General Electric (NYSE:GE) is currently the ninth-largest company in the world based on its market capitalization. Yes, it's a massive organization, but GE's management team thinks about size in a much different way today than it did 20 years ago.

When Jack Welch was at the helm, GE needed to be No. 1 or 2 in a given market, or it packed up its bags and abandoned the venture altogether. Today, GE appears to prioritize products and customers over positioning. For shareholders, that's a positive sign of a company on a mission versus one grasping for growth.

GE's "Aha!" moment
In 2001, USA Today published a telling story about the evolution of Jack Welch's thinking as the head honcho at GE. It's worth a read on its own, but for those interested in cutting to the chase, here's the punch line: In their relentless pursuit to move the needle at a giant conglomerate like GE, managers were passing one profitable opportunity after another while chasing market share.

Chummy Ge Employees

Despite its size, GE values a start-up mentality. Source: General Electric.

At the time, size trumped strategy, hands down. And the turbine market served as prime example of this counterproductive behavior.

In the early 1990s, GE decided to forgo the opportunity to provide after-market services for the huge turbines it sold. To managers, this was a ruthlessly competitive niche where GE would be a late entrant. Should they decide to enter, the resulting profits would be small at first, and it could take years to become a player with any serious clout.

This line of thinking was flawed, however, and leadership woke up to this fact by the late 1990s. Shortly thereafter, GE entered the services businesses, and, sure enough, it's turned into a veritable cash cow less than two decades later.

In my opinion, services are absolutely critical to GE's future profit margin growth. From 2011 to 2013, for example, since they represented roughly 28% of revenue but approximately 40% of earnings on average. Talk about a potentially costly oversight.


GE's 9HA gas turbine. Source: General Electric.

Leader of the pack no more?
As we fast-forward in time and look at GE today, investors can rest assured that GE's abandoned its size-matters-most mentality. In his letters to shareholders, CEO Jeff Immelt has lamented those years when bureaucracy hamstrung GE's ability to move quickly and focus on customers. In 2012, he described an ongoing transformation:

We had too many "checkers" and not enough "doers." Visiting with entrepreneurs has helped me focus on complexity, accountability and purpose. I have found two books -- The Lean Startup and The Startup Playbook -- to be particularly useful.

To be sure, GE is no "start-up" today. And one could even argue that its massive scale provides a key competitive advantage in the marketplace. But that's besides the point.

What's more evident is that GE is laser-focused on providing customers with the right products and services instead of fighting over another percentage point of market share. In fact, when it comes to cornering a particular industry, GE's hardly the heavyweight in the primary markets it serves:

Thinking beyond "big"
There was a time during Welch's heyday as CEO when GE's managers were told that they needed to be the biggest fish in every pond. Legend has it that this way of thinking even became part of company policy.

But that's no longer the case according the game plan laid-out in GE interviews and shareholder letters. The days of glorifying megacaps and market share are primarily in the past. And, as the renowned author Malcolm Gladwell points out in his book David and Goliath, that's an outdated way of thinking anyway.

In a recent sit-down interview with The Motley Fool, Gladwell asked a rhetorical question about human nature. With regard to everything from athletes to businesses, he wondered out loud, "Why do we worship size?"

It's a simple comment. And it's simply true in many aspects of life. But I would suspect that speed (and strategy) trump size at the modern-day General Electric.

Why big dividends equal big returns
The smartest investors know that dividend stocks like General Electric simply crush their non-dividend-paying counterparts over the long term. That's beyond dispute. They also know that a well-constructed dividend portfolio creates wealth steadily, while still allowing you to sleep like a baby. Knowing how valuable such a portfolio might be, our top analysts put together a report on a group of high-yielding stocks that should be in any income investor's portfolio. To see our free report on these stocks, just click here now.

Isaac Pino, CPA owns shares of General Electric Company. The Motley Fool owns shares of General Electric Company. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.