Jack Welchs Leadership

GEs Two Decade Transformation

Presented By Group
Two

CONTENT
1. GE Overview
2. All About Jack Welch
3. Initiative By Jack Welch
Hardware
Initiative

Software
Initiative

#1 or 2

Fix,Sell/disenga
ge
-Three Circle
concept
-De staffing
Process
-Strategic
Plannng system

Work Out
-Best Practices
Go Global
Develop
Leaders
- Boundary less
Behaviour
- Notion of
stretch
- Six Signal

1. GE- OVERVIEW
Founded - 1878 Thomson Houston Electric Company (THEC)
Merger 1892, Between GE and THEC formed General Electric
Headquaters: Fairfield, Connecticus, U.S
Revenue: US$ 147,300 Billion (2012)

GE CEO (SINCE 1973)

ALL ABOUT JACK WELCH

John Francis Jack Welch, Jr. (Born November 19, 1935)
Alma Maters:
Salem High
University of Massachussets (Bachelor of Science in Chemical
Engineering, 1957)
University of Illinois at Urbana Champaign (M.S and PhD, 1960)

CHALLENGES FOR WELCH

AS CEO
Matching and surpassing the standards set by his predecessor Reg
Jones.
CEO of the year (3 times)
CEO of the decade (1979)
Management Legend (WSJ-1981)

Economy in recession (1981)

Strong Dollar
Highest Unemployment rates

INITIATIVES AND STRATEGIES BY JACK WELCH

CORE
STRATEGY
INTENT

Better than the Best

STRATEGY
Radically restructure the company
over the next five years.

HARDWARE INITIATIVE

#1 OR #2, FIX, SELL OR DISENGAGE

LEAN AND AGILE WORKFORCE

TO
IMPROVE
PRODUCTIVITY
Destaffing process aimed 50% symbolic reduction in 200-person
strategic planning staf
Scrapped the laborious strategic planning system and replaced with real
time planning built around 5 page strategy playbook
A decade from
now, level
i wouldwhich
like
Eliminate
sector
General Electric to be perceived
strategic
control.
as a unique, highspirited ,
enterpreeurial enterprise.. The
most profitable, highly diversified
company on earth, with world
quality leadership in every one of
its product lines

was

We dont need the questioners &

checkers,
pickersof
who bog
previously
thethepeople,
powerfulnit
center
down bureaucracy & the process Today
each staff has to ask, How do I add
value? How do I make people on the
line more effective and
competitive?.

REAL TIME PLANNING

STRATEGY PLANNING

REAL TIME PLANING

Five page strategy Play book

One page answers to five questions
1. Current Market Dynamics
2. Competitors recent activities
3. GEs Response
4. Greatest competitive threat over 3 years
5. GEs Planned response

BENEFIT OF HARDWARE
INITIATIVES
Number of Employees (1985-1989) dropped from (404,000
292,000)
Revenue (1985 -1985) Increased from ($27.2 billion to $29.2 billion)
Operating profit (1981 1985) Increased from ($1.6 billion to $2.4
billion)

SOFTWARE INITIATIVE
For me, the idea is to shun the
incremental and go for the leap.. How
does an institution know when the pace
is about right? I hope you wont think
im being melodramatic if i say that the
institution ought to stretch itself,ought
to reach, to the point where it almost
comes unglued.Remember the theory
that a manager should have no more
than 6 or 7 direct reports?....i say right
number is closer to 10 or 15

Software Initiative
- Work Out
- -Best Practices
- Go Global
- Develop Leaders
- Boundary less Behaviour
- Notion of stretch
- Six Signal

WORKOUT
To create culture of small company and build organisational culture
and management approach to create more openness, candour and
facing reality
None of these meetings were recorded.. So employees dont end
up with more bureaucracy

BEST PRACTICES

GO GLOBAL
Appointing Paolo Fresco as Head, International Operation
Rampart acquisitions
Taking advantage of global economic slow down
European crisis - $17.5Bn
Mexican Peso collapse
Asian economy crisis (1997-1998)

DEVELOPING LEADERS FOR

TOMORROW
keeping close tabs on top 3000 executives
Succession Planning
Improved packages/Stock options
Training institute at Crotonville
360 degree feedback

A PLAYERS

PERFORMANCE APPRAISAL
SYSTEM

BOUNDARYLESS BEHAVIOUR
Removing the barriers among engineering, manufacturing, sales
"We quickly began to learn from each other:
and customer service
Learning from others

Productivity solutions from LIGHTING,

Quick response asset management,
transaction efectiveness from GE CAPITAL,
Cost reduction techniques from AIRCRAFT
ENGINES, Global account management
from PLASTICS"

NOTION OF STRETCH
To set performance targets. Using dreams to set business targets
with no real idea of how to get there
Try to get people think of fundamentally better ways of performing
"Objective was to change the way targets
their work
were set and performance was measured by
creating an atmosphere that asked everyone,
"How good can you be?""

FORAY INTO SERVICE

INDUSTRY
To reduce dependence on traditional industrial products.
Biggest growth opportunity
In-site concept

"We have changed the very nature of

what we do for a living. Today services
account for two-thirds of our revenue"

SIX SIGMA INITIATIVE

Employees were dissatisfied with the quality of its product
GE was operating at error rates 10,000 times the six sigma quality
level of 3.4 defects/million costing $8-12 billion/year
Series of planning, resource allocation, review and communication
meetings were done.
Participation in initiative was compulsory, 40% bonus was tied to it

IMPLEMENTATION

SUMMARY OF INITIATIVES

THANK YOU