GEs Two Decade Transformation:

Jack Welchs Leadership

Mrudang Thakor

LOGO

LOGO

Content
1. GE- Overview
2. All about- Jack Welch
3. Initiatives taken by Jack Welch
Hardware
Initiative
#1 or 2 Fix,
Sell/Close
Three Circle Concept
De staffing process
Strategic Planning
system

Software
Initiative

Work Out
Best Practices
Go Global
Develop Leaders
Boundary less
Behavior
Notion of stretch
Six Sigma

1. GE- Overview

LOGO

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

1. GE- CEOs

LOGO

(Since 1973)

Jack Welch (1981-2001)

Reg Jones (1973-81)

Jeffrey Immelt (2001- Present)

2. All about Jack Welch

LOGO

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

Challenges for Welch as CEO

LOGO

Matching and surpassing the standards set

by his predecessor Reg Jones.
CEO of the year

(3 times)

CEO of the decade

(1979)

Management Legend
Economy in recession

(WSJ-1981)
(1981)

Strong Dollar Highest Unemployment

rates

LOGO

Youngest CEO in action

Initiatives by Jack Welch

Hardware
Initiative
#1 or 2 Fix,
Sell/Close
Three Circle Concept
De staffing process
Strategic Planning
system

Software
Initiative

Work Out
Best Practices
Go Global
Develop Leaders
Boundary less
Behavior
Notion of stretch
Six Sigma

Disciplined Destaffing
LEAN

Less no. of

We dont need the questioners &

checkers, thepeople,
nit pickers who bog down
the process
bureaucracy
&
Today each staff has to ask, How do I
politics
add value? How do I make people on
the line more effective and
competitive?.

DESTAFFING
AGILE

Making people
productive and
competitive

LOGO

LOGO

Real Time Planning

STRATEGIC PLANING

REAL TIME PLANING

Five page strategy Play book

One page answers to five questions
1.
2.

Current Market Dynamics

Competitors recent activities
3.

4.

GEs Response

Greatest competitive threat over 3 years

5.

GEs Planned response

Benefits by Hardware initiatives

Number of
Employees

404,000 to 292,000

(1981-89)

$27.2 billion to $29.2 billion

Operating
Profits
(1981-85)

Revenue

(1981-85)

$1.6 billion to $2.4 billion

LOGO

LOGO

Initiatives by Jack Welch

Hardware
By mid
1988 the Hardware structure
Initiative
was basically
in place. Now it was time to
Fix, Sell/Close
focus
organizations Software. A
Threeon
Circle Concept
boost productivity by
company
De staffing can
process
restructuring,
removing bureaucracy and
Strategic Planning
downsizing,
but it can not sustain high
system
productivity without cultural change.

Software
Initiative

Work Out
Best Practices
Go Global
Develop Leaders
Boundary less
Behavior
Notion of stretch
Six Sigma

LOGO

Work Out

Overview

Objective

1. An open discussion forum

2. Employee could give ideas and suggestions on
business and get immediate responses to it.

tings
e
e
m
ese
h
t
f
o
ed
d
r
None1. To design
o
c
e
t unnecessary
get
a process
to
n
o
d
were r loy
s
e
ework
bureaucratic
out of the system.
p
m
e
E
t
a
R
h
O
t
M
the
culture
of a small company,
So 2. To create
h
t
i
w
p
u
Y.
felt
engaged
and everyone had
endwhere all
C
A
R
C
U
A
RE
voice.
BU

Implementation

1.
2.
3.
4.

Implementation team (24 Consultants)

Group of 40-100 employees
Three day sessions
On the spot decision on 80% proposals.

LOGO

Best Practices

Learning from
other
industries

Focus more on
how things
got done

Implementation

Results

1. Productivity increase
2. Managers realized the key focus areas of
business

Go Global

LOGO

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)

Developing leaders for tomorrow

Keeping close tabs on top 3000
executives
Succession Planning
Improved packages/Stock Options
Training institute at Crotonville
360 Degree Feedback

LOGO

LOGO

A Players

A
playe
rs

Energy

Excited by ideas and attracted to turbulence

Energize

Infecting everyone with enthusiasm for idea

Edge
Execution

The ability to make tough calls

Consistent ability to turn vision into results

Performance Appraisal System

Rank

Rating

Top 10%

TOP

Stock Options

15%

STRONG

Stock Options

50%

HIGHLY VALUED

15%

BORDERLINE

Bottom 10%

LEAST EFFECTIVE

LOGO

Reward

Training
Improve or Move
Weed out

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, Quick
response
asset
management,
transaction
effectiveness from GE CAPITAL, Cost Reduction
techniques from AIRCRAFT ENGINES, Global
account management from PLASTICS.

LOGO

Notion of Stretch

LOGO

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 set
and performance was measured by creating an
atmosphere that asked of everyone, How good can
you be?

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 for

a living. Today services account for two-thirds of our
revenues

LOGO

Six Sigma Initiative

LOGO

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.

LOGO

Implementation
Green
Belt

Black
Belt

Master
Black
Belt

Training 4 weeks
Implementation5 Months project
aimed at improving
Quality.

Training- 6 weeks
in statistics, data
analysis and other
six sigma tools.

Full time six sigma

instructors.

Results

1. 10Fold increase in life of CT scan X-ray

tubes
2. 62% reduction in time at service
stations
3. 30,000 Six Sigma projects were
initiated a year.

Summary of Initiatives

LOGO

Thank You !
Mrudang Thakor, MBA (09892734547)

LOGO