What happened

Shares of General Electric Company (NYSE:GE) took off on Monday, rising more than 11% by 10:30 a.m. EDT after its board of directors ousted CEO John Flannery.

So what

GE's board voted unanimously to elect Lawrence Culp, the former CEO of Danaher Corp. (NYSE:DHR), as its CEO and chairman, replacing John Flannery after just 14 months on the job. In addition to that, the board named Thomas Horton, the former CEO of American Airlines, as its lead director. Both men had been members of the industrial giant's board since April of this year.

A man in a suit using his finger to draw an upward-sloping line.

Image source: Getty Images.

GE is replacing Flannery after the company's stock plunged 55% during his tenure. Taking his place is Culp, who created significant shareholder value during his time as CEO at Danaher from 2000 through 2014. Shares of the diversified conglomerate gained 600% during that time frame versus just a 40% return from the S&P 500. Among his many achievements at Danaher was leading it to make several value-creating acquisitions.

GE's deal making, on the other hand, has destroyed shareholder value. One of its biggest blunders was its $10 billion deal to buy Alstom in 2015, a deal driven by Flannery, who was head of GE's business development at the time. That's one reason why the company also said that it would record a $23 billion noncash impairment charge relating to its GE Power business, effectively writing down all the goodwill on its balance sheet from prior acquisitions in the segment, including Alstom. Meanwhile, the company stated that the continued troubles within its power business would cause it to miss its 2018 earnings and free cash flow guidance.

Now what

GE investors seem enthused to be putting the tumultuous tenure of John Flannery in the rearview mirror. They didn't like his deliberate style, which hadn't delivered any tangible results. Culp, on the other hand, stated that he would "move with urgency" to turn the company around, focusing on strengthening the balance sheet in the near term. While it's unclear yet what actions he will take, given his stated desire to move forward quickly, investors likely won't need to wait too long to see his turnaround plan for the company.

Matthew DiLallo owns shares of General Electric. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.