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Predicting industry consolidation and deconsolidation Building a strong post-merger integration competency I Maintaining primary focus on GE s core business despite a high volume of M&A activity I Structuring and using the Board of Directors as an effective Endgames sounding board Welch anticipated the consolidation of the medical systems, plastics, and aircraft engine industries (to name a few) well ahead of his competitors and forced GE to become the consolidation leader in each He also recognized that the mining industry had reached the Balance and Alliance Stage and divested it before its financial performance and market valuation dropped off again well ahead of any competitor Finally, Welch reinforced the Endgames strategy across GE by insisting that any GE business unit be the number-one or -two competitor in its industry or be sold off Most of the time, this strategy led to anticipating Stage 4 Welch also empowered his senior line managers to fully integrate newly acquired businesses into the GE business model The acquired companies were fully assimilated into GE; from day one, their primary focus became the business success of GE s core business The only time Welch negotiated special concessions in an acquisition, he regretted it Following the acquisition of the investment bank Kidder Peabody, the investment bankers were reluctant to be fully integrated into the GE Capital business model What especially irritated Welch was that the bankers felt they were entitled to hefty bonuses even when their financial performance came in below their commitments Welch tolerated the Kidder differences until a 1994 insider-trading scandal involving the head of its government trading desk, Joseph Jett At this point, Welch put in GE executives to manage Kidder and fully integrate it into GE Capital Finally, Welch relied heavily on his Board of Directors for advice



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For certain disks, the menu command to convert the disk to dynamic is unavailable in Disk Management. For more information, see Disks That You Cannot Convert to Dynamic later in this chapter.

The Cable Multiple System Operators (MSOs)

You can convert basic disks to dynamic at any time. In most cases, you do not need to restart your computer to complete the conversion. However, you must restart the computer if the disks you are converting contain any of the following volumes:





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System volume The system volume contains hardware-specific files such as Ntldr, Boot.ini, and Ntdetect.com. These files are needed to load Windows XP Professional. These files cannot reside on a GPT Disk. Boot volume The boot volume contains the Windows XP Professional operating system and its support files. The boot volume can be, but does not have to be, the same volume as the system volume. Volumes that contain the paging file The paging file is a hidden file on the hard disk that Windows XP Professional uses to hold parts of programs and data files that do not fit in memory.

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and insight on potential acquisitions In a number of deals, Welch counted on his Board to establish contacts with acquisition candidates, as well as act as a sounding board for the strategic rationale for buying them He also chose or recommended potential new Board members in part based on their ability to introduce GE to acquisition candidates or ideas in new industries

When you convert MBR disks that contain the system, boot, or paging file volumes to dynamic, you are prompted to restart the computer two times. You must restart the computer twice to complete the conversion.

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As shown in Figure 12-2, the Disk Management snap-in identifies these volumes in the graphical and disk list views. If you have a combined system and boot volume that also contains the paging file (the most common scenario), only System is shown.

Figure 12-2 How Disk Management identifies separate system, boot, and paging file volumes for an x86-based computer

As we often hear, There s the good news, and then there s the bad news In cable, the good news is that cable MSOs are taking two-thirds of all broadband data (ISP) customers and own two-thirds of the broadband consumer market In fact, three out of five of the largest broadband providers are cable companies

In this chapter, we examine what CEOs must do to successfully carry out an Endgames strategy and the new onus placed upon the Board of Directors to manage the Endgames execution The most important issue for a CEO and a Board of Directors to realize is the inevitability of Endgames consolidation The reality is that every company in every industry will go through the four Endgames stages or disappear Some industries may consolidate faster or slower than others, and one Endgames stage may last longer than another, but Endgames consolidation will happen Period Although the beauty of the Endgames model is its promise as a predictive tool, this potential will be realized only through strong execution by the CEO and the Board of Directors Senior leaders must always be aware of where their industry and company lie on the Endgames curve and plan their strategies accordingly The key question, then, becomes how the CEO and the Board should react to and lead through Endgames consolidation dynamics Our research reveals that the skills required from a CEO vary according to a company s position on the Endgames curve From Stage 1 through Stage 2, CEOs must drive aggressive growth and lead their industry in consolidation: brute force, bold leadership, and vision are key success factors In Stage 3 through Stage 4, however, CEOs become more like master chess players: careful planning, anticipating competitors strategies, identifying and implementing a mega-merger, and mastering portfolio management become paramount

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