How GE Exorcised the Ghost of Jack Welch to Become a 124-Year-Old Startup

Overlooking the Hudson River in Ossining, N.Y., there’s a grassy, 59-acre campus owned by General Electric. It’s an executive training center where the company holds management and leadership classes, some of them led by the chief executive himself. Jack Welch, who ran GE in the 1980s and ’90s, would arrive by helicopter. He’d make his way to a windowless auditorium known as the Pit where a group of managers waited. They used to call him “Neutron Jack,” because he was known for firing so many people that only the buildings were left standing. Neutron Jack and his executives would engage in an aggressive form of corporate group therapy, raising their voices as they aired their frustrations with the company and each other. Later, they would have drinks at the White House, the campus bar. It drove business magazines wild with excitement. “The class sits transfixed as Welch’s laser-blue eyes scan the auditorium?…?,?” wrote Businessweek in 1998.

Today, GE executives—sorry, team members—take classes in yoga and meditation and suminagashi, the Japanese art of painting on still water. The White House has become a low-key place where visitors can sip artisanal coffee rather than martinis. The Pit has a window through which the sun shines.

It’s part of a much larger transformation at GE orchestrated by Jeff Immelt, Welch’s successor as chief executive officer. Most notably, GE is moving its headquarters from suburban Fairfield, Conn., land of golf and bonuses, where it’s been since 1974, to Boston, the Athens of America. The company is selling off its division that makes refrigerators and microwave ovens. Now it’s focused on electric power generators, jet engines, locomotives, and oil-refining gear. And it’s made a significant bet on developing software to connect these devices to the Internet. There’s a term for this trend of adding network connections to hardware not usually considered computers: the Internet of Things. GE believes its opportunity lies in what it calls the Internet of Really Big Things.