top of page
  • Writer's pictureBill Fischer

Revitalizing An Iconic American Market Leader: The Transformation Of GE Appliances

This article originally appeared on on June 29, 2022


Bill Fischer and Annika Steiber


There may be no more iconic American brand than General Electric Appliances. After all, an American President, Ronald Reagan, built a large part of his public visibility selling the very idea that GE played a major role in establishing American progress, spotlighting GE appliances on the General Electric Theatre, which, in the mid-50s, was the third most popular television show in America. According to Reagan, “at GE, progress is our most important product.”

Sixty years later, that tune had changed, and GE was actively seeking out someone to take GE Appliances off their hands. Apparently, the allure of power systems, aircraft engines and commercial financing had removed the luster from good, old, kitchen hardware. No matter that GE’s appliance business had long been the face of GE, in nearly every American home; fast-growing, hi-tech, B2B was where the future was now. Lost in all of this, of course, was that the cash-flows still being generated by refrigerators and stoves, and washing machines, were the energy powering all of these new explorations; somehow even all of that was no longer necessary.

In 2016, after first trying to sell the GE Appliance (GEA) business to Electrolux, only to see the sale disallowed by the U.S. Justice Department, on anti-trust grounds, GE found a buyer in the Haier Group. Haier, well-known for its long-term commitment to rethinking modern, complex organizations, and espousing a philosophy called RenDAnHiYi (RDHY), in order to revitalize work by introducing greater entrepreneurial energy, posed what many saw as an existential challenge to the workforce of the Louisville, Kentucky-based, organization; how would all of this work?

After a fitful first-year, where little progress was made at changing the organization, or becoming more entrepreneurial, GEA, today, represents what has turned-out to be a successful major organizational turnaround. CEO Kevin Nolan has indicated that profits and innovativeness are both at a 100-year high. After many decades of serving as GE’s cash-cow, and playing not to lose, it appears as if the pursuit of progress has returned!

Professor Annika Steiber, who directs Menlo College’s Silicon Valley RenDanHeYi Research Center, has recently undertaken a major study of the changes GEA has gone through to achieve this turnaround, which appear in her new book, Leadership for a Digital World, The Transformation of GE Appliances. She graciously agreed to discuss some of the major findings of her work:


Fischer: Steve Denning has recently reviewed your new book on, and claims that GEA is evidence that “customer capitalism” is flourishing. Can you tell us a bit about how you see GEA characterizing "customer capitalism," and why you believe that it is flourishing at GEA? Is it all about innovation, or are their other forces at play?

Steiber: GEA was already customer-focused before Haier’s acquisition in 2016, but this mainly referred to training in six sigma and becoming 'black belts.' Not surprisingly, in many ways, this ended up with the company still believing in its own ability to figure-out new products and features and being primarily focused on quality costs, rather than passionately trying to understand the unspoken needs of the users and creating new value around such findings. With the acquisition, and a new owner that both expected, and supported, an exponential growth of GEA's business, quality assurance was no longer enough. Instead, it demanded a continuous, passionate search for how to deliver more, and new value to users.

Fischer: In their foreword to your new book, Edgar and Peter Schein, spoke about “the impact of two leaders from dramatically different backgrounds”; can you give us any more insights about how these two individuals, and their teams, actually worked with each other. How would you characterize this relationship?

Steiber: In 2016, both Haier’s CEO and Chairman, Zhang Ruimin, and GEA’s soon-to-be CEO, Kevin Nolan, had felt the need to survive by changing the way the firm operates. In this way, they are alike, even if they come from very different cultures and backgrounds. The relationship between the leadership at Haier and the leadership at GEA was, from day one, based on a) clear expectations and b) respect for local differences and needs. For this reason, Haier's leadership didn't force RDHY on GEA, but rather focused on educating GEA about the new model and how it could support the firm. At the time of experimentation and implementation of organizational changes, guided by the RDHY principles, Haier supported a local adaptation, based on a belief that people locally best know what works locally. The relationship could therefore be characterized as respectful and mature, regarding a deep understanding of the appliance businesses and more generally of change management.

Fischer: What is GEA doing today, that it didn't do while it was a part of GE?

Steiber: To begin, the company formulated a new leading goal to become number one in North America. This was no longer “playing not to lose,” instead, it demanded growth, which hadn’t been emphasized in the past, while the company was relied upon to be a cash cow. Growth, however, couldn't be realized with the existing organization, so GEA had to experiment and implement a new structure, a new decentralized and coaching leadership, a new compensation model, and most importantly a new culture. As part of the cultural change, the role of people also became highlighted, as growth couldn't happen without entrepreneurial people. This led to changes in GEA’s hiring process and further decentralization of decision power to people closer to the problem to be solved, which, in turn, required placing trust in these people. In parallel to these major organizational changes, they increased their investments in digital technologies.

Fischer: How long did it take to affect these changes? Were there any such changes that you would see as being especially challenging?

Steiber: The company is still in a transformation and this process is supported by a leadership that understands that there is no end date. Instead, the company will need to continuously adapt and change to things happening in its environment. At present, GEA suggests that they are in the second phase of their transformation. The first phase, called the microenterprise phase, included everything mentioned before, so the company accomplished a major cultural (including both social and technical systems) transformation in only four years. The second phase is focused on working, and co-creating, with other players, to build dynamic ecosystems and online platforms. Haier, the owner of GEA, went through a similar process, first focusing on their own organization and then developing a new way of creating supply chains to innovate products, and to go-to-market via ecosystems.

Fischer: Edgar and Peter Schein also write, in their foreward to your new book, about “the change equation, where survival anxiety must exceed learning anxiety”, and where “learning energy added to the tailwind of survival anxiety”… how do you interpret this for GEA?

Steiber: For GEA, the survival anxiety was strong in 2016. Many had experienced the company being for sale several times, and the company was not growing. The survival anxiety was particularly strong for the soon-to-be CEO Kevin Nolan, who also had felt for years that the old way of running GEA, under the ownership of GE, wasn't the best way to grow the company. Kevin Nolan's own learning anxiety, and any feelings of hesitation, had been reduced as a result of the time he had spent in Qingdao, and by having access to important mentors at Haier, who didn't force anything on GEA but, instead, discussed with both with Mr. Nolan and other senior leaders at GEA, about the RDHY model- what it means, and how Haier could support GEA's growth. Taking such time to understand, and to learn, was crucial to reducing resistance to change, guided by RDHY principles.

"Learning energy” refers to how GEA's transformation was supported by its leadership, Kevin Nolan, and his conviction, consistency and communication about the necessity of the change. This worked to accelerate the cultural transformation.

Fischer: Haier is frequently in the news regarding its RenDanHeYi philosophy for transformation into an IoT company. To what extent is GEA doing the same thing? What is it doing differently?

Steiber: RenDanHeYi has definitely been used as the north star in GEA's transformation. In addition to setting leading goals, GEA adopted RenDanHeYi’s guiding principle of Zero-Distance to users. This, then, led to the adoption of smaller user-focused organizational units (microenterprises) and a pay-by-user compensation model, through a greater reliance upon variable compensation. Now, GEA is focused on leveraging growth via actively creating, and participating in, dynamic ecosystems and ecosystem contracts, which are key elements of the RenDanHeYi model.

It should be emphasized that in applying these principles, GEA adopts them to fit their local preferences, after having discussed them for months and then adapting them to their own conditions. So, in one way, the GEA Way is unique to GEA, but the principles reflect the same principles as in RenDanHeYi.

Fischer: You speak often of how Silicon Valley has become a “cradle of innovation in management.” Louisville, KY is not Silicon Valley; is it also becoming a cradle of innovation in management?

Steiber: Louisville and GEA have been attracting global talent for years, building a fairly diverse professional community. This is why, following inspiration taken from Chelsey Hotel in NYC and Local Motors in California, Kevin Nolan was able to co-found FirstBuild, in Louisville, which was the first corporate makers’ and co-creation space in the U.S., even before GEA was acquired by Haier. FirstBuild’s spirit attracted the interest of Haier Chairman Zhang Ruimin, when he first visited GEA, as it is consistent with Haier’s entrepreneurial philosophy. This nascent entrepreneurial working style was a vivid affirmation of what GEA was capable of doing and has been more broadly adopted by GEA following the acquisition in 2016. It reassured the GEA community that entrepreneurship was already alive and well in their organization.

Fischer: Can you tell us more about how Haier has been able to attract (or convert) entrepreneurs?

Steiber: Haier set a clear expectations for their employees, as well as their organizational partners, to be entrepreneurial and constantly strive towards higher goals. The microenterprise structure, and the new payment model reflecting market impact, reinforce the fostering an entrepreneurial behavior.

Fischer: One of the most noticeable choices that GEA has made regarding how it implements RDHY, was the decision to not adopt an internal market system, with all of its bidding and competition, as Haier has? Can you explain why?

Steiber:The adoption of each of the RenDanHeYi principles requires local adaptation and sensitivity to what the local culture is ready to assimilate at a particular time. So far, an internal market system has not been adopted by GEA as it doesn’t seen to fit with GEA’s collaborative culture, which is based upon a core of people who have been working together for decades, and who have survived the vicissitudes of GEA’s transition from being a cash-cow to in a conglomerate portfolio to emerging as an independent and entrepreneurial organization, once again.

Fischer: What are the big take-aways from the GEA experience that can be applied to other complex, iconic organizations?

Steiber: I see several big take-aways :

1. The GEA case is evidence that a full-scale enterprise transformation is possible, no matter if the company is mature or iconic,

2. full-scale transformation of an internal organization can be done efficiently in less than five years,

3. a transformation process will never have any true ending date, but is infinitive,

4. in order to be able to do a transformation you need certain pre-conditions such as:

a. a supporting/driving owner/board with an outside-in perspective,

b. a leading goal that acts as a stretch goal,

d. a top leader who is ready to lead the change process and stand behind the transformation,

e. a critical mass of key stakeholders internally that decide to support the change process, (usually, because they are involved in the change process),

f. frequent communication from the top on why the change is necessary and celebrations of small successful steps towards set goals.

Bill Fischer has an ongoing consulting relationship with the Haier Group, owner of GE Appliances.


4 views0 comments

Recent Posts

See All

Evolving Ecosystem Guidance

Bill Fischer This piece originally appeared on the Drucker Forum Blog, November 11, 2022 “Water! Build your organizations

Foreward, Corporate Rebels' Startup Factory

Bill Fischer This originally appeared as the foreword to Startup Factory, Haier's Rendanheyi and the End of Management As We Know IT, by Joost Minnaar, Pim de Morree and Bram van der Lecq, Corporate


Post: Blog2_Post
bottom of page