GE retools management structureto improve customer response

Vendor cuts layer of middle management

GE Medical Systems has overhauled its sales and marketing organization,cutting out an entire layer of management and introducing a strategicmarket segment concept to augment the company's traditional focuson modalities. The reorganization was prompted by the need toget closer to customers, according to Paul Mirabella, vice presidentand general manager of sales.

"We need an organization to be fast-moving and very, veryresponsive to what customers need, without filters or unnecessarylayers," Mirabella said.

The Milwaukee-based company previously used a geographicallyoriented organization that included zone managers who interacteddirectly with customers and reported to regional managers, whoin turn reported to general managers. The new plan, in effectsince early June, establishes a series of managers to whom thesales reps report. The reps usurped the regional managers' titlesheld by their bosses.

"It is a significant name change in that they now behaveas a business unit, the same as the previous regional managers,but they work directly with the customer," Mirabella said.

These 22 newly assigned regional managers report directly toMirabella, as do 12 other managers. Several of the others arecharged with market segments that are application-specific, suchas cardiology, women's health and oncology.

These segment managers must look for opportunities that involvethe integration of several modalities. For example, cardiologyholds opportunities for sales of nuclear medicine, cardiac catheterizationand ultrasound. The manager of that market segment works withthe managers of modalities such as x-ray, ultrasound and nuclearmedicine.

The cardiology segment will allow for the future addition ofMR, which GE is developing as a one-stop shop for cardiac evaluation.

Not all opportunities will arise in applications areas, however.The new GE structure acknowledges that reality with the establishmentof segments such as installed-base marketing, new growth initiativesand integrated marketing programs.

"Because our installed base is so huge, we also treatthe installed base as a market segment," Mirabella said.

Three general managers are included among the dozen executiveswho report to Mirabella. They wear three different hats, fittingthree areas of responsibility:

• Each is oriented toward certain modality areas, where theyserve as chief distribution liaisons within the modality;

• They have geographic duties, with each responsible for strategicdeals and accounts in a third of the nation, divided into east,southeast and west regions; and

• They help transfer process management techniques to thelower managers.

The changeover to this new organizational structure has beengreeted by excitement at GE, but the company also has some concerns.

"You enter into these things with a lot of confidence,because you are (building) them and you know what you want toaccomplish," Mirabella said. "But there is also a littletrepidation, because it could be overwhelming if the transitionis not handled right."

GE staff apparently have risen to the challenge with a doublingof business from May to June, Mirabella said. Although that riseis not entirely attributable to the organizational change, Mirabellais happy with the apparent effectiveness of the reorganizationin meeting initial goals.

"We are getting a lot of high-level resources, all theway up to John Trani, involved in every aspect of the business,"Mirabella said. "Response is relatively instantaneous."