The ppt reflects upon case analysis of GE during the tenure of Jack Welsh. It identity the leadership skill, competency of Jack Welsh to make GE a successful company

1. GE’s Two-Decade Transformation:
Jack Welch’s Leadership
By- Vivek Rathod
BABM

3. Overview
 Founded
1878 Thomson Houston Electric Company (THEC)
 Merger
1982, Between GE and THEC formed General Electric
Headquarters
Fairfield, Connecticut, US
Revenue
$119.87 Billion

4. Company's Timeline
Founded in 1878 by
Thomas Edison.
Focus on Generation,
Distribution, and use of
electric power
Reg Jones(1973-1980)
GE was benchmark for
others companies
(imitated its SBU based
structure & planning
process).
Jack Welch(1981-2001)
Challenged to be “better
than the best”
Be no. 1 or no. 2 or
close

5. GE – CEO’S
RIG JONES
1973-1980
JACK WELSH
1981-2001
JEFF IMMELT
Present

6. RIG JONES (1973-1980)
Country’s Leading Business Statesman
43 strategic units => to support strategic
planning.
Unable to review and approve massive
volumes of Information generated by 43
SBU’s.
YEAR Achievements
1970 “CEO of the Year” 3 times by
his peers.
1979 “CEO of the Decade”
1981 “management legend” by
THE Wall Street Journal.
” Formed a covering on GE’s
departments, divisions, groups and
SBU’s with “SECTORS”

7. JACK WELSH Challenges as CEO
When joined GE the U.S. economy had lot of
problems –
1- Economy in Recession
2- Highest Unemployment rate since Depression
3- High Interest Rate
Jack welsh challenged to be “better then the best”

8. Welsh’s Early Priority
Hardware Initiative
#1 or #2 - Fix, Sell or Close
•Three Circle Concept
•De-staffing and Real time
Planning
Software Initiative
•Work out
•Best Practices

9. Jack Welsh’s Vision
Services
GECC Information
Construction &
Engineering
Nuclear Services
Technology
Industrial Electronics
Medical Systems
Material
Aerospace
Aircraft Engines
Core
Lighting
Major Appliance
Motor Transportation
Turbine Construction
Equipment
“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”.
Support
Ladd Petroleum
Semi-Conductors
Utah Mining
Outside
Housewares
TV & Audio
Cable
Power
Delivery

10. Restructuring “Hard Drive”
Sold more than 200 businesses[SPIN OFF] and made over 370
acquisitions.
Replaced the strategic planning system with “real time planning”.
Built five-page strategy playbook.
Budgeting process was redefined
Insisted GE become more “lean and agile” resulting
Delayering
Sector Level
Destaffing
Elimination of
additional 122,700 Jobs
Downsizing
Eliminating of about
123,450 Jobs

11. Results of Change
Year Revenues Operating profit
1981 $27.2 billion $1.6 billion
1985 $29.2 billion $2.4 billion
Drastic restructuring earned Welch nickname
“Neutron Jack”.

12. Software Initiatives
Work Out Best Practices
To get unnecessary bureaucratic work out of the
system.
Forum in which employees and their bosses could
work out new ways of dealing with each other.
Groups of 40-100 employees were invited to share
views about the business and how it can be
improved.
3-Day session, there was no documentation of
meeting.
This resulted in birth of a movement called “Best
Practices”
It was about increasing
productivity through Competitive
Intelligence.
Through best practices realization
by managers that they were
measure/managing wrong things.

13. Going Global
•Paolo Fresco => Head of International Operations
•Paolo concentrated on to create Solid base and then jump into
world arena.
•Business are global and not companies.
#1 or #2 evaluated at world market position.
Contribution
Key negotiator in deal with Thomas S.A.
[exchange offer]
Joint venture with Robert Bosch
Partnership with Toshiba
Acquisition of Sovac

14. Problem = Opportunity
Globalization not a one time, its an ongoing process
• $17.5 billion invested in from 1989-
1995,on new plants, acquisitions and
finance.
Europe
economic
downturn
• Great buying opportunity ,acquired
16 companies.
Mexican peso
collapsed
• Welch urged its managers to view
this as an opportunity to buy rather
than a problem
Asia slipped
into Crisis

15. Developing Leaders
Focus of employees Outward(competitive world) instead of
inward.[Lifetime employment]
“I O People” => good people were GE’s key assets and are
company's resource.
Developing of employee was from both side(employer and
employee).
Developed 360 Degree Feedback (rating employee from 1-5 scale)
Salary Structure
Increase base salary + compensation(stock options)

16. Boundary Less Behavior
To strengthening GE’s Individual Businesses
Bonus and rewards for idea sharing and not just idea creation
Integrated Diversity
Boundary less
Company
The Boundaryless company
we envision will remove the
barriers among engineering,
manufacturing, marketing,
sales, and customer service;
it will recognize no
distinctions between
domestic and foreign
operation

17. Stretch :Achieve the Impossible
•How good can you be?
•Don’t-punish-failure concept.[No disaster of Stretch target Idea]
•By 1995 GE did achieve Operating margin of 14.4% and
inventory turns of almost 7 in 1995
Manager
Basic
Targets
Rewarded
Higher
Goalsnot accountable
accountable

18. SIX SIGMA
•Tied 40% bonus to Individuals[Six Sigma was not optional].
•Medical Systems= tenfold increase,62% reduction in turnaround
time.
•Change the DNA of GE whose central strand is QUALITY.
Green Belts
• 4 weeks training
5 Months
implementation
Black Belts
• 6 weeks of
instruction in
statistic , data
analysis and other
six sigma tools
Master Black
Belts
• Full time six sigma
instructors –
mentored the Black
Belt candidates
through the two –
years process

19. "A Players" With "Four E's"
A Players
Individuals with vision, leadership, energy and
courage.
Execution Edge Energy Energize others
 Implemented Performance Appraisal System.
 Globalizing the intellect of the company.
 Continuously upgrading Quality of management was key
success of GE.

20. Achievement Of Company
(2012-2014)
3rd Largest Company in the World (Forbes)
5th Best Global Brand
6th largest in USA (Revenue)
7th Best Company for Leaders (Fortune)
14th Most Profitable Company in World
(Fortune)
19th Most Innovative Company in World (Fast
Company)