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JWelch GE Way

JWelch GE Way

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Published by Shreedhar Bhat
Jack welch and the GE way. Gives insight of GE's unique business approach. Learn.
Jack welch and the GE way. Gives insight of GE's unique business approach. Learn.

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Published by: Shreedhar Bhat on Feb 23, 2010
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05/09/2011

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SUMMARIES.COM
is a concentrated business information service. Every week, subscribers are e-maileda concise summary of a different business book. Each summary is about 8 pages long and contains thestripped-down essential ideas from the entire book in a time-saving format. By investing less than one hourper week in these summaries, subscribers gain a working knowledge of the top business titles. Subscriptionsare available on a monthly or yearly basis. Further information is available at http://www.summaries.com.
J
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Management Insights and LeadershipSecrets From the Legendary CEOROBERT SLATER
 
MAIN IDEA
Jack Welch, is America’s most successful CEO, running the most valuable company in the United States, General Electric. Forall that, his business philosophy is quite straight-forward:Business is simple.Don’t make it overly complicated.Face reality.Don’t be afraid of change.Fight bureaucracy.Use the brains of your workers.Discover who has the best ideas and put those ideas into practice.And, always keep learning -- from your staff, from your competitors and from your customers. Do that on a consistent basis andyou’ll be able to successfully position your company to take advantage of the great opportunities that will open in the future.1. Act Like a Leader, Not a Manager . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Page 2‘‘Find great ideas, exaggerate them, and spread them like hell around the business with the speed of light.’’Conventionally, business managers thought their prime role was to supervise their employees. JackWelch, by contrast, thinks business leaders rather than business managers are required. A businessleader is someone who inspires co-workers with a vision of how to improve.2. Building the Market-Leading Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Page 3‘‘What can I do to make one of my businesses dominant in its market?’’GE has built an open and informal business atmosphere of market leading companies. GE’s corecompetence is its culture which views GE as a series of business laboratories that share ideas, financialresources and managers in a boundaryless organization. GE employees learn from each other -- andfrom others who are strong in their own markets.3. Forging the Boundaryless Organization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Page 4‘‘We had to get rid of anything that was getting in the way of being informal, of being fast, of being boundaryless.’’To survive in a competitive world, large companies have to:- Get lean- Get agile- Start thinking like a small company4. Harnessing Your People for Competitive Advantage . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Page 5‘‘My whole job is people. I can’t design an engine. I have to bet on people.’’To get GE employees to increase productivity, Jack Welch encouraged them to focus on:- Speed- Simplicity- Self-confidenceHe also took the boss element out of the company, encouraged employees to speak freely about anyand all issues, to stretch to exceed targets and to involve everyone in the business of the company.5. Push Service and Globalization for Double-Digit Growth . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Page 6‘‘The opportunity for growth in product services is unlimited.’’Two key drivers of GE’s revenue growth in the recent past and into the foreseeable near-term future areservice businesses and globalization. The service component of GE’s operational base has historicallybeen quite low, but is steadily rising over the past decade and is expected to continue to rise in the future.Similarly, GE is also finding an increasing number of its strongest competitors are non-Americancompanies as it starts to exploit business opportunities in overseas markets.6. Drive Quality Throughout the Organization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Page 7‘‘You’ve got to be passionate lunatics about the quality issue.’’In the late 1990s, a focus on quality is driving GE with intensity. In fact, Jack Welch has made deliveringquality the job of every GE employee.7. Jack Welch’s Vision for the Millennium . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Page 8‘‘People always overestimate how complex business is. This isn’t rocket science.’’Looking ahead, GE doesn’t plan on either standing still or on continuing to celebrate a glorious history.Jack Welch believes the company’s rate of growth will accelerate, and that there are no practical limitsto that growth.
Jack Welch and the GE Way - Page 1
 
1. Act Like a Leader, Not a Manager
‘‘Find great ideas, exaggerate them, and spread them like hell around the business with the speed of light.’’ 
Main IdeaConventionally, business managers thought their prime role wasto supervise their employees. Jack Welch, by contrast, thinksbusiness leaders rather than business managers are required.A business leader is someone who inspires co-workers with avision of how to improve.Supporting IdeasEvery GE employee carries with them a values card whichoutlines the key values GE stands for. It reads:
GE Leaders...Always with Unyielding Integrity: Have a passion for excellence and hate bureaucracy Are open to ideas from anywhere and committed to work-out Live quality and drive cost and speed for competitive advantage Have the self-confidence to involve everyone and behave in a boundaryless fashion Create a clear, simple, reality-based vision and communicate it to all constituencies Have enormous energy and the ability to energize others Stretch, set aggressive goals and reward progress -- yet understand accountability and commitment See change as opportunity, not a threat Have global brains and build diverse and global teams.
The characteristics of good business leaders are:1.Leaders inspire their co-workers, thereby encouraging themto perform today at a higher level than they did yesterday.2.Leaders keep things simple by asking the right questionsfocusing on the key issues. At GE, Jack Welch asks thosesenior managers that report directly to him:1. Describe your global competitive environment.2. What have your competitors done in the last 3 years?3. In the same period, what have you done to them?4. How might they attack you in the future?5. What are your plans to leapfrog them?3.Leaders energize, excite and control using the company’svalues and cultures.4.Leaders face reality and then act decisively.5.Leaders are relentless and consistent, following through oneverything they do meticulously.6.Leaders love change, and try to consciously change thecompetitive environment by focusing on quality and service.7.Leaders deliver on their commitments.8.Leaders talk with their co-workers face-to-face, rather thantalking to one another or issuing memos.9.Leaders harp on about a few key themes every time theymeet with co-workers. They repeat the same message overand over.Key Thoughts
‘‘What sets GE apart is a culture that uses this wide diversity as a limitless source of learning opportunities, a storehouse of ideas whose breadth and richness is unmatched in world business. At the heart of this culture is an understanding that an organization’s ability to learn, and translate that learning into action rapidly, is the ultimate competitive business advantage.’’ 
--Jack Welch
‘‘We might make a completely different decision about a deal we agreed on yesterday. or a program we started, in light of the changing environment of the last twenty-four hours. Jack is one of the few guys who’s not afraid to do that. In many organizations,the temptation is to drink your own bath water. In many organizations, the leader is afraid of going back on something,of giving the troops a direction that is different from what he said yesterday.’’ 
--W. James McNeery Jr.
‘‘We want to change the competitive landscape by being not just better than our competitors, but by taking quality to a whole new level. We want to make our quality so special, so valuable to our customers, so important to their success that our products become their only real value choice.’’ 
--Jack Welch
‘‘Some managers equate managing with sophistication, with sounding smarter than anyone else. They inspire no one. I dislike the traits that have come to be associated with managing -- controlling, stifling people, keeping them in the dark, wasting their time on trivia and reports. Breathing down their necks. You can’t manage self-confidence into people.’’ 
--Jack Welch
‘‘I have no idea how to produce a good television program and  just as little about how to build an engine. But I do know who my boss at NBC is. And that is what matters. It is my job to choose the best people and to provide them with the dollars. My job is to understand the strategic issues within each of those businesses. I know the talent they need to win in those markets and the amount of capital they need. I make bets.’’ 
--Jack Welch
‘‘We have in the U.S. more than most countries have, and most countries want what we have. We care about the delivery of results. We have a high work ethic. We have a large country,natural resources, an open society that brought in all kinds of people, all races and creeds. We as business people have to maximize the opportunity for this country to provide great jobs and great lives and great educations for people.’’ 
--Jack Welch
‘‘In the twenty-first century would you rather be in toasters or CAT scanners?’’ 
--Jack Welch
‘‘I don’t say one thing to outsiders and another to insiders. If you have a simple, consistent message, and you keep on repeating it, eventually that’s what happens. Simplicity, consistency and repetition -- that’s how you get through. It’s a steady continuum that finally reaches critical mass. You don’t get anywhere if you keep changing your ideas. The only way to change people’s minds is with consistency. I haven’t changed a thing. The ideas were always the same. We’ve been talking about reality, agility,ownership and candor since the beginning. We just got it simpler and more carefully articulated over time.’’ 
--Jack Welch
Jack Welch and the GE Way - Page 2 

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