General Electric has named John Flannery, head of its healthcare division, as its new chairman and chief executive.
He succeeds Jeff Immelt, who has notched up 16 years in the role, a thoroughly impressive stint and in no way diminished by the fact this Mr Immelt’s predecessor, Jack Welch, managed 20 years in the job.
Despite being somewhat eclipsed in size during the last decade or so by tech titans like Apple, Alphabet, Microsoft and Facebook, GE is still America’s 11th biggest company by market capitalisation, with a value of $243bn.
It employs 333,000 people globally, including 22,000 in the UK, where it generates annual sales of $5bn and reckons to be the country’s third largest industrial business.
GE boasts a stupendous history.
Its origins date back to the launch of the machine-moulded electric light bulb in 1892 by Thomas Edison, America’s greatest-ever inventor, while it is the only one of the dozen founding members of the Dow Jones Industrial Average in 1896 that is still in the index.
Over the years, it has been a pioneer in x-rays, television sets, turbines and, using technology developed by Britain’s Sir Frank Whittle, it built America’s first jet engines.
Its activities these days sprawl across power generation, aviation, lighting, healthcare, digital and financial services.
In other words, this is a big beast of the corporate world, making the appointment of a new boss absolutely critical.
By plumping for Mr Flannery, 55, GE is adopting the same tactic – in hiring from within – that it did when Mr Immelt, 61, was appointed.
Mr Immelt had been with GE for 19 years at the time of his appointment; Mr Flannery has been at the company for 30 years, much of that at GE Capital, the financial services arm.
Moreover, like Mr Immelt, Mr Flannery has most recently been running GE’s healthcare division at the time of his appointment, although in Mr Immelt’s day, it was known as GE Medical Systems.
The challenges facing Mr Flannery, though, differ from those of his predecessor.
When Mr Immelt became CEO, his biggest challenge was escaping the shadow of Mr Welch, a man under whom GE was regularly named “the world’s most admired company” and who was described by The Economist, no less, as “the Princess Diana of business”.
During his two decades at the top, Mr Welch – nicknamed “Neutron Jack” for the way he could leave buildings intact while removing the employees in them – took GE’s annual sales from $25bn to $111bn and its annual profits from $1.4bn to $11bn, while somehow managing to keep GE’s unusual spread of businesses together at a time when its rivals were having to focus or break themselves up.
Mr Welch was a brutal boss, firing the bottom 10% of GE’s managers each year regardless of how well the company was performing as a whole, but he got results. GE increased its profits every quarter that he was in charge.
When Mr Immelt took the helm, he was almost immediately forced to manage the business through the shocking aftermath of the 9/11 terror attacks, which not only cost the company’s insurance division an estimated $600m but also battered demand for the company’s jet engines.
Subsequent shocks through which he had to navigate included the financial crisis.
During his time in office, he has remodelled GE, selling its property and consumer finance divisions, the latter of which racked up huge losses during the financial crisis that almost capsized its parent.
He also sold the broadcaster NBC Universal to Comcast, the cable operator, and GE’s appliances business, which was offloaded to Electrolux of Sweden.
Taking their place as having greater strategic value was healthcare, which was pumped up by the 2003 acquisition of British healthcare technology company Amersham for £5.7bn and energy, on which Mr Immelt spent getting on for $25bn in acquisitions.
That latter bet, arguably, has yet to pay off amid the downturn in global energy prices.
Getting the most out of that business will be one of Mr Flannery’s key challenges.
Another will be coming to an accommodation with Nelson Peltz, the feared corporate raider, who has taken a 1% stake in the business and has been agitating for change.
Running GE is a well-paid activity. Mr Immelt took home $27m last year, down from $33m in 2015 and $37m in 2014.
But simply running a business of the size and complexity of GE would challenge most executives.
Wringing growth out of GE’s disparate arms, stepping up the company’s exposure to new technology and proving that its conglomerate model still has relevance in the 21st century will be tougher still.