GEs two Decades

Transformation
Jack Welchs
Leadership
Group 1
12P139 Ishpreet
Singh
12P141 Karan
Jaidka
12P142 Kshitij
Agrawal

Companys time line

Founded in 1878 by

Neutron JACK
When joined GE the U.S. economy had lot
of problems:-

Welch came out as a transformational leader

To do so set in motion series of changes to restructure the
company over next five years.
He had both authoritative and democratic styles of leadership

Effective Strategic Leadership

Effective
Effectively
Determining
Strategic
Managing
Strategic
Leadership
the
Direction
Firms Resource Portfolio
Fix, Sell or
Close
Vision and
Developed
Mission
Human and
Social Capial

A Players and
Four Es

360
Degree
Weeding
out
feedback
Autocratic
process
Leaders

Welch's Vision
Services
GECC
Information
Construction &
Engineering
Nuclear Services

Support
Ladd Petroleum
Semi Conductor
GE Trading Co.
Utah Mining

decade
from
now, I would like
General Electric
to be perceived
as
a
Unique,
high-spirited,
Entrepreneurial
enterprisethe
most profitable,
highly diversified
Outside
company on the
Housewares
Central Air-Conditioning earth, with world
TV&Audio
quality
Cable
leadership
in
Mobile
every one of its
Power Delivery
product lines. -Radio Stations
Jack Welch

Technology
Industrial
Electronics
Medical Systems
Material
Aerospace
Aircraft Engines

Core
Lighting
Major Appliance
Motor
Transportation
Turbine
Construction
Equipment

Ventures
Calma

Three-Circle Vision for GE

Restructuring the Hard Drive

Sold more than 200 businesses[SPIN OFF] and
made over 370 acquisitions.
Replaced the strategic planning system with
real time planning.
Built five-page strategy playbook.
Budgeting process was redefined.[rather than
internal comparison used external means]
Insisted GE become more lean and agile
resulting
Delayering
sector level

Downsizing
elimination of
about 123,450
jobs

Destaffing
elimination of an
additional 122,700
jobs

Second Stage of Rocket

1980s most of the restructuring was complete
Jacks priorities were shifting to Culture
A company can boost productivity by restructuring,
removing bureaucracy and downsizing,
but it
cannot sustain high productivity without cultural
change

Work Out

Best
Practices

Software Initiatives
Work Out
To
get
unnecessary
bureaucratic work out of
the system
Forum in which employees
and their bosses could
work out new ways of
dealing with each other
Groups
of
40-100
employees were invited to
share views about the
business and how it can be
improved 3-Day session,

Best
Practices
It was about increasing
productivity
through
Competitive Intelligence
[best practices of Ford,
HP, Xerox, Toshiba]
Through best practices
realization by managers
that
they
were
measuring/
managing
wrong things

Going Global
Opportunity

Working
Philosoph
y

Developing Leaders
People were GEs key assets and are company's
resource.
Develop leaders aligned to GEs new vision and
culture. Work Out Idea striked.
Characterizations of Leaders
First
Delivers
commitments
and share
values.

Second

Third

Doesnt meet
commitment
and doesnt
share values.

Misses
Commitments
but shares
Values

Fourth
Delivers
commitments
but doesnt
share values.

Introduced 360 degree feedback process.

[rating employees on scale of 1-5]

Autocrat and
need to weed
out from GE

Boundaryless Behavior (Third Wave)

To strengthening GEs Individual
Businesses
Integrated
Diversity

Boundaryless
Company

The Boundaryless
company we envision
will remove the barriers
among engineering,
manufacturing,
marketing, sales, and
customer service; it will
recognize no
distinctions between
domestic and foreign
operation

Bonus and rewards for idea sharing

and not just idea creation

Stretch: Achieve the IMPOSSIBLE

How good can you be?

Manage
r

accountabl
e HIT

Higher
Goals

not
accountable H
TC
Basic
Targets

E
STR

Rewarde
d

Dont-punish-failure concept.[No disaster of Stretch

target Idea]
By 1995 GE did achieve Operating margin of 14.4%
and inventory turns of almost 7 in 1995

Service Business
Future => offset slow growth in Products, started focus on
added value services.
Medical Business -> In Site
Real time diagnostic concepts applied in Aircraft and Power
systems.
Biggest growth opportunities => Providing service to customer.
Making existing assets of Customers more productive.
1980

1995

1990

2; 15%

Selling
Products to
1; 85%
Customers

2; 45%

Product
s
Products

1; 55%

2; 55%

TRANSITIO
N
Services

1; 45%

Product
s

1998

1; 33%

Helping our
2; 67%
customers
win

Closing out the decade

Didnt go by the trend.[breaking up
multibusiness companies].
Six Sigma Quality Initiative.[AlliedSignal borrowed form
Motorola]
Gary Reiner-VP of Business Development lead the Quality
Initiative.
GE was operating in error[3.4 defects per million operations
and costing $8 - $12billion a year]
Goal to reach Six Sigma quality levels company wide by
2000.

Six Sigma Quality

Tied 40% bonus to Individuals[Six Sigma was not optional].
Green Belts

Black Belts

4 weeks training
5 Months
implementation

6 weeks of
instruction in
statistic , data
analysis and
other six sigma
tools

Master Black
Belts
Full time six
sigma
instructors
mentored the
Black Belt
candidates
through the two
years process

Medical Systems= tenfold increase,62% reduction in

turnaround time.
Change the DNA of GE whose central strand is QUALITY.

"A Players" With "Four E's"

A
Players
Executio
n

Individuals with vision, leadership, energy

and courage.

Edge

Energy

Energize
others

Implemented Performance Appraisal System.

Globalizing the intellect of the company.
Continuously upgrading Quality of management was key
success of GE.

E-Business
Each unit had full time dyb.com team
focused to redefine the business
model.
Welch thought GE was late entrant to
Internet.
Through the process of Six Sigma,
GE has done the hard work which is
needed to support e-business.
Early results of digitizing the
company was success.

Reduced
Hierarchy, so
as to have
maximum
Control

Increased
focus
1.
Product
to
on MDI
service
Constant
2.
Staff of
Evolution
Process
Incentives

Work-Out
Speed, simplicity
& Confidence

Welch
s
FORC
E
Model

Long term
Results such as
stock option
based incentive

Thank You