GE

"This strategy rested on three key tenets: 1. Anders, borrowing a page from his former GE colleague Welch, believed General Dynamics should only be in businesses where it had the number one or number two market position. (This was strikingly similar to the Powell Doctrine of the same era, which called for the United States to only enter military conflicts that it could win decisively.) 2. The company would exit commodity businesses where returns were unacceptably low. 3. It would stick to businesses it knew well. Specifically, it would be wary of commercial businesses—long an elusive, holy grail–like source of new profits for defense companies."

"The company found that Lean manufacturing, and productivity in general, worked best in companies with steady growth, neither high nor low. As Jack Welch at GE realized in his early days with Six Sigma, the ideal unit volume growth cadence for rising productivity is somewhere between 4 and 6 percent. A higher rate can work but requires putting a lot more capital in place, often at a lower return. At its best, Lean and other productivity tools allow a company to add 2 to 3 percent of manufacturing capacity without adding equipment, people, or footprint—it’s “free” capacity. With intensive, but not usually that expensive, up-front training to implement Lean, a growing manufacturer can therefore supply 2 to 3 percent more revenue with limited extra cost. The result is a higher ROI on the factory assets."

"The history books miss one critical component of GE’s success in that time period. By the mid- to late 1980s, GE was becoming a cash flow machine. Welch taught managers to fixate on every detail. From the productivity of the factories to every contract term, they emphasized cash flow. And that cash flow allowed for five large bets on future growth: (1) air travel, (2) gas-powered electricity generation, (3) global healthcare expansion, (4) television advertising, and (5) financial services."

"“The story about GE that hasn’t been told is the value of an informal place. I think it’s a big thought. I don’t think people ever figured out that being informal is a big deal.”"

"When I joined Sylvania in 1955, there were already twenty or thirty companies engaged in the semiconductor industry, which could roughly be grouped into two categories. The first category was large companies already in the electronics industry or closely related to it. At that time the largest electronics businesses were radios and televisions, but the computer industry was about to emerge. Companies in this category included GE, RCA (Radio Corporation of America), IBM, Motorola, Sylvania, Sperry, and so on."

"At AB InBev, as at GE, losing a top talent (a 4) is a sin, and there’s a company-wide goal of top talent retention."

"Informality is not generally seen as a particularly important characteristic in most large institutions, but it is in ours. Informality is more than just being a first-name company; it’s not just a sense of managers parading around the factory floor in suits, or of reserved parking spaces or other trappings of rank and status. It’s deeper than that. At GE it’s an atmosphere in which anyone can deliver a view, an idea, to anyone else, and it will be listened to and valued, regardless of the seniority of any party involved. Leaders today must be equally comfortable making a sales call or sitting in a boardroom: informality is an operating philosophy as well as a cultural characteristic."

"Under Welch, GE had used its triple-A credit rating to borrow on the cheap, lend to riskier borrowers at higher interest rates, and pocket the difference. “I thought it was easier than bending metal,” Welch once said. The world’s most valuable corporation at the start of the millennium was soon needing government-backed infusions of cash. At its worst point in 2009, GE’s market value fell below $90 billion, a loss of around 85 percent."

"It became clear quickly that the teams at GE were frustrated by having to go through five or six layers of approval to get anything done. Plus, the people in charge of signing off didn’t really understand the business or the problem. Suddenly a culture of second-guessing had emerged throughout the organization."

"My first entrepreneurial opportunity came when I was around twelve years old. GE’s small appliance division in Bridgeport was unloading hundreds of small, broken radios that had been returned for various reasons. The price couldn’t be beat: $1 apiece. Using money from the paper route, I bought the surplus radios. Using Dad’s equipment in the barn, I repaired the radios on nights and weekends and sold almost all of them for $4 apiece—a 300 percent profit!"

"The solution, as I saw it, was to create strategic business units that could operate independently in terms of decisions and budgets within the conglomerate. GE previously had defined departments and divisions based on size, and they were bloated."

"As that feeling swelled, I went to have lunch with Jack Welch, the chairman of GE, which owned NBC. He was deeply unhappy with the network’s performance. It was a disaster, and I thought it would be fun, even exciting, to try to turn it around. And Jack was encouraging, as he was toying with the idea of selling it. I wondered if I could raise the necessary money, but quickly realized I couldn’t pursue that while being an employee of one of its competitors. The truth was I couldn’t pursue anything without quitting Fox, without being independent. But that prospect frightened me into inaction. How could I turn from my exalted position to standing out in the cold without the protection of a big company behind me? The very thought froze me."