Jack Welch:

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Jack Welch
General Electric (GE) Revolution
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History of GE CEO
1878 Edison Electric Light Co.???????
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1889 Edison Electric ?????????????? Thomson
Houston Co.?????????????????? General Electric
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1960 Jack Welch ??????????????????????????????
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1971 Welch ??????????????????????????????????
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1981 Welch ??????????????????????????????????
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History of GE CEO
1982 Jeffery Immelt ????????? MBA ???
Harvard ??????????????????????????, Area of Sales
Global Product Management
1996 GE ????????????????????????????????? 150
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1997 Jeffery Immelt ?????? President CEO of
GE Medical System
2001 Jeffery Immelt ?????????????? CEO ??? GE
?????? Jack Welch
GEs CEO Jefferey Immelt 2001-Present
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Businessof GE TO BE THE BEST
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• 1.SERVICE

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2.TECHNOLOGY
3.MANUFACTURING
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Fortune 2002 Global Rank
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Jack Welch GEs Revolutionary

• What is Jack Welch theory of Leader?
• How things developed at GE?

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Jack Welch GEs Revolutionary

1. What kind of Company when Welch took over?
2. What are his Leadership styles?
3. What did he do about leading change?
4. What did his approach about leading change?

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GEs Strategic Change

• Under Reg Jones as CEO
• 1930s Financial Budget Planning
• 1950s Profit Center Group Staff
• 1960s PIMS (Profit Impact Marketing
  Strategy)
• 1970s Portfolio Strategic Planning, Strategic
  Business Unit (SBU)
• 1977s Sector and Group Industry

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GEs Strategic Change

• Under Jack Welch as CEO
• 1981-1983 Hardware Change
• Portfolio Management through acquisition
• 1981-1985 acquired over 300 businesses
• 1985-1990 acquired over 700 businesses
• divested over 200 businesses

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GEs Strategic Change

• Under Jack Welch as CEO
• 1981-1983 Hardware Change
• Restructuring into three circles concept
• Core-Reinvest in productivity and quality
• High technology-stay in leading edge by
  acquisition and RD
• Service area-adding outstanding people, create
  new venture and acquisition

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GEs Strategic Change

• Under Jack Welch as CEO
• 1981-1983 Hardware Change
• Downsizing
• 402,000 to 330,000 staff
• Planning staff 200 to 100
• Removing bureaucracy
• Lean organization from 9 layers to 4 layers
• Kill the bureaucracy will free the talent

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GEs Strategic Change

• 1984-1990 Software Change / Cultural
  change
• From radical change to foundation change
• 3 S Culture
• Simplicity -Clear, lean , agile , low staff
• Speed-make decision in minute, face to face
  strategic planning, fast action
• Self-confidence -intellectual self assurance

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GEs Strategic Change

• 1984-1990 Software Change
• 2. Incentive change
• 3. Work-out
• Management Forum for problem solving
• Corporate Executive Council for trust,
  familiarity and mutual obligation
• Best Practice
• Boundary-less integrate diversity
• Six sigma

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Jack Welch Leading Change Approach

• 1981-1983
• Hardware Change
• Structure
• Radical

• 1984-1990
• Software Change
• Culture
• incremental

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GE Jack Welchs Six Rules

• Face your reality as it is, not as it was or as
  you wish it were
• Be candid to everyone
• Dont manage, lead
• Change before you have to
• If you do not have a competitive advantage, dont
  compete
• Control your own destiny or someone else will

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GE 1991 Annual Report

• To Our Share Owners
• 1991 was a tough, terrific year for GE... All our
  rhetoric, our 1980s restructuring and our
  cultural changes were put to their real test when
  much of the global economy settled into a full
  year of steady decline.

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GE 1991 Annual Report

• So how did we do?
• Our revenues grew 3 to over 60.2 billion.
• Our earnings grew 3 to 4.435 billion
• We repurchased a billion dollars worth of our
  stock.
• Total cost productivity grew 4 ..Return on
  equity was close to 20
• And our share owners were rewarded with a 38
  total return in 91, including an 8 increase in
  the dividend.

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GE 1991 Annual Report

• So how did we do?
• Removal of bureaucracy and layers
• Take out Sectors, Groups and other
  superstructure
• Breaking down the horizontal barriers that
  interrupt the flow within and among business
• Create a huge laboratory of innovation an ideas

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GE 1991 Annual Report

• But
• Trust and respect take years to build
• Change is more difficult task and not of us in
  leadership are capable of.

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Jack Welchs Leadership Style

• In our view, leaders, whether on the shop floor
  or at the top of our business, can be
  characterized in at least four ways.
• The first is one who delivers on commitments
  financial or otherwise and shares the value of
  our Company. His or her future is an easy call.
  Onward and upward.

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Jack Welchs Leadership Style

• The second type of leader is one who does not
  meet commitments and does not share our values.
  Not as pleasant a call, but equally easy.
• The third is one who misses commitments but
  shares the values. He or she usually gets a
  second chance, preferably in a different
  environment.

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Jack Welchs Leadership Style

• The fourth type the most difficult for many of
  us to deal with. That leader delivers on
  commitments, make all the numbers, but doesn't
  share the values we must have. This is the
  individual who typically forces performance out
  of people rather than inspires it the autocrat,
  the big shot, the tyrant.

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Jack Welchs Leadership Style
Commitment
Deliver
Miss
First Type onward Third Type second chance
Fourth Type Tyrant Second Type out
Share
Values
Not Share
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GE Values

• GE Leaders throughout the Company..
• Create a clear, simple, reality-based,
  customer-focused vision and are able to
  communicate it straightforwardly to all
  constituencies.

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GE Values (cont.)

• Understand accountability and commitment and are
  decisive set and meet aggressive targets always
  with unyielding integrity.
• Have a passion for excellencehate bureaucracy
  and all the nonsense that comes with it.

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GE Values (cont.)

• Have the self-confidence to empower others and
  behave in a boundary-less fashionbelieve in and
  are committed to Work-Out as a means of
  empowermentare open to ideas from anywhere.

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GE Values (cont.)

• Have, or have the capacity to develop, global
  brains and global sensitivity and are comfortable
  building diverse global teams.
• Stimulate and relish changeare not frightened or
  paralyzed by it. See change as an opportunity,
  not just a threat.

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GE Values (cont.)

• Have enormous energy and the ability to energize
  and invigorate others. Understand speed as a
  competitive advantage and see the total
  organizational benefits that can be derived from
  a focus on speed.

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The End