The CFO Behind General Electric’s Historic Transformation

GE finance chief Carolina Dybeck Happe talks with our Jack McCullough for the latest Secrets of Rock Star CFOs podcast.

GE is one of the most iconic brands of all time. But it has famously struggled in recent years with collapsing profits and a tough stock performance. To turn things around, it announced a massive transformation in late 2021: dividing itself into three separate companies. And a new CFO was helping to lead the charge.

Carolina Dybeck Happe took the company’s finance helm in the summer of 2020–as Covid was raging. Her story since is a fascinating look at how a massive behemoth is remaking itself, and what it feels like to be one of the leaders making it happen. Happe sat down with our Jack McCullough for the latest Secrets of Rock Star CFOs to talk about the changes at GE, what prepared her for the role and the story behind her mysterious LinkedIn photo.

Listen by clicking below. The Q&A, lightly edited and trimmed for clarity, follows.

Listen to the podcast here

Our guest is a true visionary on global financial transformation, Carolina Dybeck Happe. She is with General Electric. Carolina, welcome to the show.

Thanks for having me.

I’ve been looking forward to it for a while. Before we get into the CFO stuff, I want to chat a little about your early background because you are our first guest who grew up in Sweden. I’d love to know a little bit about growing up in Sweden and how that led to being made the CFO of an American iconic company.

If you grew up in Sweden, what you realized pretty early on is that Sweden is a small country, and not many people speak Swedish. If you want to grow, you quickly land abroad and if you land abroad, you do need to speak other languages. For me, from early adulthood, I’ve always had a global experience and appreciation for different countries and cultures. That’s what led me to get my first CFO role in Germany in my late twenties.

That’s interesting. You speak how many languages?

Four. Swedish, Polish, German, and English.

Four is not that impressive. It’s only three more than I speak. Good for you for speaking four. Your first job was in Germany though. That’s interesting.

My first CFO role was in Germany and I was 29 when I got that role. What’s interesting is that I got the spec for that role once I already was in the role. The spec said, “What we need for this is a German, someone with 15 years of experience, and a profound understanding of the industry.” I was Swedish, I was 29, and I came from the tech industry. They must have changed their mind through that process.

They did believe in me and they gave me the chance here to do this. It was a fantastic period in my life. I learned enormously. I learned what it meant to build in a manufacturing environment. It was my first industrial job. I saw manufacturing, R&D and commercial, what worked, and what didn’t work. I also got my first experience in how to build and lead a ton.

Kudos to the management team for being a little bit more open-minded and recognizing the talent you bring rather than checking a series of lists. That is impressive that you went 0 for 3 on the big 3 and yet still ended up with the position. I can’t imagine that there were many 29-year-old CFOs in Germany. Is that fair to say that you had a high level of responsibility at a young age?

I would say that is true. The reality was that there was a lot of transformation needed because this was a group of companies that had been bought by ASSA and there was a need to integrate and transform the companies going forward. That’s what made them pick me.

Aside from speaking four languages, you’re one of the most global CFOs in the world. How many countries have you lived and worked in?

Time flies. I have worked and lived in seven countries. There were also different industries that I worked across. I thought about that I’ve been a large-cap CFO for 13 years. As CFOs, we usually count that in earnings. It’s about 50 earnings, three different companies, seven geographies and different industries.

That’s a great way to put it though. What countries have you worked in over the years?

I started in Sweden. I was in the U.S., Switzerland, Russia, Germany, UK and then back to the U.S.

I believe I stumbled across the fact that the first time you were in the U.S., you were in Santa Barbara, and you went from Santa Barbara to Russia. You do know you’re supposed to go in the other direction. You go from the cold weather cities to the warm weather ones, but you go from paradise almost to a relatively cold part of the world. The rest has been a wonderful opportunity for you.

For me, it’s always been driven by, “What’s my mission? How do I fit into a company and what is the transformation needed?” and being part of driving that transformation. You think about it from a company perspective. I started in different roles and grew through ASSA and then via Maersk, and then I came to GE. I would say ASSA, I grew through that. It was about scaling up and getting into more complex and global environments. That built the tools that I now have in place. When GE came up, it was all about doing the same thing, but faster and on a larger scale but it was also about value creation.

I’m proud of what we created in my previous roles when it comes to value. We look at ASSA ABLOY where we were this traditional industrial company and me going from tech to industrials. You talked about from Russia to the U.S. or doing it the opposite way. It was the same with my career. I started in tech and then I went to industrials. Most people did the opposite. They started in industrials and moved to tech. For me, it was about seeing the opportunities and where the value creation would be. For example, with ASSA, I saw this opportunity of this traditional industry company and how you can move that to a tech-enabled giant with a lot of value creation along the way.

That fascinating. It’s amazing how you’ve had all these roles and each one you took something, learned something, and that each one of them in the aggregate prepared you for the role at GE, which is by far the biggest company you’ve worked at. Is that fair to say?

That is fair.

I want to chat about GE because it’s interesting. Do correct me if I’m wrong, but I believe you are the first outsider who is hired to be a CFO of GE. Is that correct?


Are you also the first non-American to have been in the global CFO seat as well?

I believe so.

I’m curious. I consider GE truly iconic. When I think of the GE logo, it’s as well recognized as Disney, maybe Apple Computer, and one or two more. It is certainly, to me, particularly growing up in the Boston area, one of the most iconic companies in the world. What was that like for you to come in as the first outsider in the CFO world and also not being an American? Did that create some great challenges and opportunities?

With my background, having lived and worked in different companies and countries, for me, that part worked well. If you look at the situation we were in with GE, there was a big transformation and turnaround needed. I know that [CEO] Larry [Culp] and the board were looking at who could be that change agent, and then wanting to combine that with the CFO that was both strategic and operational. Why do I say this is that many CFOs are typically either strategic or operational.

Both are important for them. I also believe that my strong background in decentralization and lean was for me critical guiding principles for transformation. It was also something that the company was very much looking forward to. Coming up with a strong capital allocation track record was also important, considering the situation with the portfolio and assessing what to do where. If you take all of that together, the strategic and operational, the decentralization, and lean, the strong capital allocation, Larry and I have a common background in this area. I do believe that was critical for the job, but also for our partnership in this massive transformation.

It’s interesting because I was going to ask you about your relationship with Larry. There was a study by Accenture a few years ago. It determined that the most important relationship at the C-Suite level was that between the CFO and the CEO. I’m curious what is that relationship. You’re going through together leading what perhaps is the greatest business transformation in corporate history. I’d love to know a little about that dynamic between the two of you, if I may.

It’s different for different people but for me and Larry, I would say the CEO and the CFO are true partners. Together, you build strong teams and alliances. For me and Larry, having that same background was important and helpful, considering the size and the speed needed to drive the digital transformation. If you think about it, you take one example, I talked about this with decentralization. We both had to figure out what the centers of gravity are within GE.

What I mean by that is what are the business units and what does that mean from a P&L perspective? How do you decide from this enormous company that had five segments and five P&Ls, how do you set the businesses up for success? How do you decide what are the right levels of P&Ls? We traveled around together quite a lot, in the beginning, to figure out what the right setup would be. We decided it was going from those five P&Ls to 30 P&Ls or business units. I call them P&Ls as a CFO. Having a full P&L in cash is so important when you’re managing a business. That was a big decision for us.

You’re not a conventional CFO. Everything about you is all about business transformation and financial transformation. You’re a bit of a groundbreaker, and it is fair to say that. How has that served you at GE? The only thing I can even comment on that’s close is back when AT&T was broken up in the ‘90s. Relatively, it’s probably comparable, but how has all that served you in assessing things and making the decision to do the biggest transformation ever?

My background and having done operational CFO roles on a smaller but highly complex scale and having many years of expertise within roles that have grown in both operational and strategic ways have helped me enormously. We talk about capital allocation. Over time, that is truly how you win. We make the right bets there.

Having done almost 200 acquisitions in my previous roles at ASSA and successful integration of those over time has also helped me enormously in understanding what works and what doesn’t work. I do think this about being a change agent and staying agile, being able to adapt to any situation if it’s a country or if it’s an industry, but also if it’s a different team. That is a skillset that served me well.

You have to partner with everyone from the people on the manufacturing floor to the board. Together, drive value creation. Where does it come from? The way I look at it is you have a company and what drives the company is successful innovation. You look at that innovation. That is what’s going to give you growth and you add to that operational discipline on the cost side. That innovation driving growth and creating and generating enormous value for a company gives you the opportunity to invest money in the future. You have a flywheel of value creation and that’s been key for me.

It’s remarkable because the CFO in the modern world is a value creation. It is the vision of the CFO being behind the scenes, reporting what happened after it happened. That’s a bygone era at this point. It’s a value-creation type of role and you seem to exemplify that in a lot of ways. I want to make sure I heard something correctly. Did you say you did 200 acquisitions at one company?

Yes. I would say it was over 16 years but that’s still a lot.

Sixteen years is 192 months. You were doing an acquisition a month for 16 years. Is that about right, more or less?

Yes, it is. You have to think about it from a different perspective once in the company, negotiating yourself with the potential acquisitions. From a segment point of view, running the terms that run the acquisition and then from a corporate perspective, the governance and the approvals on different targets before you agree to an acquisition.

It does give you a lot of experience in how important it is to start with a strategic fit and decide, “Are you the best owner? What are the operational improvements you can make? What are your synergies?” Finding a dual math that works that it’s a win-win. Just as importantly, how do you integrate the company into your existing company? That’s where the value creation happens. You learn to be disciplined and you put up a capital allocation framework that you stick to, which is so important over time, and we did.

A friend of mine who’s done a lot of acquisitions said, “We’ve acquired the company. Now the real work starts.” The point is that the integration is sometimes more difficult than the deal itself. That’s crazy. I want to come back to you. You had an interesting experience. You started GE right at the beginning of Covid. “Welcome to the United States. Now, stay in.” That was challenging timing. In terms of learning about the business and forming alliances, it’s critical for any C-Suite member to form. All of a sudden, that’s a lot more difficult. How did you manage that situation?

My first 100 days, that was a lot on Microsoft Teams, but it was a lot about understanding and getting to know the business. After 100 days, I talked to my husband and my children and said, “Even with Covid, everybody is going to move.” We did. All of us moved across the ocean in the summer of 2020. That was the only way to get close to where the action was and get closer to the people.

I do strongly believe that empowering teams, as well as keeping them accountable is how you’re most successful. This was so important for me. Getting close to the people and being able to build that one-on-one relationship was so important. That’s also how you create an alliance, but you also create people that you can leverage and can then drive the message into the business and have that high impact. For me, having the right people in the right place and making sure that they were empowered with the right tools so they could make those decisions and have the right impact was so important.

That’s why it was also important for me to have the businesses supported by finance out in the businesses. It was a pretty big transformation for GE to move from a more centralized finance team to having finance much more embedded in the businesses with the operating teams so that they could problem-solve together.

What I talked about in the beginning was how it went from five to 30 P&Ls, which also meant that we needed to recruit 25 CEOs, but also 25 CFOs for the businesses. Some were internally promoted, but it was putting those team in place to be able to drive performance where it matters so close to the customer, close to the innovation. That also made people’s jobs more fun. I said to them similar to what you said in the beginning, it’s going to be about making the news, not about reporting the news in finance.

It’s funny, I often use the quote, “CFOs no longer report history. They make history.” Now I feel like you validated that my quote is a legitimate thing to say. Coming from no one less than you, that’s fantastic. You’re right. You mentioned being finance is embedded in the business and there has been the transformation that finance was maybe a necessary evil or maybe they were there to stop things from happening. With that mindset embedded in the overall business, then they become a strategic asset, I imagine.

Very much so. You are there to support where the action is and you can help drive the performance. What was important for those 30 teams with the CEOs and the CFOs was that they would have the right tools so they could drive the impact. They can also measure and see if the actions they are taking are creating the impact they want. If not, they can pivot. It’s a much leaner, closer to the customer action-oriented solution, which also is so important. There’s competition out there, so you have to make the right decisions with speed. That’s how you win.

The right decision slowly is not the right decision is what it boils down to. It’s cool. I want to chat with you a little bit about GE. It is going through a transformation and being divided into three parts. Can you give a little overview of each of the three parts of the new GE or the three new companies?

What we’re going to have is GE HealthCare, GE Aerospace and GE Vernova. We’ll have three independent investment grid public companies. All three leaders in the different industries. If you look at the size and the scale of the businesses, it’s stunning. If you look at healthcare, 2 billion procedures per year are done with GE technology. If you look at aerospace, three out of four commercial flights globally have GE engines. GE Vernova is the name of our energy businesses. We talk about the energy transition. A third of the electricity that is generated in the world is generated with GE technology. Enormous impact in enormously important industries yesterday, today and tomorrow. Incredibly exciting times for all businesses.

GE itself is so big that it’s cut into three ways, and each of the three companies is still gigantic and individually significant in the global economy. One of those companies, we all grew up with. Everybody in the world is a customer of GE, it seems, even if it’s the light bulbs or whatever. Why is right now the opportunity to do a transaction of this nature? Why at this moment in history is GE going to be splitting into three different parts?

You almost have to take a step back to set the stage of where we were because that brings us to the rationale of splitting into three companies. When I joined, the end game wasn’t clear, but what I did know was what my mission was. My mission was to fix the balance sheet, fix financial performance and operating performance, and find a solution for maximizing value.

When I joined the opening balance, my opening balance with the balance sheet was we had $140 billion of debt with near-term maturities. We also needed about $20 billion in cash to run the businesses. We were much more than what we were generating. By the way, speaking of cash generation, I talked about how I joined and Covid hit. Covid eliminated the demand for our best business, which was aerospace services because that’s based on how much you fly.

To give you a perspective, that was more than 100 percent of the company’s free cashflow that was generated there. With that as the backdrop, the question was, “What do we do?” You had immediate concerns, midterm challenges and longer-term goals. We had to start with immediate concerns, start working on the midterm challenges and also keep in mind the long-term goals. We had to develop as we improved on the financial performance as we improved on the balance sheet, and then how we could find what would be the maximum value for the businesses.

It started with what were the customers’ needs, other stakeholders, shareholders, employees and even suppliers, and figuring out what would be the optimal solution. As we improved the balance sheet, we took out more than $100 billion of debt. We improved the financial performance by more than doubling earnings and generally much more free cash. That gave us the opportunity to land in three separate global leaders’ investment grade and public companies with healthcare, energy and aerospace. As you said, it’s already created significant shareholder value. We have the potential to do much more.

It seems like the world has embraced this change that you’re leading, fair to say?

Yes, which is truly exciting to say as well. There’s more to that.

We look forward to that. In your role, you’re focusing largely, I would assume, perhaps even exclusively on preparing these three companies to be solid, standalone, publicly traded types of companies. Is that your exclusive role or you’re doing some traditional financial leadership roles above and beyond that and how do you balance all of that?

I’m focused on the transformation and the separation into three companies. The first one is healthcare, which we already did early this 2023. We have the second one which is going to separate energy from aerospace in early 2024. If you look at where we are, I would say this: Our biggest challenges are clearly behind us.

I talked about fixing the balance sheet, improving the financial performance, as well as setting up the strategic direction for the company as we separate into three businesses. With that, there still is a lot of work technically to separate the businesses going forward. We set up a huge PMO at the beginning of this process with two of my teams leading it. Probably 80 percent of the work that needs to be done for the spins is done by corporate finance and IT. I’m working with the teams to deliver on that.

If you take that in perspective, we’re talking about thousands of legal entities across the globe. We have about 130,000 people moving entities. We’re also separating all the assets and liabilities in the tent from the different balance sheets. By the way, we also have more than 200 ERPs that we’re separating, not to mention the other applications. Still a lot of work on the technical separation then.

It’s crazy. It’s funny that the former accountant in me, you never outgrow it, but when you’re talking about that, I’m thinking, “What are the accounting and legal fees involved in that to do this thing?” But cool. It’s interesting because I don’t believe that there’s any precedent for a deal like this. It’s not like you can read a blueprint or follow a path forged by others. I mixed my metaphors there, but hopefully, it made the point, what’s the experience been like? It’s not like you can call somebody and say, “What did you do when you were faced with this?” Nobody’s done this. What’s that been like, learning as you go and creating a history? Do you think other people follow your path?

For me, having had the experience of scaling with complexity and global, and also having done a spin with EAON in Germany when I was on the board, this is at an even bigger scale. Once you have done it and you know what the drivers are, you just do it on a larger scale. We also have a strong team that is delivering on this in corporate finance. That’s another important part.

You talked about fees to others. For us, a lot of this has been done in-house with the corporate finance team and with history and all the transactions, we have a highly skilled team that is focused on this. I say that because it’s also important that not the whole company focuses on the spin because then you can come in what some people call spin limbo.

For us, it’s been important to separate and say 95 percent of the company is focused on BAU, Business As Usual, serving the customers, delivering innovation and doing it in an effective way. A 5 percent is focused on the spins but out of those 5 percent, the biggest part of that is corporate finance and corporate DT. It’s been key to keep it like that so that you have the right people focusing on the right tasks and you can continue to deliver in the businesses while at the same time executing on probably the largest transformation in corporate America.

By the way, BAU somehow, I live to be as old as I am, I had never heard that phrase before, so I’m going to be stealing that from you. Thank you for that. The company is well prepared because historically, GE has been known for many things. One of which is GE Finance. You’d put GE Finance as good as and better than any company in the world. When you look at other companies, the GE CFOs, GE Finance alums, or CFOs at so many other companies, I’d put the GE alumni database against any grad school, Wharton, Harvard, Chicago, Stanford, MIT Sloan. You have, at your fingertips, some of the best financial professionals on the planet. I’m sure that helped.

That’s why we could do a lot of this in-house as well as delivering. I remember a team member said to me, and he meant this with love, he said, “This is a bit like brain surgery for finance.” I like that expression.

That’s probably a pretty good analogy. One of the things you shared with me, Carolina, is when you talk to people, you share the fact that you work at GE. They don’t necessarily know that you’re the CFO of GE, they only know you work there, but even people who don’t work for the company are thrilled to see the success that you’re experiencing. A lot of your colleagues feel terrific that GE is back on top of the world, so to speak. What must that be like for you on a personal level?

That’s been one of the best parts for me. When I joined GE and met people, we were in a different situation. Already then, I can tell you that everybody was rooting for us. Everybody also had a personal story about GE. When I said, “I work for GE,” they would then say, “So did my dad or my sister. I grew up next to a GE factory. I used the products.”

Everybody has a relationship with GE, and it’s been clear that everybody wants us to win. They were rooting for us already then. Now, when I meet people and we’re in different situations and we are winning, people are so happy for us. People internally are thrilled to be in this situation because who doesn’t want to be part of a winning team? Now, they are again.

It’s such an important company. Like those people you’ve met, I had an uncle who graduated high school at 17 or 18 and retired at 65. I don’t think he worked anywhere but GE during his entire career. There are so many stories like that, of careers and lives affected by the company. I’m sure there’s a great sense of pride that it is back to its former glorious position.

I do want to get back to your own background because, by reputation, you are somewhat of a digital visionary. It’s not the coding, but you have figured out how to use technology as a competitive advantage. How do you see technology impacting financial leadership in the years ahead? AI is probably the big thing. We can talk about that or other trends that you’re seeing as well.

Starting in the tech world, my earlier years were formative and made me a digital believer for life. I continue to believe that. If you look at ASSA, how we moved the company from a traditional industrial company to mechanical solutions to electromechanical solutions to digital and SaaS solutions, that was an enormous transformation of a company. Different type of transformation, but still a transformation. For me, being responsible for it and driving the digital part of that was incredibly fun and rewarding. I’m still a believer. You asked about AI and what that can do. What I see with my background in driving lean and digitization, I almost compare it to what the Industrial Revolution did for manufacturing jobs.

We all know from history, if we look at what happened, how the work we did on the manufacturing floor, how that was impacted through technology, and how it massively improved safety, quality, delivery and cost, and made the jobs more fun. I believe the same thing will be true with AI for office workers. We will improve the quality, the delivery and the costs. What I see is that how we do things changes dramatically, but it also means that the jobs we will have will be much more fun and much more about writing versus reporting.

We’re experiencing the equivalent of the Industrial Revolution for office workers. I’m going to steal that from you as well. I’m such a thief. I wanted to chat with you particularly because more than almost anyone, you have a true global vision and an understanding of the global world and how it affects business. We’re getting used to maybe living in chaotic times, CFOs and other executives, but never more so than in 2023. Do you have any advice for other financial leaders or business people in general on how you can prepare for living and working in a global economy that seems to always be chaotic? It doesn’t seem it’ll ever be 20 years of normalcy like we had for a while.

You’re right. There isn’t a shortage of global issues or issues that impact our businesses. It can be hard to focus on the day-to-day and make progress in the long term. We had all of that internally, so we had to fence it all. We did the short-term and the long-term in parallel. I do think it’s about making sure that you focus on what’s critical and that you decide or make sure you know what you have to deliver, follow up on that, and pivot as you go. That is what happens when you have a lot of change. You have a plan, and you work with that, but then you also pivot as things develop.

This is about staying agile and open to change and working in an environment like that, I do think that is critical, but I also think that it’s even more important now that you feel that your company has a purpose and that makes you proud and happy about working there and also makes you want to go that extra mile. I feel that with where we’re at GE when I talked to you about the healthcare, the flight and the energy transition, it certainly is there and it also makes me feel connected to the global economy in an almost unique way.

It’s interesting. One thing Covid shifted for people is that where we work isn’t just where we work, obviously the paycheck’s a paramount thing, but people want to feel connected, like somehow they’re working for a company that’s making a positive impact on the overall globe. It’s a positive change. You’re fortunate to work in an organization like that. I have one final question. You may know I have 30,000 LinkedIn connections, including you. You have by far the best LinkedIn photo of any of my 30,000 connections. You’re wearing a fighter pilot outfit. I’d love to know if there was a story behind that.

There certainly is a story behind that and it starts around the corner here in Boston. I was up in Lynn, our factory where we have the Aerospace Defense Team. We were there for an operating review. We were going through the business and we were also going through the manufacturing. As I was passing the different cells, I saw one of the cells with a Swedish flag on it. The team told me then that this is where we are manufacturing the engines for JAS Gripen, the Swedish fighter jet.

After that, I talked to Tony, our team leader there, and then I connected with the team at Saab and one thing led to another. When I was in Sweden over the holidays later that year, I got to go lean shopping and have a full-day experience, including flying a Saab Gripen. It was amazing. I’ll tell you that. You’re at 30,000 feet. You have G-forces of up to seven, and you’re flying at supersonic speed. It was truly amazing. I even got to steer through a loop. It was a fantastic experience. The whole experience from the morning, everything from the fitting, the trial, also running different tests, it was so good to see the team and the passion of the team but then also, taking the flights.

I would’ve passed on the flight. I would’ve chickened out. I give you congratulations on that, but that is so cool. It wouldn’t have happened had you not noticed the Swedish flag. That’s fantastic. Have your eyes and ears out. Anyway, Carolina, this has been a fantastic conversation. I’m sure our audience learned a lot from you. I want to thank you for being a guest on the show and if you have any final words, we would love to hear them.

Thanks so much for having me. I wanted to say that it’s been a true blessing to be part of the GE transformation. It’s such an iconic company. I’m so happy that we have come as far as we have and I’m sure that this is just the beginning of the three companies for the next 130 years.

We’ll get together in the 130th year. I’ll be almost 200 then, but that’s cool. Thanks, Carolina.

Thank you.