...AM FL Y TE Team-Fly® 29 Leadership Secrets from Jack Welch Abridged from Get Better or Get Beaten, SECOND EDITION Robert Slater McGraw-Hill New York Chicago San Francisco Lisbon London Madrid Mexico City Milan New Delhi San Juan Seoul Singapore Sydney Toronto Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved. Manufactured in the United States of America. Except as permitted under the United States Copyright Act of 1976, no part of this publication may be reproduced or distributed in any form or by any means, or stored in a database or retrieval system, without the prior written permission of the publisher. 0-07-141684-6 The material in this eBook also appears in the print version of this title: 0-07-140937-8 All trademarks are trademarks of their respective owners. Rather than put a trademark symbol after every occurrence of a trademarked name, we use names in an editorial fashion only, and to the benefit of the trademark owner, with no intention of infringement of the trademark. Where such designations appear in this book, they have been printed with initial caps. McGraw-Hill eBooks are available at special quantity discounts to use as premiums and sales promotions, or for use in corporate training programs. For more information, please contact George Hoare, Special Sales, at george_hoare@mcgraw-hill.com or (212) 904-4069. TERMS OF USE This is a copyrighted work and The McGraw-Hill Companies, Inc. (“McGraw-Hill”) and its licensors reserve all rights...
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...9-399-150 REV: MAY 3, 2005 CHRISTOPHER A. BARTLETT MEG WOZNY GE's Two-Decade Transformation: Jack Welch's Leadership On September 7, 2001, Jack Welch stepped down as CEO of General Electric. The sense of pride he felt about the company's performance during the previous two decades seemed justified judging by the many accolades GE was receiving. For the third consecutive year, it had not only been named Fortune's "Most Admired Company in the United States," but also Financial Times' "Most Admired Company in the World." And, on the eve of his retirement, Fortune had named Welch "Manager of the Century" in recognition of his personal contribution to GE's outstanding 20 year record. Yet while the mood at GE's 2001 annual meeting had clearly been upbeat, some shareholders wondered whether anyone could sustain the blistering pace of change and growth characteristic of the Welch era. And specifically, many worried if any successor could generate the 23% per annum total shareholder return Welch had delivered in his two decades leading GE. It would be a tough act to follow. (See Exhibit 1 for financial summary of Welch’s era at GE.) The GE Heritage Founded in 1878 by Thomas Edison, General Electric grew from its early focus on the generation, distribution, and use of electric power to become, a hundred years later, one of the world’s leading diversified industrial companies. A century later, in addition to its core businesses in power generation, household appliances, and lighting...
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...MGMT 320 10/17/2013 General Electric under Jack Welch A top 10 Fortune 500 company in 2013, General Electric is expected by many to display significant responsibility towards its surrounding environment and society. Taken over by John Francis Welch in 1981, GE developed from a profitable manufacturing company to an immensely profitable company that revolved its activities mostly around the provision of services, during his 20-year tenure. Even though a corporation has a number of duties it should carry out in order for it to be considered responsible—and GE had many--the fact remains that its first and most important duty is to be as profitable as possible; thus, the Welch era GE did fulfill its duty, although certainly not entirely or up to the best of its capabilities. This is exemplified by the fact that, by the end of his tenure, earnings per share raised from $0.46 to $1.07; in the 10 year period following his retirement, the same earnings decreased by 54%. One of the main issues Welch’s critics have with his leadership methods refer to the losses of jobs that occurred while he was the CEO of the company, around 120,000. However, these were the result of his emphasis on efficiency and performance as well as a global approach to business that would reduce production costs. Given a highly competitive marketplace, his actions should certainly be understandable. Undoubtedly, the demeanor GE displayed under Welch can be perceived as an expansion of Milton Friedman’s...
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...|HOW JACK WELCH RUNS GE | |A Close-up Look at How America's #1 Manager Runs GE | |Whisked by chopper from New York City, Jack Welch arrives early at the (GE) training center at Croton-on-Hudson. He scoots down to The | |Pit--the well of a bright, multitiered lecture hall--peels off his blue suit jacket, and drapes it over one of the swivel seats. | | | |This is face-to-face with Jack, not so much as the celebrated chairman and chief executive of GE, the company he has made the most valuable| |in the world, but rather as Professor Welch, coach and teacher to 71 high-potential managers attending a three-week development course. | | | |The class sits transfixed as Welch's laser-blue eyes scan the auditorium. He hardly appears professorial. With his squat, muscular, | |five-foot, eight-inch frame, pasty complexion, and Boston accent, the 62-year-old balding man looks and sounds more like the guy behind the| |wheel of a bus on Beacon Hill. And he isn't there to deliver a monologue...
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...1.) How difficult a challenge did Welch face in 1981? How effectively did he take charge? When Jack Welch accepted the position of CEO of GE in 1981 he faced a number of looming challenges which firstly included taking the reins of the company following a complete reorganization by a strong, successful predecessor. The second major challenge he faced was the new globalized marketplace in which GE had to compete. Welch had to act fast before GE's territory was taken over by global growth from foreign companies. The third challenge was the beginning symptoms of a contracting economy which, by 1982, would become a deep recession. Jack Welch approached the first challenge of taking over from a successful predecessor by deciding that keeping the status quo would not guarantee GE future success. He felt that GE was to be a standard; they needed to be “better than the best”. This fierce drive to restructure the company during the next 5 years, immediately after the organization had barely finished their prior restructuring, also helped solve his other immediate challenge: the economy. He effectively implemented a new strategy, “Fix, Sell, Close.” If a business could be fixed so it could be #1 or #2 in its competing category then it was kept, otherwise the business was sold or closed. In order to prepare for the incoming global competition, Welch decided to part ways with 12 of his 14 previously hired business heads. The new business heads had to fit a certain billing: “strong commitment...
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...Transformation” analyzes the leadership of Jack Welch, CEO of General Electric. When he took over GE as CEO in 1981, Jack Welch had big shoes to fill. His predecessor, Reg Jones, had been referred to as a “management legend” and been voted “CEO of the Year” and “CEO of the Decade” 3 and 1 times, respectively. Jones had led the company for 8 years and had done well both professionally and politically. Upon his initiation as CEO in 1981, the Wall Street Journal had already likened Welch’s replacing Jones to replacing a legend with a “live wire.” The business climate was shaky when Welch took over in April 1981, with the economy in recession. Welch had only one option: success. And to achieve success in the current climate, he would need his team to be “better than the best.” In fact, the choices were to be #1, #2, or nothing at all. He soon used this philosophy in his categorization of businesses into core, high-technology, and services. Welch’s 10 year vision was to lead GE to a state in which it would be viewed as “the most profitable, highly diversified company on earth, with world quality leadership in every one of its product lines” (Bartlett/Wozny); he sought to achieve this via a massive restructuring of the business. His philosophy of “fix, sell, or close” businesses was born, yet the reality was often that in the economic state of that time, most of the businesses ended up closing or being sold rather than being fixed. In fact, in 9 years GE sold of businesses that represented...
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...This post by LinkedIn Influencers Jack and Suzy Welch originally appeared on LinkedIn. For some people, the question of whether leaders are born or made is truly intellectual — fodder for a good classroom or dinner party debate. But for people in front-line positions to hire, promote, and fire, the question, "Who has the right stuff to lead?" definitely has more urgency. Getting the answer right can drive an organization’s culture and performance to new levels. Getting it wrong can too — downwards. So what’s the answer? Of course, since we’re talking about real life here, it isn’t neat or simple. The facts are, some leadership traits are inborn, and they’re big whoppers. They matter a lot. On the other hand, two key leadership traits can be developed with training and experience — in fact, they need to be. Before going any farther, though, let’s talk about our definition of leadership. It’s comprised of five essential traits. These traits, by the way, do not include integrity, which is a requirement in any leadership position, or intelligence, which is likewise a ticket to the game in today’s complex global marketplace. Nor do they include emotional maturity, another necessity. These three characteristics are baseline — they’re givens. So let’s go beyond them. From our experience, the first essential trait of leadership is positive energy — the capacity to go-go-go with healthy vigor and an upbeat attitude through good times and bad. The second is the ability...
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...GE’s Two-Decade Transformation Case Analysis March 17, 2005 For: Anne Becker From: Scott Ashby 999004953 _ Phil Parkinson Judy Lee 04003094 Gianni Liburdi 049003649 Executive Summary This report’s objective is to provide analysis of the leadership challenge that General Electric (GE) is currently facing, and to recommend solutions. The primary problem is determining what kind of candidate is required to replace retiring CEO Jack Welch. This has left GE to question how much does the company want to change policy over the previous era, and where does the company want to be in future? Detailed examination of the impact Jack Welch has had as CEO over the past twenty years reveals a leadership style that is the driving force behind a successful transition from a corporate model that was highly centralized and bureaucratic to one that is dynamic, flexible, and many times more profitable. If GE wishes to sustain and build upon the progress of the Welch era, it would do well to nominate a new CEO from within the organization who is familiar with his brand of leadership, and who can continue to provide it for many years to come. 2 Table of Contents Executive Summary................................................................................................................... 2 Table of Contents ....................................................................................................................... 3 Statement of Problem ...............................
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...CORPORATE SOCIAL RESPONSIBILITY (CSR) Corporate social responsibility (CSR, also called corporate conscience, corporate citizenship, social performance, or sustainable responsible business/ Responsible Business) is a form of corporate self-regulation integrated into a business model. CSR policy functions as a built-in, self-regulating mechanism whereby a business monitors and ensures its active compliance with the spirit of the law, ethical standards, and international norms. The goal of CSR is to embrace responsibility for the company's actions and encourage a positive impact through its activities on the environment, consumers, employees, communities, stakeholders and all other members of the public sphere who may also be considered as stakeholders. The term "corporate social responsibility" came into common use in the late 1960s and early 1970s after many multinational corporations formed the term stakeholder, meaning those on whom an organization's activities have an impact. It was used to describe corporate owners beyond shareholders as a result of an influential book by R. Edward Freeman, Strategic management: a stakeholder approach in 1984. Proponents argue that corporations make more long term profits by operating with a perspective, while critics argue that CSR distracts from the economic role of businesses. Others argue CSR is merely window-dressing, or an attempt to pre-empt the role of governments as a watchdog over powerful multinational corporations. CSR is...
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...Organizational Change of the 20th Century “Jack Welch the Man With the Plan” By: Schavalia A. Holmes HR587, Professor: M. Luckett TABLE OF CONTENTS PAGE INTRODUCTION 3 JACK WELCH BECOMES GE’s CEO 4-5 JACK WELCH ON GLOBALIZATION 5 JACK WELCH, LEADER, HIS MANAGEMENT STYLE REVEALED 5-7 JACK WELCH OUTLOOK ON WHAT MAKES A GOOD LEADER 7-11 JACK WELCH METHODOLOGY INCORPORATES KELLER’S MANAGING ORGANIZATIONAL CHANGE COURSE TCO’S ……………………………………………………………………………………………………12-13 JACK WELCH BEST CEO (MANAGER) EVER, OR IS HE THE “GRINCH WHO STOLE MASSIVE EMPLOYEES LIVELIHOODS? 14-16 CONCLUSION 16-17 BIBLIOGRAPHY 18 INTRODUCTION How do you take a company through restructuring and enable it to sustain the change and make it one of the largest multinational corporations in the world? Well, John F. Welch Jr. (Jack Welch) succeeded in doing just that. Welch climbed the corporate ladder and became Chief Executive Officer (CEO) of GE. Jack Welch (Welch) used integration techniques, well developed strategies, and made many acquisitions, while selling off or closing down its less productive companies and divisions. His task was to reinvent GE’s culture and change business operation by converting managers into leaders. He empowered his employees, gave them special rewards, devised training programs and opened the door for employees to acquire stock options. Welch’s mission was to transform the GE organization into a “boundary-less company...
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...4500 Case Report: The Jack Welch Era at General Electric During Jack Welch’s two decade tenure as CEO of General Electric that started in 1981, he had many notable accomplishments in GE's history; he fulfilled the company's primary economic responsibilities to society by serving customers worldwide and stimulating the economy. But as such big company, there were opposing views to his social responsibility tactics, many supported him and many did not agree with him. According to the article, I believe GE’s CSR can be analyzed from following aspects. First of all, GE in the Welch era sustained exceptionally high rate of profitability to its shareholders that boosted economic growth- market actions. “Earnings per share rose from $0.46 in 1981 to $1.07 in 2000, his last full year as CEO, the total return in GE share averaged 21.5 percent”. These high figures turned GE in to a glorious era, and definitely enriched its investors by high rate of dividends. Secondly, GE in the Welch years also fulfilled its economic responsibility to society by paying huge amount of taxes. As a result of GE’s remarkable success and profitability at the time, they paid out a significant sum of money in the form of taxes which contributed to improving the basic needs of society. The company also pressured government to lower taxes and lower budgets for schools. Moreover, GE engaged a lot of social activities – voluntary actions that clearly fulfilled its duty. The GE foundation made $40 million in...
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...Francis Welch, Jr., also know as Jack Welch, was born November 19, 1935 (Jack Welch). He was born in Peabody, Massachusetts (Jack Welch). He attended Salem High School and the University of Massachusetts Amherst (Jack Welch). He graduated from Amherst in 1957 with a Bachelor of Science degree in chemical engineering (Jack Welch). In 1960 he received a MS and PhD at the University of Illinois at Urbana-Champaign (Jack Welch). After receiving his MS and PhD, that same year Welch joined General Electric (Jack Welch). At a salary of $10,500, he worked as a junior chemical engineer in Pittsfield, Massachusetts (Jack Welch). A year later he planned to leave GE because of a raise that he was offered (Jack Welch). He was persuaded to remain working there by Reuben Gutoff (Jack Welch). Gutoff promised him that he would create an atmosphere Welch wanted (Jack Welch). In 1972 Jack Welch became a vice president of GE (Jack Welch). Nine years later, Welch moved his way up to GE’s chairman, becoming the youngest chairman and CEO (Jack Welch). Welch was forty-five when he took control of GE (Jack Welch (GE)-FamousCEOs). He was a no-nonsense executive who believed that every single component of the company had to produce a profit (Jack Welch (GE)-FamousCEOs). “Each person, each piece of equipment, each division, and each manager had to contribute to the bottom line in a positive manner. Those that could not or would not were summarily relieved of their duties (Jack Welch (GE)-FamousCEOs)...
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...Welsh’s Leadership 1.) How difficult a challenge did Welch face in 1981? How effectively did he deal with it? What major lesson can we learn from his “first stage” that should be incorporated into our general “planned change” framework? Jack Welch faced several difficult challenges when he came into office in 1981. One of his primary areas of concern had to be replacing the retiring CEO Reg Jones. Jones had had great success during his time at GE, particularly in terms of growth of strategic planning with the organization. He restructured the organizational levels of the company to handle the tremendous volume that his strategic planning process was producing. Many of these processes used within the business community as benchmarks to follow. The public perception of Reg Jones was also very high, as he had been recognized with “CEO of the Year” honors multiple times, as well as “CEO of the decade.” Welch had to be up to the task of replacing a man that many in the industry considered a legend. Another major challenge Welch faced that can’t be overlooked is the external environment when he took over as CEO. At the same time he was charged with the task of replacing his successful predecessor, Welch also had to deal with a U.S. economic recession. Additionally, there was an increasing amount of rivalry from global competition that compounded the problems being faced by the sluggish economy. It would be one thing if Welch was entering his new position under ideal economic circumstances...
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...GE Two-Decade Transformation: Jack Welch’s Leadership 1A. Vision. Mr. Welch started from day one of his tenure as CEO to change the vision of GE as it relates to its employees, management and the aim of its products. His major goal was to fixed those poor achieving product lines that could be fixed, sell those product lines that could be sold but not fixed and drop those product lines that could not be fixed or sold. B. Mission. Mr. Welch mission was to downsize, de-staff and de-layer the GE organization to streamline it to be more efficient and effective. C. Strategies. Mr. Welch brought in various strategies; however, they all had three primary focus points in mind. He wanted to centralize the chain of command structure, while taking out layers of bureaucracy. He wanted input from all sectors of the GE family when determining how to do jobs better. He wanted management to be responsive up as well as down the chain of command. D. Organizational Structure. Mr. Welch knew he badly had to implement a cultural change if he intended to sustain high productivity. He wanted to replicate a small business culture, where ideals were freely shared with management and decisions were made on the spot. He started an initiative called “Work-out,” where employees with the help of a facilitator put their ideals on paper. Once the employee ideals were captured on paper, management was called in to hear the...
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...GE’s Two-Decade Transformation Case Analysis March 17, 2005 For: Anne Becker From: Scott Ashby 999004953 Phil Parkinson _ Judy Lee 04003094 Gianni Liburdi 049003649 Executive Summary This report’s objective is to provide analysis of the leadership challenge that General Electric (GE) is currently facing, and to recommend solutions. The primary problem is determining what kind of candidate is required to replace retiring CEO Jack Welch. This has left GE to question how much does the company want to change policy over the previous era, and where does the company want to be in future? Detailed examination of the impact Jack Welch has had as CEO over the past twenty years reveals a leadership style that is the driving force behind a successful transition from a corporate model that was highly centralized and bureaucratic to one that is dynamic, flexible, and many times more profitable. If GE wishes to sustain and build upon the progress of the Welch era, it would do well to nominate a new CEO from within the organization who is familiar with his brand of leadership, and who can continue to provide it for many years to come. 2 Table of Contents Executive Summary................................................................................................................... 2 Table of Contents ....................................................................................................................... 3 Statement of Problem ...........
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