Post on 21-Apr-2017
Presented By:-Ashis Kyal (PGDM3/1608)
GE’s two-decade transformation: JACK WELCH’S LEADERSHIP
OVERVIEW
1
2
3
4
FOUNDED1878, Thomson Houston Electric Company (THEC)
MERGER1892, Between GE and THEC formed General Electric
HEADQUARTERSFairfield, Connecticut, U.S
REVENUE$ 123.700 Billion (as of 2016)
• Founded in 1878 by Thomas Edison.• Focus on Generation , Distribution, and use of electric
power to become. • 1978 – Power Generation , household appliances,
lighting, Aircraft engines, medical systems and Diesel Locomotives.
INTRODUCTION
SINCE 1973GE – CEOs
1930Centralized
1950Decentralized
1960strengthen its corporate staff and develop sophisticated planning systems
REG JONES (1973 - 1980)PREDECESSOR
strategic 43units: To support strategic planning.
GE was benchmark for
others companies Imitated its SBU (
based structure & planning process).
Unable to review and approve
massive volumes of Information
generated by 43 SBU’s.
Formed a covering on GE’s
departments, divisions, groups and SBU’s with
“SECTORS”.
Country’s leading business
statesman.
YEAR ACHIEVEMENTS
1970 “CEO of the Year” 3 times by his peers.
1979 “CEO of the Decade”
1981 “Management Legend” by WSJ
BRIEF INTRODUCTIONJACK WELCH
John Francis "Jack" Welch, Jr. born( November 19, 1935), ALMA- MATER
•Salem High school•University of Massachusetts (Bachelor of
Science in Chemical Engineering, 1957)•University of Illinois at Urbana-
Champaign (M.S and PhD, 1960)
YEAR ACHIEVEMENTS
1997 National business hall of fame
1999 Manager of the 20th century
2001-2004 Forbes 400 richest Americans
CHALLENGES AS A CEOJACK WELCH
3
1
2
ECONOMY IN RECESSION
HIGHEST UNEMPLOYMENT RATES SINCE DEPRESSION
HIGH INTEREST RATES
WHAT IS WELCH’S REACTION TO THESE CHALLENGES?
“Better than the Best”
“Restructuring the Hard Drive”#1 or #2: Fix, Sell or Close Three Circle Concept DeStaffing & Real Time Planning
The Budgeting process was equally radically redefinedSold more than 200 businesses and made over 370 acquisitionsInsisted GE become more “lean and agile” resulting
Delayering: elimination of the “sector” levelDownsizing: elimination of about 123,450 jobsDivestiture: elimination of an additional 122,700 jobs
Replaced 12 of his 14 business headsThe Drastic Restructuring in the early-and mid-1980s earned Welch the nick name “Neutron Jack”
“A decade from now, I would like General Electric to be perceived as a Unique, high-spirited, Entrepreneurial enterprise…the most profitable, highly diversified company on the earth, with world quality leadership in every one of its product lines”. -- Jack Welch
WELCH’s VISION
THREE CIRCLE CONCEPTINITIATIVES
SERVICESGECC Information
Construction & EngineeringNuclear Services
CORELighting
Major ApplianceMotor
TransportationTurbine
ConstructionEquipment
TECHNOLOGYIndustrial Electronics
Medical SystemsMaterialsAerospace
Aircraft Engines
-
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.
MISSION
• Mr. Welch mission was to downsize, de-staff and de-layer the GE organization to streamline it to be more efficient and effective.
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.
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.
WORKOUT THE FIRST “SOFTWARE INITIATIVE IMPLEMENTATION
OBJECTIVE
OVERVIEW
• Implementation team (24 consultant)
• Group of 40-100 employees
• 3 day sessions
• On the spot • Decision on 80%• proposals.
• To design a process To get unnessary bureaucratic workout of the system.
• To create a culture of a small company, where all felt engaged and everyone had voice.
• An open discussion Forum employee Could give ideas and Suggestions on Business and get Immediate responses to it.
BEST PRACTICES THE SECOND “SOFTWARE”
RE
SULT Productivity Increase
Managers realized the key focus area of business
FOCUS MORE ON HOW
THINGS GET DONE.
LEARNING FROM OTHER INDUSTRIES
IMPLEMENTATION
EMPLOYEES DEVELOPING LEADERS FOR TOMORROW
• Keeping close tabs on top 3000 executive
• Succession Planning
• Improved Packages/Stock options
• Training institute at Croton Ville
• 360 Degree Feedback
BOUNDARYLESS BEHAVIOR
Integrated Diversity
Boundary less 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 …..
STRETCH
•1990 , Welch Introduced the notion of “stretch” to set performance targets and described it as “using dreams to set business targets, with no real idea of how to get there.”•Stretch Targets did not replace traditional forecasting and objectives-setting process.
ACHIEVING THE IMPOSSIBLE
SYSTEMs PLANNING
Welch got rid of the laborious strategic planning system and its corporate planning staff. He developed a simple one-page
answer to businesses five questions concerning current market dynamics. Competitors key recent activities and GE business response. The greatest competitive threat over the next three
years and GE’s planned response.
STAFF COMPETENCIES
STAFF IN FOUR LIGHTS
Those who delivered on commitments
Those individual who did not meet commitments
Those individual that did not meet commitments
Those individuals who met all commitments
STAFFING AND STAFFING
DEVELOPMENT Welch wanted to ensure that his staff
understood the culture he wanted implemented at GE. He provided for the necessary training to help his staff members develop into the leaders and employees he felt GE needed to survive and
maintain productivity.
MAINTAIN PRODUCTIVITY
SIX SIGMA QUALITY INITIATIVE
• Employees were dissatisfied with the quality of its product.
• GE was operating at error rates 10,000 times the six sigma quality level of 3.4 defects/million costing $8 -$12 billion/year.
• Series of planning, resource allocation, review, and communication meetings were done.
• Participation in initiative was compulsory, 40% Bonus was tied with it.
SIX SIGMA IMPLEMENTATION
GREEN BELT
BLACK BELT
MASTER BALCK BELT
Training-4 weeksImplementation-5
months project aims at improving
the quality
Training-6 weeks in statistics, data
analysis and other six sigma tools.
Full time sig sigma instructor
“A Players” with “Four E’s”RAISING THE BAR
“A Players” “Four E’s”
• Individuals with vision
• Leadership
• Energy
• Courage
• Energy
• Energize other
• Edge
• execution
CONCLUSION
• Leaner and more efficient
• Challenge for the future
• 360 degree review process
ANALYSIS
• Customer focused vision• Accountability and commitment• Self confidence• Passion for excellence• Stimulate and relish change