GES TWO DECADE TRANSFORMATION : JACK WELCHS LEADERSHIP

SUBMITTED BY: BHAVANA LAKHWANI (PGP20125674) EKTA SINGH (PGP20125002) KALPIT JAIN (PGP20125301) ROHIT JAIN (PGP20125268) RAHUL BHARADWAJ

ABOUT THE COMPANY

FOUNDED IN 1878 BY THOMAS EDISON. MERGER- 1892, BETWEEN GE AND THEC FORMED GENERAL ELECTRIC HEADQUARTERS: FAIRFIELD, CONNECTICUT, U.S REVENUE: US$ 147.300 BILLION (2012) 3RD LARGEST COMPANY IN THE WORLD (FORBES) 5TH BEST GLOBAL BRAND (INTER - BRAND)

6TH LARGEST IN USA (GROSS REVENUE)

7TH BEST COMPANY FOR LEADERS (FORTUNE)

THOMAS EDISON (1878 1972)

FOCUS ON GENERATION , DISTRIBUTION, AND USE OF ELECTRIC POWER. ENGAGED IN DIFFERENT TYPES OF BUSINESSES: POWER GENERATION HOUSEHOLD APPLIANCES LIGHTING AIRCRAFT ENGINES MEDICAL SYSTEMS DIESEL LOCOMOTIVES. OTHERS CORE BUSINESS

1960 1950
Decentralization strengthen its corporate staff and develop sophisticated planning systems

1930
centralized

REG JONES (1973 1980)

Strategy-SBU based structure and planning processes
10 groups, 46 divisions, 190 departments, and 43 strategic business units Develop a constructive business-government dialogue Wall Street Journal proclaimed him as a management legend

Success
Sales more than doubled ($10 billion to $22 billion) and earnings grew even faster ($572 million to $1.4 billion) A major thrust into international markets Expansion of world trade and restoration of U.S. competitiveness

JACK WELCHS (1981 2001)

WHEN JOINED GE THE U.S. ECONOMY HAD LOT OF PROBLEMS TO DO SO SET IN MOTION SERIES OF CHANGES TO RESTRUCTURE THE COMPANY OVER NEXT FIVE YEARS.

CHALLENGES FACED IN 1981

CHALLENGE FORM OUTSIDE GE ECONOMIC RECESSION HIGH INTEREST RATES HIGHEST UNEMPLOYMENT RATE SINCE THE DEPRESSION

CHALLENGES FROM GE MASSIVE INFORMATION AND INEFFICIENT MACRO-BUSINESS

WHAT IS WELCHS REACTION TO THESE CHALLENGES?

WELCH'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 ENTERPRISETHE MOST PROFITABLE, HIGHLY DIVERSIFIED COMPANY ON THE EARTH, WITH WORLD QUALITY LEADERSHIP IN EVERY ONE OF ITS PRODUCT LINES. -- JACK WELCH

BUILDING THE FRAMEWORK

CHALLENGED EVERYONE TO BE BETTER THAN THE BEST SOLD MORE THAN 200 BUSINESSES AND MADE OVER 370 ACQUISITIONS INSISTED GE BECOME MORE LEAN AND AGILE RESULTING
DELAYERING: ELIMINATION OF THE SECTOR LEVEL DOWNSIZING: ELIMINATION OF ABOUT 123,450 JOBS DIVESTITURE: ELIMINATION OF AN ADDITIONAL 122,700 JOBS

REPLACED 12 OF HIS 14 BUSINESS HEADS

OVERCOMING CHALLENGES
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

BEST PRACTICES
MICHAEL FRAIZER OF GES BUSINESS DEVELOPMENT
THEY FOCUSED MORE ON DEVELOPING EFFECTIVE PROCESSES THAN CONTROLLING INDIVIDUAL ACTIVITIES. CUSTOMER SATISFACTION WAS THEIR MAIN GAUGE OF PERFORMANCE. THEY TREATED THEIR SUPPLIER AS PARTNERS THEY EMPHASIZED THE NEED FOR A CONSTANT STREAM OF HIGH QUALITY NEW PRODUCTS DESIGNED FOR EFFICIENT MANUFACTURING

GOING GLOBAL
A KEY NEGOTIATOR ON THE THOMPSON SWAP Continued to broker numerous international deals A joint venture with german-based Robert Bosch A partnership with Toshiba Acquisition of Sovac , the French consumer credit company

PROBLEM = OPPORTUNITY
Globalization not a one time effort but an ongoing theme.

Europe economic downturn

$17.5 billion invested in from 1989-1995,on new plants, acquisitions and finance.

Mexican peso Great buying opportunity ,acquired 16 companies. collapsed

Asia slipped into Crisis

Welch urged its managers to view this as an opportunity to buy rather than a problem

DEVELOPING LEADERS
Focus of employees outward(competitive world) instead of inward.[Lifetime employment] I O people => good people were ges key assets and are company's resource. Developing of employee was from both side(employer and employee). Salary structure

Increase base salary + compensation(stock options)

TASKS INVOLVED IN REBUILDING THE COMPANY AT GREATER PACE

BOUNDARYLESS BEHAVIOR
To strengthen GEs individual businesses ideas free to flow, no distinction between foreign and domestic markets. Integrated Diversity 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 ..

Boundaryless Company

 1990 , WELCH INTRODUCED THE NOTION OF STRETCH TO SET PERFORMANCE TARGETS AND DESCRIBED IT AS USING DREAMS TO SET BUSINESS TARGETS, WITH NO REAL IDEA OF HOW TO GET THERE. STRETCH TARGETS DID NOT REPLACE TRADITIONAL FORECASTING AND OBJECTIVES-SETTING PROCESS.

STRETCH : ACHIEVING THE IMPOSSIBLE

SERVICE BUSINESS
IN 1994, WELCH LAUNCHED A NEW STRATEGIC INITIATIVE DESIGNED TO REINFORCE ONE OF HIS EARLIEST GOALS: TO REDUCE GES DEPENDENCE ON ITS TRADITIONAL INDUSTRIAL PRODUCTS.
1980
2 15%
2 45% 1 55% 1 85% 2 55% 2 67% 1 45% 1 33%

1990

1995

1998

Products

Services

"A PLAYERS" WITH "FOUR E'S"

A PLAYERS INDIVIDUALS WITH VISION, LEADERSHIP, ENERGY AND COURAGE 4 ES ENERGY , ABILITY TO ENERGIZE OTHERS , EDGE , THE ABILITY TO MAKE TOUGH CALLS

EXECUTION , THE CONSISTENT ABILITY TO TURN VISION INTO RESULTS.

RESULT

Current Scenario of GE India

GES PRESENCE IN INDIA WAS IN 1902 => HYDROPOWER PLANT. TODAY THE BEST OF GE IS IN INDIA THROUGH TECHNOLOGIES AND INNOVATIONS. BRINGING PRODUCTS, SERVICES AND TECHNOLOGIES CLOSER TO CUSTOMERS[LOCALIZATION]. A LONG TERM PLAYER ACROSS TRANSPORTATION, ENERGY HEALTHCARE AND FINANCIAL SERVICES.