The most diversified company

ge Pictures, Images and Photos In finance it is always said that you need to be diversified. The more diversified the better, in fact. In business, this is true as well but it can come in various forms. GE (General Electric) is a U.S. – based conglomerate. It is truly global and one of the largest companies in the world. When I was younger, I began to notice that in almost every category of every industry GE had a brand or product (I noticed odd business patterns from a young age). It was and still is true today. GE is likely the most diversified company in the world.

Although about half their revenue comes from their financial services, they make everything from jet engines to refrigerators and everything in between. The previous CEO of GE, Jack Welch was and perhaps still is considered to be one of the best CEO’s of all time. His philosophy was that each business that GE competed in had to be either #1 or #2 in that industry and if it wasn’t then they needed to sell it. This is a strategy that is incredibly ambitious and that not many conglomerates can actually follow. He was also known to fire the bottom 10% of employees every year, while rewarding the top 20%. This had the obvious effect of making people work hard and take initiative.

The story of GE is important not only because of its important role in history, but because there are lessons that smaller businesses can draw from it as well. A small to medium business may not be able to sell off an entire division of a company just because it isn’t a category leader. However, it may motivate them to consolidate a few sku’s or product lines and focus on the ones that really have competitive advantages. Looking at how Jack Welch fired people every year with no problem may inspire a manager to finally get rid of that person that is bringing the entire office down and look for some new talent. There are so many lessons that could be learned by studying a company like GE. I think everyone should read up on them at some point.