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GE & Jack Welch

Jack Welch was the CEO of General Electric (GE) from 1981 to 2001. During his tenure, he grew GE's market value from $12 billion to $410 billion, making it the most valuable company in the world. Welch pioneered business strategies like evaluating each business as #1 or #2 in its industry or divesting it, focusing on quality, and making GE lean and agile. He emphasized developing managers, setting ambitious goals, and continually adapting best practices. Under Welch's leadership, GE's stock price rose 4,000% and the company became highly successful.

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Michelle Baritua
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120 views10 pages

GE & Jack Welch

Jack Welch was the CEO of General Electric (GE) from 1981 to 2001. During his tenure, he grew GE's market value from $12 billion to $410 billion, making it the most valuable company in the world. Welch pioneered business strategies like evaluating each business as #1 or #2 in its industry or divesting it, focusing on quality, and making GE lean and agile. He emphasized developing managers, setting ambitious goals, and continually adapting best practices. Under Welch's leadership, GE's stock price rose 4,000% and the company became highly successful.

Uploaded by

Michelle Baritua
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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Who is Jack Welch?

● Businessman, Chemical Engineer,


and Writer

● Chairman and CEO of General


Electric (GE) from 1981 to 2001 Manager of the
20th Century,
Grew GE’s market from 12 billion to
●
410 billion dollars, making it the Fortune, 1999
most valuable company in the
world by the end of 2001.

● The youngest CEO of GE at age 45


Before ‘Neutron Jack’ ?

Vice President and Head of Strategic


Engineer Vice Chairman
Head of GE Plastics Planning

1960 1968 1971 1973 1977 1979 1981


Chairman
And CEO

Vice President of Senior Vice


Chemical and President and
Metallurgical Head of
Division Consumer
Products and
Services Division
Early Career as CEO

● US was in a ● Eradicated
recession when inefficiencies and
he became CEO dismantled
bureaucracy in GE
● Succeeded Reg
Jones, won CEO
of the year 3 ● Made numerous
times, CEO of the acquisitions, most
Decade in 1979 notably in the financial
sector
● Pioneered policy of
informality in the
workplace
Speed, Simplicity, Self-Confidence
1st Wave: 2nd Wave: 3rd Wave:
Hardware Initiatives First Software Initiatives Second Software Initiatives

1981 1985 1990 1995 2001

Revenues ($bn) 27.2 28.3 49.7 70.0 125.9


Employees (‘000) 404 304 298 222 310

3 STRATEGIC CIRCLES LEAN & AGILE


STRATEGY DONE IN 3 EASY STEPS:

SERVICES
GE Capital
”You’ll always be as good Step 1: Come up with a smart, realistic way to
Construction & as the team you get” gain a sustainable competitive advantage.
Engineering
Step 2: Put the right people in the right jobs
Nuclear Services to drive Step 1 forward.

TECHNOLOGY CORE “Lead by energizing Step 3: Actively seek out the best practices
to achieve the goal set in Step 1, whether
Industrial Lighting
Major Appliance
others, not managing inside or out of the organization, adapt them
Electronics
Medical Motor by authority” and continually improve them.
Systems Transportation
Materials Turbine
Aircraft Engine Construction
Aerospace Equipment
Hardware Fix Sell Drop
Initiative
Welch set the standard for
each business to become
#1 or #2 competitor in its
industry - or to disengage.

Poor Achieving Can’t be fixed Can’t be fixed


Can be fixed Can be sold Can’t be sold

This management practice helped GE to free up over $11B capital by selling


Outcome: around 200 businesses between 1981-1990 but at the same time they acquired
370 businesses by investing over $21B.
Elimination of about 123,450 jobs from downsizing and 122,700 jobs from
divestiture; replaced 12 of 14 business heads
Leaders of Boundaryless Planning
Software Tomorrow Organization Efficiency
Initiative ● Improved Compensation From a Strategic
Focus on people & culture
● Training Institute
Inputs from all SBUs planning system to a 1-
● 360-degree feedback (Work-out) page answer to 5
Integrated Diversity strategic questions:
Quality “A” Players w/ 4Es: Centralized but delayered 1. Market Dynamics
Culture Energy Responsive & Goal
Energize others 2. Competitor
Compulsory Edge
Environment position in Market
participation in process Execution + Dynamics
3. Actions against
improvements to “Stretch” Goals competitor
reduce errors and
defects, 40% Bonus 4. Threat from
Use of dreams to set competitor
Implemented Green to business targets w/ 5. Action plan
Black to Master Black no real idea of how to
Belt 2-month trainings get there
Outcome
Aug 1981: $1.27
to
Aug 2000: $60

Jack Welch
1935-2020
Jack Welch’s Legacy

● Change is good ● Acknowledging


facts and
exploiting them
● Difference for advantage or
between leading eliminate their
and managing negative impact

● Hiring and
developing ● Focus and
managers who Consistency
can energize,
excite, and
control
Thank you!

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