GEs Two Decade Transformation: Jack Welchs Leadership

Submitted By: Group B Alokik Jain, Anuran Mukherjee, Ankita Kushwaha, Arnab Pramanick, Bhaskar K, Hrishikesh Mukherjee, Savitha B

Answer 1. His predecessor, Jones, set the bar extremely high at the company leaving a legacy for Welch to compete with as the new CEO. During this transition, the business world was highly competitive. If not handled properly, the transition could be detrimental to the company. He knew that a successful transition would mean developing a team that would make GE even more prosperous earning stakeholder trust. Welch convinced his team that the employees needed to be better than the best. To achieve this vision, he placed efficient people at critical positions and changed the organization culture as well eliminated the employees who were not working. He transferred GE into Lean and Agile Business. Welch focused on Real Time planning strategy as well. When he took over as the CEO, the US economy was in a recession. To tackle this situation, he had to develop a plan of action aimed at keeping the company thriving in the business world. In order to achieve this, GE sold many of their businesses, which represented 25% of their sales. However, Welch simultaneously and strategically invested in new businesses, increasing GEs revenue and operating profits. Answer 2. Welch did extremely well as the CEO of GE. In spite of his predecessor being extremely successful in his reign, Jack Welch ensured that GE did better than what it was doing under Jones leadership. The competitors were doing their best to overtake GE and Jack attempted more innovative ideas to take the company a step ahead in the business world. Answer 3. The series of initiatives that Welch launched were well thought and implemented. His vision was to make GE a unique high spirited entrepreneurial enterprise, the most profitable, and diversified company on earth with world quality leadership. His objective was to build the set of competencies needed to achieve his vision. The initiatives initially introduced by him were: 1. Focus on Best product (#1 or 2 in the world)

2. Transitioning to total customer solutions, with the introduction of services 3. Embracing suppliers as partners While his initial initiatives was to introduce change, the next few were to reinforce and institutionalize that very change. In the process of helping customers win, he positioned GE in such a manner that customers cannot leave by creating high switching costs. Similarly by giving best jobs and great T&D, he took care of acquiring and retaining talent. Answer 4. All his strategic initiatives were aligned with building those competencies which took GE to its goal. His initial focus was on organizational culture. He wanted to put in place a management style that was based on openness, candor and facing reality and a culture characterized by speed, simplicity and self-confidence. His WORK OUT and BEST PRACTICES initiative took care of this. He recognized the importance of providing value added services. He was instrumental in changing mindsets from selling products to HELPING CUSTOMERS WIN. The focus was to make their customers existing assets more productive, to point where the information was so valuable that the customer would pay for it. SIX SIGMA was yet another initiative to institutionalize quality in the organizations DNA. GE invested $500 million to train people. They had a return of $750 million on this and were forecast to have return over $1.5 billion in 1999. It is evident that all his initiatives added value to the organization. Answer 5. Welchs approach was both strategic and pragmatic. He was able to execute all his strategic ideas. For Jack Welch - ACTION SPOKE LOUDER THAN THOUGHTS. Though downsizing hurt a lot of employees but it was necessary for the change that Jack envisioned for GE. Having said that he was instrumental in GEs transformation .The organization and processes he established led GE to what it is today one of the most admired organization in the world. He was a visionary and its highly doubtful if this transformation could have happened without him. His successor has a large void to fill. Welch was so fast in his actions that at times, it may not be the right way to proceed. But having said that it is definitely not easier to be a leader like Jack Welch.