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Nearly 80 percent of
GE's profits now come from services - up from 16.4 percent in 1980. And a large slice
of those profits are coming from GE Finance - by financing a wide range of services and
products, and not only products produced by GE.
Visit the Milwaukee headquarters of GE Medical
Systems and you get some idea of the scope of the changes. For years it sold CAT scanners,
magnetic resonance imagers and other medical imaging equipment, to organizations like
Columbia/HCA Healthcare Corp. with its 300-plus hospitals. Then in March, 1995, GE
persuaded Columbia to let it service all the chain's imaging equipment, including
that made by GE's rivals. By 1996 GE had added managing virtually all medical
supplies to the deal - most of them product lines GE isn't even in.
Yet that is just the beginning. GE Medical has
spent $80 million building a state-of-the-art training center, complete with a TV studio,
to develop educational programming.9 For fees ranging from $3,000 to
$20,000, hospitals can tune in to live broadcasts on subjects such as proper mammography
techniques. And the company regularly runs management seminars for hospital executives.
Topics include strategic planning, employee evaluations and time management.
Where GE goes today, others follow tomorrow. Since
winning the Malcolm Baldridge National Quality Award, Xerox has been selling its
quality-enhancing skills along with its products.10 At Otis
Elevator, two-thirds of its $5 billion turnover now comes from servicing and maintenance.11
And Dell and Gateway are two companies that have based their growth on superb customer
servicing through staff training.
Developments like this are seen by corporate
"reengineering" guru Michael Hammer as "the next big wave in American
industry".12 They are also forcing companies
to completely rethink their own roles: just what is the purpose of business in a world of
supersonic change?
The company as a learning
organization
"Forget all your old tired ideas about
leadership," says Fortune International. "The most successful corporation
of the 1990s will be something called a learning organization."13
But it will be much more than that. And Bill
O'Brien, Chief Executive of America's Hanover Insurance, puts one of the real challenges:
"Our grandfathers worked six days a week to earn what most of us now earn by Tuesday
afternoon. the ferment in management will
Contents Page Preface
Introduction
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