Jack Welch's Leadership
Legend can be duplicated ---Case analysis of “Jack Welch’s Leadership”
INTRODUCTION
Name as “Manager of the Century”, Jack Welch has made General Electric “Most Admired Company in the world”. This case, from an extensive perspective, describes us how Welch made such a legend during his two decade’s working in GE. After Welch become CEO in 1981, he initiated a series plan from structure redesign, incentive method changing, to culture building. By his continuous efforts, Welch finally delivered the world an astonishing achievement: GE has achieved average 23% annual growth during two decades, which will surly be a tempting story for us. We will wonder whether we can duplicate such a success. To answer this question, let’s unveil the secret firstly.
WHAT WELCH HAS DONE Since Welch’s joining in GE, he initiated his first priority to restructure GE. Welch set up a new standard for each business to become #1 or #2, which resulted in the selling of scores of business and made GE more lean and agile. Then he chip away bureaucracy, including scrapped strategic system, eliminating sector level and reducing number of hierarchical levels. GE reduced employee from 404000 in 1980 to 292000 by 1989, while at the same time increased operating profit from 1.6 billion to 2.4 billion. Welch has laid down a good foundation for future development. Fatherly, Welch began to strengthen GE’s edge from “soft power”. He intended to foster up a culture of speed, simplicity and self confidence by two initiatives of Work-out and Best-practice. At the same time, Welch globalized GE based on the facts that they already got a solid base in US. Besides the implementation of global thrust and cultural initiative, Welch also focused on developing leaders. The use of session C, overhauled compensation package, Crotonville facility and 360o feedback process helped GE to achieve this goal. Based on the previous foundation, Welch endeavored to fatherly
INTRODUCTION
Name as “Manager of the Century”, Jack Welch has made General Electric “Most Admired Company in the world”. This case, from an extensive perspective, describes us how Welch made such a legend during his two decade’s working in GE. After Welch become CEO in 1981, he initiated a series plan from structure redesign, incentive method changing, to culture building. By his continuous efforts, Welch finally delivered the world an astonishing achievement: GE has achieved average 23% annual growth during two decades, which will surly be a tempting story for us. We will wonder whether we can duplicate such a success. To answer this question, let’s unveil the secret firstly.
WHAT WELCH HAS DONE Since Welch’s joining in GE, he initiated his first priority to restructure GE. Welch set up a new standard for each business to become #1 or #2, which resulted in the selling of scores of business and made GE more lean and agile. Then he chip away bureaucracy, including scrapped strategic system, eliminating sector level and reducing number of hierarchical levels. GE reduced employee from 404000 in 1980 to 292000 by 1989, while at the same time increased operating profit from 1.6 billion to 2.4 billion. Welch has laid down a good foundation for future development. Fatherly, Welch began to strengthen GE’s edge from “soft power”. He intended to foster up a culture of speed, simplicity and self confidence by two initiatives of Work-out and Best-practice. At the same time, Welch globalized GE based on the facts that they already got a solid base in US. Besides the implementation of global thrust and cultural initiative, Welch also focused on developing leaders. The use of session C, overhauled compensation package, Crotonville facility and 360o feedback process helped GE to achieve this goal. Based on the previous foundation, Welch endeavored to fatherly