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

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