General Electric

General Electric : 

General Electric We Bring Good Things To Life

Slide 2: 

“I wanted to change the rules of engagement, asking for more— from fewer. I was insisting that we had to have only the best people...If you wanted excellence, at a minimum, the ambience had to reflect excellence” Jack Welch

Jack Welch Introduction : 

Jack Welch Introduction John Francis "Jack" Welch, Jr was born November 19, 1935. Welch attended Salem High School and later the University of Massachusetts Amherst, graduating in 1957 with a Bachelor of Science degree in chemical engineering Welch went on to receive his M.S. and Ph.D at the University of Illinois at Urbana-Champaign in 1960. Welch joined General Electric in 1960 Welch was named a vice president of GE in 1972. He was Chairman and CEO of General Electric between 1981 and 2001

Tenure : 

In 1960, Jack Welch joined GE as a chemical engineer for its Plastics division in Pittsfield, Massachusetts. Named Vice Chairman in 1979 In April 1981 he became the 8th Chairman and CEO As CEO of GE, Jack Welch's management skills became almost legendary He had little time for bureaucracy and outdated business ways He ran GE like a small dynamic business able to change as opportunities arose or when a business became unprofitable. Tenure

Strategies by Jack Welch : 

When he became the CEO of General Electric, Jack found out that there was too much of bureaucracy and the company was running on the traditional style of doing business There was no innovation or no change in the organization. Therefore, citing this lack of change as an opportunity, he became a change initiator and introduced some major new strategies which resulted in great change Strategies by Jack Welch

Managing Style : 

He pushed the managers of the businesses he kept to become more productive Each year, Welch would fire the bottom 10% of his managers Jack Welch also rewarded his top performing employees with bonuses and also gave them the option of having stock of the company Managers were given free reign as long as they followed the GE ethic of constant change and striving to do better Managing Style

Cont…. : 

He earned a reputation for brutal openness in his meetings with executives Welch is also known for bringing a sense of informality to the company. He realized that he needed to do some unfreezing and shake the very foundation of the employees who were devoid of innovation and were believers of the old style of doing business Cont….

Decision Making : 

Welch's public philosophy was that a company should be either number 1 or number 2 in a particular industry, or else leave it completely Welch worked to eradicate perceived inefficiency by trimming inventories and dismantling the bureaucracy He shut down factories, reduced payrolls and cut lackluster old-line units. Decision Making

Cultural Change : 

Jack was responsible for bringing about a cultural change in the company. What were those cultural changes and in what facets were they introduced are as follows: People Working environment Volunteerism Leadership & learning GE foundation Cultural Change

People : 

GE now fervently believes that GE attracts leaders with an extraordinary combination of attributes: vision, passion and deep sensitivity to the big issues that challenge the world around them. A remarkable thing happens when you bring together employees who are driven to make a difference: they do. People

Working Environment : 

The working environment provided by GE is an invigorating place to work. Their is a high-performance culture that emphasizes high-integrity business practices as well as work/life balance. Working Environment

Volunteerism : 

Public and community service are also a part of the ongoing values at GE. The employees at GE give many hours to community service. And these programs are not just restricted to their home country but in fact they are spread worldwide. This belief drives organizational practice - from the philanthropic efforts of the GE Foundation to the millions of volunteer hours donated by their employees to community initiatives worldwide. Volunteerism

Leadership & Learning : 

GE provides opportunities for both leading and learning. At GE, learning is more than a classroom activity. It is how they come together to embrace change, develop skills to change things for the better, and get energized about it all. Leadership & Learning

GE Foundation : 

GE believes them to be philanthropists. They believe that Philanthropy plays an important part in their goal to be a good global citizen. It allows them to connect with people and make a positive difference in the communities where they do business and also those beyond their direct reach. GE Foundation

Media & Marketing Strategy : 

Jack realized that the success of any good company depends heavily on how it markets itself His strategies included: Building a strong corporate brand Use marketing techniques from consumer products to market B2B products Focused and simple Targeted a small group of businessmen and influentials Media & Marketing Strategy

Building a strong corporate brand : 

Here he focused on building a strong image of his brand During his reign, the slogan of GE was “We bring good things to life.” Building a strong corporate brand

Using marketing techniques from consumer products to market B2B products : 

Interestingly, this approach involved using the marketing approach used for consumer products and implementing it for B2B products. This meant that he started selling his products as consumer products and used those strategies which were used for consumer goods Using marketing techniques from consumer products to market B2B products

Focused and simple : 

His strategies were focused and simple and were to the point. He believed that products should be simple and user friendly. This “user friendly” concept of his went on to be a very famous concept. Focused and simple

Targeted a small group of businessmen and influentials : 

He targeted a small group of businessmen and political parties so as to achieve his required objective Jack Welch did not invest too heavily in technology, rather he went for acquisitions. He focused on the existing business and thought about bringing innovation in it. Targeted a small group of businessmen and influentials

Growth of GE under Jack Welch : 

General Electric’s growth, under Jack Welch led them into the following businesses: Industrial motors Medical systems Plastics Transport Power generation Aircraft engines A detailed chart of the acquisitions is given in the report Growth of GE under Jack Welch

Criticism : 

During the early 1980s he was dubbed "Neutron Jack" (in reference to the neutron bomb) for eliminating employees while leaving buildings intact The main criticism was that although his strategies were effective, but they were very short term and very drastic In his book, Jack: Straight From The Gut, Welch states that GE had 411,000 employees at the end of 1980, and 299,000 at the end of 1985. Of the 112,000 who left the payroll, 37,000 were in sold businesses, and 81,000 were reduced in continuing businesses. In return, GE had increased its market capital tremendously. Criticism

Changes w.r.t Nadler & Tushman Model : 

The changes which were introduced by Jack Welch were revolutionary as they led the company to huge profits. It was termed as growing fast in a slow growing economy by Jack himself. Some of the changes made by him were as follows: Trimming inventories Eliminating bureaucracy Shutting down of plants Reducing payrolls Firing low performing people Eliminating the nine-layered management hierarchy Bringing an informal culture in the company Changes w.r.t Nadler & Tushman Model

Cont…. : 

After considering the activities performed by Jack we can say that such dramatic and major changes can be placed in Overhauling and re-creating part. He was a visionary leader and was a man with unorthodox ideas who did not believe in the traditional ways of doing business During his time at General Electric, he acted as a change initiator and led his organization through major changes Cont….

Cont…. : 

Jack Welch basically did a gap analysis and found out where his company actually was and where he wanted it to be He identified the things which were hurdles and overcame them by employing the above mentioned strategies Cont….

Conclusion : 

In the compilation of this assignment, we analyzed the decision making style of Jack Welch and his personality. His way of going about doing things was very different and this led to a critically acclaimed personality. His methods were although short-term, but they were efficient and effective with respect to achieving the required objectives. He was, in his organization, a change initiator and change leader. Apart from that he was also an accomplished motivational speaker. All in all, Jack Welch proved that even unorthodox decision making styles to bring about radical changes can be successful if done properly. Conclusion

Slide 26: 

Thank You!