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General Electric- The company and Its great Leader- Jack welch


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General Electric- The company and Its great Leader- Jack welch

  1. 1. We are GEWe are a high-tech infrastructure and services company with the benefit of a financial services engine. By- AkashTyagi| Akshay Kalley 1 11/ GE Nordic region / We Are GE 9 October 2012 Feb 2011
  2. 2. GE – a global innovator since 1878• The history of GE begins in 1878 with founder Thomas Alva Edison.• The General Electric Company was founded in 1892.• The first carbon filament light bulb was invented 1879.• Focus on Generation , Distribution, and use of electric power to become.• Diversification – Power Generation , household appliances, lighting andaircraft engines, medical systems and diesel locomotives 2/ GE Nordic region / 9 October 2012
  3. 3. Value of the GE Brand!!! 4th most valued brand 3/ GE Nordic region / 9 October 2012
  4. 4. Should GE preserve the CHANGE behavior in future? 4/ GE Nordic region / 9 October 2012
  5. 5. GE’s Values and VisionValues - Imagine, solve, build and lead - four bold verbs that express what it is to be partof GE. Their action-oriented nature says something about who we are - and should serve to energize ourselves and our teams around leading change and driving performance. Vision Statement: ‘To become the most competitive enterprise in the world by being number one or number two in every business in which we compete.’ • What to Do? • What to watch out for? IMAGINE • Values SOLVE • How to • Everyone comply? • Beliefs • Everywhere • Integrity What to • Everyday • Right Steps. know BUILD LEAD Responsi Ethics bility 5/ GE Nordic region / 9 October 2012
  6. 6. GE’s Timeline : Continuous Change • Highly Centralized • Tightly Controlled 1930’s • Decentralization trend setters • Delegating to layers 1950’s • Profitless growth • Corporate strengthening 1960’s • Strategic planning systems • Major reorganization • 43 SBUs- 10 groups, 46 divisions and 190 depts. 1970’s • Strategic planning induced high centralization. • Ready for Change again? 1980’s 6/ GE Nordic region / 9 October 2012
  7. 7. GE’s Leadership Gurus 7/ GE Nordic region / 9 October 2012
  8. 8. Reg Jones “The Management Legend”: 1970’s Strategic Planning • SBU’s to Macro• 43 SBUs business Results supporting • Benchmarking agglomeration Strategic planning. Strategic planning sectors. • Sales doubled• 10 groups, 46 systems. • Improved govt. from $10 bn to divisions and 190 • Unable to manage 43 relations. $22 bn. departments. strategic plans due to • Earnings: $ 572 high level Centralized centralization. Delegation mil to $ 1.4 bn. Structure 8/ GE Nordic region / 9 October 2012
  9. 9. “Replacing a Legend with a Live Wire” 9/ GE Nordic region / 9 October 2012
  10. 10. Jack Welch “The Livewire”: 1981 - Present • 1935: bor n i n Sal em M , assachuset t s • 1957: BS i n C i cal Engi neer i ng hem • 1960: M and PhD i n C i cal Engi neer i ng S hem • 1960: Joi ned G as a chem cal engi neer E i • 1972: El ect ed G youngest VP E’s • 1979: Vi ce C r m of G hai an E • 1981: 8t h C r m and C of G hai an EO E 10 / GE Nordic region / 9 October 2012
  11. 11. Challenges in 1981… External Factors Internal Factors Results HIGH INTEREST BUREACRACY AND MASSIVE SIZE & SLOWING US RECESSION RATES/ STRONG SLOW DECISION INEFFICIENCIES GROWTH DOLLAR PROCESS 11 / GE Nordic region / 9 October 2012
  12. 12. Launching the Rocket: “Better than the Best” 12 / GE Nordic region / 9 October 2012
  13. 13. Stage 1: Fix, Sell or Close Invest in R&D toAdd outstanding stay on thepeople -> leading edge.contiguous SERVICES TECHNOLOGYacquisitions. GECC Information Industrial electronics Construction & Engineering Medical Systems Nuclear Services Materials Aerospace CORE Aircraft Engines Lighting Major Appliance SUPPORT Motor OUTSIDE Ladd Petroleum House wares Transportation Semiconductor Central Air Conditioning Turbine TV & Audio GE Trading Co. Utah Mining Construction Cable Equipment Mobile VENTURES Power delivery Radio Stations Calma Reinvest in productivity and 13 / GE Nordic region / quality. 9 October 2012
  14. 14. “Neutron Jack’s Policy’s” Fix, Sell or Close (Sold 200 businesses and acquired 370.) “Lean and agile”. Fast Vision: Become Operating Profits “Real time Lean and De-staffing (50% planning” decision1 or No. 2 no. rose from $ 1.6 Agile reduction in (answer 5 Strategic making competitor in simple $ 2.4 bn. bn to planning staff) its industry. questions) Remove Bureaucracy “Varsity team” 14 / GE Nordic region / 9 October 2012
  15. 15. Second Stage: Rebuilding solid foundationsBest practices Going global Developing Leaders• Speed, simplicity and self- • Flexible planning for each • Realigning the skill set and confidence. BU. mindsets. Training leaders.• Work Out- Openness, • Businesses are global not • Good people are GE’s key cultivating ideas, companies. assets. “I own them, you Innovation. • Promoting joint ventures just rent them”.• Get everyone involved. and capturing acquisition • Developing KRAs, goals and• Focus shift- From “What to opportunities. honest feedback 360 How”. • Int’l revenues at $ 42.8 bn degrees.• Developing effective (doubled in 5 yrs). 50% of • Overhauling salaries, stock processes. business outside US by options and bonus. 2000. • Best place to work. • Trainings, Measuring leaders based on “living GE values”. 15 / GE Nordic region / 9 October 2012
  16. 16. The Third Wave: “The People’s Manager” Boundary less Stretch Service orientation behavior• Focus on Integration the • Setting BHAGs (big hairy • Helping the Customers win. diverse GE portfolios. audacious goals). • 60 % profits comes from• Openness and sharing of • Keeping forecasts intact but services. ideas and resources. focus on stretch targets. • Push for Product services.• Removing barriers. • No accountability for • Participate in more of food• Equal opportunity – no BHAGs but rewards for chain. group labels. achieving them. • Supplement slow growth• Removing blockers and • Bigger than WORK OUT: products with added-value rewarding Idea Sharing not problem solving and services. just Idea creation. achieving next level. • e.g. “In Site” for medical • Don’t punish failure devices. concept. Improving • Services council to thought process. exchange ideas. 16 / GE Nordic region / 9 October 2012
  17. 17. End of an Era: Do not miss the point “Do It” • Internal dissatisfaction- highly involved employees. • Changing the DNA of the company with Quality at SIX SIGMA centre (30000 six sigma projects). • Biggest initiative in GE’s history. • Improve growth, productivity and employee satisfaction. Keep up the Spirit: Do It • Continue upgrading quality in organization. • A plus company: A players- individuals with vision, leadership, courage and energy. • Respect and reward the best. VITALITY CURVE • Performance based appraisal- 1s, strong, highly valued, borderline and least effective. • No place for Least effective. Corporate council- All A’s 17 / GE Nordic region / 9 October 2012
  18. 18. EFQM model- European Foundation for QualityManagement Enablers Results People People results Policy Customer Key Leadership and Processes results Performance Strategy results Partner Society ships results Innovation and Learning 18 / GE Nordic region / 9 October 2012
  19. 19. EFQM-Leadership enabling excellence Leadership requires managers: • to develop mission, vision and values; • to be role models of a culture of excellence; • to be personally involved in developing, implementing and improving the organization’s management system; • to be involved with customers, partners and representatives of society; • to motivate, support and recognize people in the organization. Policy and Strategy People Partnerships and Processes Resources Revenues & market Employee stock Globalization Best Practices share options (360° Feedback) Portfolio management Work Out Training and Stretch development Delayering Session C Boundary less Six Sigma Organization 19 / GE Nordic region / 9 October 2012
  20. 20. Jack’s “Total Quality Management” See changes as Create a learningLead and manage opportunities and culture and involve less, live speed. get ideas from everyone. everywhere. Energize others and Satisfied Articulate your Big. Be Small is Respect people Customer leads team play, Cultivate face, Simplify and and grounded to develop Stretch and instill to long term Behave like a small get less formal. big. think ownership. success. confidence. company. Eliminate Have fun, live Follow up and get boundaries, put quality andrid of bureaucracy. values first and Innovate. cultivate leaders. 20 / GE Nordic region / 9 October 2012
  21. 21. BCG- Diverse Portfolio Matrix Relative Market Share High Low TV’s Market Growth Rate High Central Air GE Financial Conditioning Question Star Services NBC Radio Marks Networks Lighting GE Medical GE Appliances Cows Systems Dogs Aerospace Low GE Plastics 21 / GE Nordic region / 9 October 2012
  22. 22. DeterminantsGE/ McKinsey Matrix • Size • Market Growth, Pricing • Market Diversity • Competitive Industry Attractiveness Structure • Industry ProfitabilityDeterminants High Medium Low • Technical Role•Size High Selective Harvest for • Social•Growth GE GE Grow GE • Environment•Share Financial Harvest or Construc cash Plastics Penetrate tion • Legal Investment generation Business Strength•Position Services•Profitability • Human•Margins GE Medium•Technology GE Segment & Consum Invest for Aero Controlledposition Medical selective er•Strengths/ growth space Harvest Electroni Systems InvestmentWeaknesses cs•Image•Pollution Selective Controlled Air NBC•People GE Rapid Exit Investment/ Exit or Dis- Conditio Radio Lighting Low Divestment ning Investment Network 22 / GE Nordic region / 9 October 2012
  23. 23. Growth in GE’s Service Business 1980 1990 1995 Services 15% Services Product 45% Services 45% Product 55% 55% Product 85% 1998 2000 Product Product 25% 33% Services Services 75% 67% 23 / GE Nordic region / 9 October 2012
  24. 24. Walk The Talk-Jack Welch •Welch never pretended that all his ideas were original but he was very adept in fine-tuning the ideas of others and then conveying a very simple message. • Welch was not afraid to dispense with people, plants or entire businesses – especially in his earlier years at GE. Session C Work Out Nearing Retirement Hiring Stars •Travelled a successful company andWelch’s stress He took Jack was the first transformed it intoPersonally one of the world’s mostone to speed up bimonthly to admired organizations. hiring A towards reviewed the Crotonville Training and keeping up stars was his progress of • Famous quote: “I wasnt smarter answer to center to impart the spirit even in that anyone else, but top company’s I lectures and his post operation dumbness. He executives to helped 270,000years. He kept the me look smarter than most.” and people make interact with team. believed “If I am nurture enthusiasm and the smartest develop future raised the bar for person in the leaders. others. room, I wont listen to others at all. ” 24 / GE Nordic region / 9 October 2012
  25. 25. We recommend- A2A ”Access to all” Leadership Direction Issues: Opportunities: •How do people see the parent Mental Maps •Do the parent and business see company? the same opportunity? •How does parent interact with its •Does the parent have the businesses? characteristics to create value? •What is the cost to the parent •Are there issues with key Consistency company? success factors? Feedback Parenting Functions, Central structures and Services and processes resources Coherence Direction Horizontal coordination between Organizations common the Parent and SBUs. aims, including Vision and Feedback Mission. Arrangement where learning takes Consistency place all the time at all levels Vertical translation of common aim between Parent and SBUs Decentralization People and Skills Contracts 25 / Coherence GE Nordic region / 9 October 2012
  26. 26. Every 2 seconds, a GE-powered aircraft takes off. 26 / GE Nordic region / 9 October 2012
  27. 27. Each day, GE entertains and informs more than ahundred million people. 27 / GE Nordic region / 9 October 2012
  28. 28. GE Healthcare technology helpsdoctors save nearly 3,000 liveseach day. 28 / GE Nordic region / 9 October 2012
  29. 29. GE power generation equipment creates aquarter of the world’s electricity every day. 29 / GE Nordic region / 9 October 2012
  30. 30. GE Capital provide credit to helpcompanies grow and people reach theirdreams. 30 / GE Nordic region / 9 October 2012
  31. 31. References:We used the Power point template from one of the available GE presentation on Nordicregion.For videos: 31 / GE Nordic region / 9 October 2012