Ge's Two-Decade Transformation: Jack Welch's Leadership

GE'S TWO-DECADE TRANSFORMATION: JACK WELCH'S LEADERSHIP

Team Members:

Vijay Dhote

Vikram Kumar Singh

Turaka srinivasa

How difficult a challenge did Welch face?  How effectively did he take charge?

Jack Welch took charge from a management legend ,Reg Jones, who was a proven leader & during his preceding seven years , reorganized the business and created SBUs & sectors based structure and central strategic cell his contribution brought him honors likes CEO of the year, CEO of the Decade, Management legend. Since Jack Welch was taking over from such a legendary and successful CEO, biggest challenge before him was to continue the success story further with all odds like economy recession, high interest rate and country’s highest unemployment rate.

To take on this challenge, by taking advantage of GE’s diverse portfolio, he challenged each business to “beat the best “and thus set competition for internal as well as external completion. He initiated series of structural changes in organization.

1. Categorization: Categorized businesses in three area, as Core, Highly Technological and Service.

2. Fix, Sell or Close: where he emphasized on being no 1 or no 2 in the competition, else sell the business or close down. Sold more than 200 businesses and made over 370 acquisitions.

3. Lean and Agile organization structure: highly disciplined de-staffing , de-layering, .getting rid of non value adders “questioners, checkers and nitpickers”, and empowerment

4. Strategic planning : replacing central strategic planning with real time planning

5. Budgeting and controlling: based on market and competitors comparison than internal historical data.

During the period of first five years GE showed modest growth in Revenue but 150 % growth in profit.

What is Welch’s objective in the series of initiatives he launched in the late 1980s and early 1990s? What is he trying to achieve in the round of changes he put in motion in that period? Is there a logic or...