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Jack Welch: GE's Two Decade Of Transformation


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It is about Jack Welch's leadership at GE. Initiatives taken by him by which GE became what today it is!

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Jack Welch: GE's Two Decade Of Transformation

  1. 1. GE’s Two Decade Transformation: Jack Welch’s Leadership Mrudang Thakor LOGO
  2. 2. LOGO Content 1. GE- Overview 2. All about- Jack Welch 3. Initiatives taken by Jack Welch “Hardware” “Software” Initiative Initiative • #1 or 2 Fix, •Work Out Sell/Close •Best Practices•Three Circle •Go GlobalConcept •Develop Leaders•De staffing process •Boundary less Behavior •Notion of stretch•Strategic Planning •Six Sigmasystem
  3. 3. LOGO 1. GE- OverviewFounded -1878, Thomson Houston Electric Company (THEC)Merger- 1892, Between GE and THEC  Formed General ElectricHeadquarters: Fairfield, Connecticut, U.SRevenue: US$ 147.300 Billion (2012) Source: Wikipedia
  4. 4. LOGO 1. GE- CEOs (Since 1973) Jack Welch (1981-2001)Reg Jones (1973-81) Jeffrey Immelt (2001- Present)
  5. 5. LOGO 2. All about Jack Welch John Francis "Jack" Welch, Jr. (born November 19, 1935), Peabody, MA Father: Conductor at Boston and Maine Corporation Mother: Home maker Alma- maters:  Salem High school  University of Massachusetts (Bachelor of Science in Chemical Engineering, 1957)  University of Illinois at Urbana-Champaign (M.S and PhD, 1960) Source: Wikipedia
  6. 6. LOGO 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
  7. 7. LOGO Youngest CEO in action… Initiatives by Jack Welch “Hardware” “Software” Initiative Initiative •#1 or 2 Fix, •Work Out Sell/Close •Best Practices•Three Circle •Go GlobalConcept •Develop Leaders•De staffing process •Boundary less Behavior •Notion of stretch•Strategic Planning •Six Sigmasystem
  8. 8. LOGODisciplined Destaffing LEAN Less no. of “We don’t need the questioners & checkers, thepeople, nit pickers who bog down bureaucracy & the process… Today each staff has to ask, “How do I politicsadd value?” How do I make people on the line more effective and DESTAFFING competitive?.” AGILE Making people productive and competitive
  9. 9. LOGO Real Time PlanningSTRATEGIC PLANING REAL TIME PLANING Five page strategy Play book One page answers to five questions 1. Current Market Dynamics 2. Competitors recent activities 3. GE’s Response 4. Greatest competitive threat over 3 years 5. GE’s Planned response
  10. 10. LOGOBenefits by “Hardware” initiatives Number of Employees 404,000 to 292,000 (1981-89) $27.2 billion to $29.2 billion Revenue (1981-85) Operating Profits $1.6 billion to $2.4 billion (1981-85)
  11. 11. LOGO Initiatives by Jack Welch “Hardware” “Software” “By mid 1988 the “Hardware” structure Initiative Initiativewas basically in place. Now it was time to • Fix, Sell/Close •Work Out focus on organization’s “Software”. A •Three Circle •Best Practices company can boost productivity by Concept •Go Globalrestructuring, removing bureaucracy and •De staffing process •Develop Leaders downsizing, but it can not sustain high •Strategic Planning •Boundary less Behavior productivity without cultural change.” •Notion of stretch system •Six Sigma
  12. 12. LOGO Work Out 1. An open discussion forum 2. Employee could give ideas and suggestions Overview on business and get immediate responses to it. 1. To design a process to get unnecessary bureaucratic work out of the system. Objective 2. To create the culture of a small company, where all felt engaged and everyone had voice. 1. Implementation team (24 Consultants) 2. Group of 40-100 employeesImplementation 3. Three day sessions 4. On the spot decision on 80% proposals.
  13. 13. LOGO Best PracticesLearning from Focus more on other how things industries got done Implementation 1. Productivity increaseResults 2. Managers realized the key focus areas of business
  14. 14. LOGO Go GlobalAppointing Paolo Fresco as Head, International OperationsRampant acquisitionsTaking advantage of global economic slow down.  European Crisis- $17.5Bn  Mexican Peso collapse  Asian Economy Crisis (1997-98)
  15. 15. LOGODeveloping leaders for tomorrowKeeping close tabs on top 3000 executivesSuccession PlanningImproved packages/Stock OptionsTraining institute at Crotonville360 Degree Feedback
  16. 16. LOGO “A” Players Energy Excited by ideas and attracted to turbulence Energize Infecting everyone with enthusiasm for idea“A”players Edge The ability to make tough calls Execution Consistent ability to turn vision into results
  17. 17. LOGO Performance Appraisal SystemRank Rating Reward1 Top 10% TOP Stock Options2 15% STRONG Stock Options3 50% HIGHLY VALUED Training4 15% BORDERLINE Improve or Move5 Bottom 10% LEAST EFFECTIVE Weed out
  18. 18. LOGO Boundaryless Behavior Removing the barriers among engineering, manufacturing, sales and customer service. “Learning from others”“We quickly began to learn from each other:Productivity solutions from LIGHTING, Quickresponse asset management, transactioneffectiveness from GE CAPITAL, Cost Reductiontechniques from AIRCRAFT ENGINES, Globalaccount management from PLASTICS.”
  19. 19. LOGO 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 their work.“Objective was to change the way targets were setand performance was measured by creating anatmosphere that asked of everyone, “How good canyou be?”
  20. 20. LOGO 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 fora living. Today services account for two-thirds of ourrevenues”
  21. 21. LOGO 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 with it.
  22. 22. LOGO Implementation Master Green Black Black Belt Belt BeltTraining – 4 weeks Training- 6 weeksImplementation- in statistics, data Full time six sigma5 Months project analysis and other instructors.aimed at improving six sigma tools.Quality. 1. 10Fold increase in life of CT scan X-ray tubes 2. 62% reduction in time at service Results stations 3. 30,000 Six Sigma projects were initiated a year.
  23. 23. LOGOSummary of Initiatives
  24. 24. Mrudang Thakor, MBA (09892734547) LOGO