Jack Welch and Jeffry immelt:Continuity and change in strategy, Style, and culture at GE<br />PankajUpadhaye<br />NehaKhatri<br />Niati Dixit<br />Shikajain<br />MdZeeshan Farooqui<br />
Introduction to GE <br />Founded by Thomas Alva Edison as EGEC in 1878.<br />Merged with THEC in 1892 to form GE.<br />First formal CEO Charles Coffin 1894.<br />In 1896, General Electric was one of the original 12 companies listed on the newly formed Dow Jones Industrial Average.<br /> Acquired more than 350 companies, including mammoth players like- National Electric Lamp Association (NELA) , reacquired RCA, NBC television network .<br />
GE at present<br />Operates in 100+ countries worldwide<br />300,000+ employees worldwide<br />2009 revenue - $174 billion<br />2009 earnings - $31.4 billion<br />One of original six companies still remains listed after 114 year on Dow Jones index<br />
Who is Jack Welch?<br />1935: born in Salem, Massachusetts<br />1957: BS in Chemical Engineering<br />1960: MS and PhD in Chemical Engineering<br />
Jack Welch<br />1999: Named “Manager of the Century” by Fortune<br />Named one of the three most admired business leaders in the world by Financial Times<br />September 7, 2001: Retired as CEO<br />Published autobiography, “Jack, Straight from the Gut”<br />
Jack Welch and GE<br />1960: Joined GE as a junior engineer<br />10 Years later he audaciously wrote in his annual performance review that his long-term goal was to become CEO<br />1972: Elected GE’s youngest VP<br />1977: Become senior vice president<br />1979: Vice Chairman<br />April 1, 1981: Became the 8th Chairman and CEO of General Electric<br />
Taking Over GE’s CEO<br />Challenges from outside of GE<br /><ul><li>Economic recession
Highest unemployment rate since the depression</li></ul>Challenges from GE <br /> Massive information and inefficient macro-business<br />
Welch’s Vision<br />“A decade from now, I would like General Electric to be perceived as a Unique, high-spirited, Entrepreneurial enterprise…the most profitable, highly diversified company on the earth, with world quality leadership in every one of its product lines”. -- Jack Welch<br />Three-Circle Vision for GE<br />
“Restructuring the Hard Drive”<br />Challenged everyone to be “better than the best”<br />Sold more than 200 businesses and made over 370 acquisitions<br />Insisted GE become more “lean and agile” resulting <br />Delayering: elimination of the “sector” level<br />Downsizing: elimination of about 123,450 jobs<br />Divestiture: elimination of an additional 122,700 jobs<br />Replaced 12 of his 14 business heads<br />
Initiatives - Objective<br />Cut the companies spending on R & D.<br />Work-Out – Group of 50 employees companies policy and process.<br />Best Practices – Involving all employees in the quality process.<br />Going Global<br />Six Sigma - In late 1995<br />E-Business<br />
Passing the Torch<br />Retirement – September 2001<br />Lengthy process of succession<br />Internal candidates only<br />Never named candidates<br />No strategic vision<br />No common measure for candidates<br />Long list of candidates<br />
GE under Jack Welch<br /><ul><li>Welch – a hard task-master.
Surprise visits – a part of his style of functioning.
Under Welch, GE functioned as a true meritocracy.
Promoted the idea of ‘Boundary – less corporation’ at GE.
Jack Welch’s – Theory of Leadership – The 4E’s + P.</li></li></ul><li>Theory of Leadership – The 4E’s + P<br />
GE under Jack Welch<br />Concept of borrowing unpatented ideas from other corporation.<br />Sig Sigma, Demand Flow Technology, Bullet Train Thinking, Quick market Intelligence, etc.<br />Bottom 10% least effective employees were fired.<br />Tendency to jump to conclusions about people.<br />An extremely demanding boss – “What have you done for me lately?”<br />
GE Under Jack Welch<br />Revenues shot up from 28 billion to 129.8 billion (1981 – 2001)<br />
Who was Jeff Immelt?<br /><ul><li>Joined GE Plastic in 1982 (MBA from Harvard University)
Various global leadership positions over year career in GE
GE Electronics, GE Medicals, International Marketing
Elected as CEO to begin tenure in September 2001</li></li></ul><li>GE UNDER IMMELT<br />Release of Annual Report in March 2002.<br />Redesigning of CEO Compensation Package.<br />Acquisition with Vivendi Universal’s American assets value at US$ 14 billion.<br />Invested in various Research centres.<br />Promoted external communications.<br />Cultural shift from performance to customer satisfaction and value <br />
Continued….<br />External Recruitment for senior positions.<br />Diversity in work force.<br />“People Oriented” approach.<br />Establishment of a Commercial Council.<br />“Innovative Break-through” program.<br />Launch of projects ranging from creating microjet engines to desalination.<br />