

 Management Team of Locomotive began to explore an integrated regional approach


might be a more effective business model than the product based global families
approach

 They grew the marketing staff from 14 to 32 and moving out of Erie where they could
be closer to the customer and they deployed seven regional marketing strategies
 GLF Project into three integrated IBs

 One for China


 One for Russia
 One for India

 Each responsible for driving growth and developing markets for an


integrated package for GE Locomotive, signals and services.
 In December IB Review, transportation business was presented its latest
plans for hybrid Locomotive IB

 They conclude that hybrid locomotive, the right solution for the customer
,for the market as well as GE

 The plans for hybrid centered on diesel electric engine that would capture
the energy in a series of sophisticated batteries and its reducing fuel
consumption to 15% but battery technology was not able to achieve the
proposed customer benefits
 As a result three years into program there is no clear evidence that hybrid
IB would be able to meet any of its original stated objectives

 They suggest that hybrid should join the lapsed IB. All the opportunities
on the product line extension, the opportunity cost for hybrid project was
very high. This option would mean postponing

 GE would have to develop hybrid technology

 They know how customer values can be created through different


segments
 They have potential government funding for hybrid development

 83 IBs approved 35 already launched and generating more than 2 billion


revenue ,so the process of organic growth were established

Each business was responsible for current performance

Hybrid future was tough decision that is must now make.


 https://prezi.com/0-q4rj9gxo_e/ges-imagination-breakthroughs/
 https://www.elkarbide.com/sites/default/files/ge_locomotoras.pdf
 https://www.slideshare.net/simonho8/ges-imagination-breakthrough-the-evo-
project
 https://hbr.org/product/ges-imagination-breakthroughs-the-evo-project/907048-
PDF-ENG
 https://www.hbs.edu/faculty/Pages/item.aspx?num=34629
 https://www.ukessays.com/essays/management/ges-imagination-breakthrough-
changes-in-organizational-structure-management-essay.php
 https://prezi.com/aanvajysfi-p/ge-imagination-breakthrough-evo-
project/?webgl=0
 https://en.wikipedia.org/wiki/General_Electric
 https://www.davemanuel.com/investor-dictionary/stock-market-bubble/