Siemens restructuring and General Electric

When I was GE Corporate Strategist, I created a number Strategic competitive teams to learn about the key multi-business companies that competed against GE in numerous sectors. These included: Siemens, AEG, Hitachi, Toshiba and Westinghouse. Each team was to create the competitor's corporate plan in the same format as the GE corporate plan.

The CEO at the time was Reg Jones. He used these evaluations to assess the GE Corporate Plan and to anticipate major competitive moves. The teams met quarterly at GE's Crotonville and then gave presentation annually to Reg.

Over the past few decades, GE have moved out of many of its traditional businesses and Welch had little interest in this type of evaluation.

Recently, Siemens has had major problems, including a scandal in its telecommunications business, which forced the resignation of its CEO Klaus Kleinfeld...the new CEO is a GE alumni, Peter Loescher...who has made major moves to streamline the company and improve its earnings. Since Peter held a major executive position in GE's Health care...he continues to use GE to demonstrate that GE has a major earning advantage. Bloomberg reported on November 29, 2007 that Siemens earns $7850 per employee compared to GE's $65,290 per employee. However this may be not a good measure since Siemens is still an "engineering company", which GE is half financial services.


In my book, The Secret to GE's Success, I point out that GE's success includes having the right home grown leaders and talent... this has been a tradition of Siemens as well. Siemens and GE still compete in several markets, including Power Systems and Health care... it will be interesting to see how successful an "outsider" can be in this highly conservative and traditional German company.