Jack Welch

Strategic Thinker
Dr. Adel Zayed Presented by: Sherif Louis Kamel Yasser Salah Moustafa Ahmed Mamdouh Negm

Outlines

Jack Welch
Strategic Thinker

Brief Information What did Welch do in GE? What turn-around Strategy/Philosophy did he adopt?

Brief Information
He was Chairman and CEO of General Electric between 1981 and 2001. Welch joined General Electric in 1960. He worked as a junior chemical engineer. Welch was displeased with the $1,000 raise he was offered after his first year, as well as the strict bureaucracy within GE. He planned to leave the company. Reuben Gutoff, a young executive two levels higher than Welch, decided that the man was too valuable a resource for the company to lose. He tried to convince Welch to stay.

Brief Information
Welch became GE's youngest chairman and CEO in 1981 In 1999 he was named "Manager of the Century" by Fortune magazine. Since September 2006, Welch has been teaching a class at the MIT Sloan School of Management to a hand-picked group of 30 MBA students with a demonstrated career interest in leadership. He is also a global warming skeptic.

What did Welch do in GE?

Through the 1980s, Welch worked to streamline GE He pushed the managers of the businesses he kept to become more productive. Worked to eradicate perceived inefficiency by trimming inventories and dismantling the bureaucracy that had almost led him to leave GE in the past. He shut down factories, reduced payrolls and cut lackluster old-line units. Each year, Welch would fire the bottom 10% of his managers. He earned a reputation for brutal candor in his meetings with executives.

What did Welch do in GE?

He would push his managers to perform, but he would reward those in the top 20% with bonuses and stock options. He also expanded the broadness of the stock options program at GE from just top executives to nearly one third of all employees. Welch is also known for destroying the nine-layer management hierarchy and bringing a sense of informality to the company. During the 1990s, Welch shifted GE business from manufacturing to financial services through numerous acquisitions.

What did Welch do in GE?

Adopted Motorola's Six Sigma quality program in late 1995. In 1980, the year before Welch became CEO, GE recorded revenues of roughly $26.8 billion. In 2000, the year before he left, the revenues increased to nearly $130 billion. When Jack Welch left GE, the company had gone from a market value of $14 billion to one of more than $410 billion at the end of 2004, making it the most valuable and largest company in the world.

What turn-around Strategy/Philosophy did he adopt?

The Key Strategies and Philosophies adopted by Welch in GE; lies under the following:
1) 2) 3) 4) Lead More, Manage Less Build a Winning Organization Harness Your People for Competitive Advantage Build a Market-Leading Company

What turn-around Strategy/Philosophy did he adopt?

1) LEAD MORE, MANAGE LESS
Lead Manage less Articulate your vision Simplify Get less formal Energize others Face reality See change as an opportunity Get good ideas from everywhere Follow up

2) BUILD A WINNING ORGANIZATION

11. Get rid of bureaucracy 12. Eliminate boundaries 13. Put values first 14. Cultivate leaders 15. Create learning culture

What turn-around Strategy/Philosophy did he adopt?

3) HARNESS YOUR PEOPLE FOR COMPETITIVE ADV.
16. Involve everyone 17. Make everybody a team player 18. Stretch 19. Instill confidence 20. Make business fun

4) BUILD A MARKET LEADING COMPANY

Be number 1 or number 2 Live quality Constantly focus on innovation Live Speed Behave like a small company

His Quotes/ Statements

On the face of it, shareholder value is the dumbest idea in the world. Shareholder value is a result, not a strategy... your main constituencies are your employees, your customers and your products.
In an interview with the Financial Times on the Global financial crisis of 20082009

He said that every business must embrace green products and green ways of doing business, "whether you believe in global warming or not...because the world wants these products."

Strategists - like Welch - have the Power and Vision to see Normal Things as Abnormal Things

Video

Key Quote
Greatness is not a function of circumstances. Greatness, it turns out, is largely a matter of conscious choice, and discipline.
from Good to Great, Jim Collins

Thank You
Jack Welch
Strategic Thinker