| Name: | Jack Welch |
| Variant Name: | John Francis Welch, Jr |
| Birth Date: | November 19, 1935 |
| Place Birth: | Peabody, Massachusetts, United States of America |
| Nationality: | American |
| Gender: | Male |
| Occupations: | business executive |
Welch was born on 
November 19, 1935 into a middle class family in Peabody, Massachusetts, the only child of a train conductor/union leader and a strong willing mother Grace.
Welch's competitive fires can be traced back to his teenage years playing hockey, basketball, and baseball. In high school, Welch was co-captain of the golf team, lettered in hockey, and served as treasurer of the senior class.
Welch combined popularity and intelligence with a quick wit. With his mother encouraging him, Welch studied chemical engineering at the University of Massachusetts, becoming the first person in his family to go to college. Several professors acted as Welch's mentors and persuaded him to attend graduate school. He then went on to earn a doctorate from the University of Illinois in 1960.
Joined General Electric
After graduate school, Welch joined General 
Electric as a junior engineer in Pittsfield, Massachusetts. Frustrated by the company's bureaucracy, Welch decided to quit a year later. He saw little room for advancement at GE. Reuben Gut off, recognized Welch's talent, and talked him into staying.
Welch climbed the corporate ladder, and convinced that even a huge corporation like GE could remain nimble. By 1967, Welch was among the rising young stars in the GE plastics division. In his early years, he helped GE Plastics explode from a $28 million after-thought into a billion dollar business.
The "Neutron Jack" Years
An early spotlight was thrust on Welch when GE purchased RCA, the parent company of NBC, in late 1985 for $6.3 billion in cash. At the time, it was the largest corporate acquisition in history and brought RCA back into the family. GE had founded RCA in 1919, but had to sell the subsidiary in 1933 because of antitrust threats.
Welch was named a vice president of GE in 1972. He moved up the ranks to become senior vice president in 1977 and vice chairman in 1979. After a fierce competition for the top spot, Welch was named chairman in 1981, the youngest CEO ever appointed at GE. By 1982, Welch had disassembled much of the earlier management put together by Jones.
Through the 1980s, Welch worked to streamline GE and make it a more competitive company. He also pushed the managers of the businesses he kept to become more productive. Welch's philosophy was that a company should be either #1 or #2 in a particular industry, or else leave it completely. Although he was initially treated with contempt by those under him for his policies, they eventually grew to respect him.
Welch attracted controversy almost immediately. He was much different than his predecessor, the British gentleman Reginald H. Jones. Welch was brash and told managers that if they did not move quickly enough, he would "kick ass." The new leader was obsessed with turning GE into a flexible, lean business that ranked first or second in every industry in which it did business.
During the 1990s, Welch helped to modernize GE by shifting from manufacturing to financial services through numerous acquisitions. Welch adopted Motorola's Six Sigma quality program in late 1995. He led the company to massive revenues. In 1999 he was named "Manager of the Century" by Fortune magazine.
Welch set high financial goals for NBC and turned the business around by cutting costs and replacing unhappy network executives. By 1997, after more than a decade of Welch’s cajoled, NBC became the undisputed leader of network television. GE transformed NBC into a profitable company that still provided high quality.
Welch and GE were successful economically across the board. However, during his first seven years as CEO, Welch cast off more than 100,000 workers, nearly 25 percent of GE's workforce. The mass layoffs earned Welch the derogatory nickname "Neutron Jack." Critics equated his name with corporate greed, arrogance, and contempt for workers. GE sold off many of its traditional businesses, such as house wares and televisions, and moved into high-tech manufacturing, broadcasting, and investment banking.
When Jack Welch left GE, the company had gone from a market value of $14 billion to one of more than $410 billion at the end of 2004, making it the most valuable and largest company in the world.
At the time of his retirement, Welch received a salary of $4 million a year.
General Electric is a large diversified industrial and financial company, whose major product lines include appliances, lighting products, aircraft engines, plastics, power systems, medical imaging, broadcasting, and a wide range of financial services (consumer finance, leasing, private equity, credit cards, and so on. In 2000, GE employed 223,000 people in over one hundred countries and reported net earnings of $13b on revenue of $130b.
General Electric was incorporated in 1892 as a combination of three existing companies, one of them founded and run by the inventor Thomas Edison. It was an original member of the Dow – in fact, the only one still in existence. Over the years, it has been wildly successful, reinventing itself as time and markets changed.
List of assets owned by General Electric
Primary business units
- GE Capital
- GE Technology Infrastructure
- GE Energy Infrastructure
- NBC Universal
- GE Consumer & Industrial (soon to be a spin-off)
Media
- NBC Universal (NBC merged with non-music entertainm ent assets of Vivendi Universal - GE has 80% controlling share)
- Universal Studios
a) Leadership
The act of motivating people to achieve their goals is known as leadership. Jack Welch was a great business leader; he had a unique style of leadership. Jack Welch had attributed his leadership style to his mother in his book “Straight from the gut”. In his book he said “If I have any leadership style a way
of getting the best out of people, I owe it to her”
Jack Welch’s mother was very tough and aggressive, warm and generous, she was a great judge of character .She helped Jack a lot in building his self confidence, and this is what he tries to build in every executive who has ever worked with him. Building self confidence in others is ahuge part ofleadership. It comes from providing opportunities and challenges for people to do things they never imagined they could do – rewarding them after each success in every way possible.
Style of leadership
Jack Welch had a unique style of leadership which is explained as follows:
Ø Leaders relentles
sly upgrade their team, us
ing every encounter as an opportunity to evaluate, coach and build
selfconfidence.
Ø Leaders make sure people not only see the vision, they live and breathe it.
Ø Leaders get into everyone’s skin, exuding positive en
ergy and optimism.
Ø Leaders establish trust with condor, transparency, and credit.
Ø Leaders have the courage to make unpopular decisions and gut calls.
Ø Leaders probe and push with a curiosity that border on scepticism, making sure their questions are answered with action.
Ø Leaders inspire risk taking and learning by setting the example.
Ø Leaders celebrate.
Jack Welch, the former CEO of General Electric (GE), is a propone
nt of the “4E” model of leadership development. Great leaders share these 4E characteristics:
• The 4E leader has energy – A great leader has a big motor and is always on the go, displaying limitless energy. If life had a speed limit, this leader would constantly get tickets
for hyper-charged “drive
.” Even at warp speed, this leader embraces change.
•The 4E leader energizes – A great leader not only has energy, he or she can transmit energy to others. These leaders “spark others” to action, inspire people to respond to their “vision” and share the credit if that’s what it takes to get going.
•The 4E leader has edge – As a “strong competitor,” the leader tests the margins,
makes “difficult decisions” and doesn’t hesitate to hire or
fire.
•The 4E leader executes – A leader “delivers results” an
d is a “consistent performer.” Activity and productivity are not synonymous – that’s one of the toughest lessons for leaders to learn. Great leaders turn energy into production.
The definition of competition is, when someone is trying to win something or be more successful than someone else. Jack Welch was a highly competitive person.
He developed this trait very early in life from his mother. He was involved in various sports activities which inculcated this trait in his personality. One such incident is with hockey, where he could not tolerate his defeat and showed a reaction (anger) which was not in the spirit of the game. He realised the importance of competitive spirit when his mother in front of his other team mates caught hold of his collar and said “If you don’t know how to lose, you will never know how to win. If you don’t know this you shouldn’t be playing.”
His competitive trait was shown during his tenure in GE. He was the best among the lot. When Jack was the CEO he used this trait to make GE a great success. One of the incidents was the RCA deal. He got the company back to GE and his aim was to make the company global and top in that field.
c) Strategic Planner
As quoted in his book “Winning”, “Strategy means making clear-cut choices about how to compete. You cannot be everything to everybody, no matter what the size of your business or how deep its pocket.” Planning strategies was Jack’s very useful trait
during his work. He inculcated this trait during his childhood where he used to plan his studies and used to
act upon it. His mother played a key role in acquiring this trait in him. She always wanted Jack to plan and get good results (only A’s and not B’s). This trait played a key role in Jack’s tenure. He used to
plan his work he had to perform as shown in figure.
In real life, strategy is actually very straightforward. According to Jack “When it comes to strategy, ponder less and do more.”
The strategies used by Jack Welch are in three steps:
Ø First, come up with a big aha for your business-a smart, realistic, relatively fast way to gain sustainable completive advantage.
Ø Second, put the right people in the right jobs on drive the big aha forward.
Ø Third, relentlessly seek out the best practices to achieve your big aha, whether inside or out, adapt them, and continually improve them.
d) Practical Person
i) Face Reality
Face reality, and then act decisively. Most mistakes that leaders make arise from not being willing to face reality and then acting on it.
The beginning of Welch’s tenure GE administration was built around three hundred separate businesses, a recipe for inefficiency. Welch changed the corporate structure of GE. Among his most noble feats was turning the company's 350 businesses into twelve divisions of the company and reducing the management structure from twenty-nine levels to only six.
ii) Get Rid of Bureaucracy
The way to harness the power of your people is “to turn them loose, and get the management layers off their backs, the bureaucratic hackles off their feet and the functional barriers out of their way.”
Jack Welch felt underpaid and undervalued, partly due to the standard bonus he received when he felt he deserved more and also because of the bureaucratic system followed at GE. In fact, Welch accepted a job offer from another company; but was convinced by Reuben Gut off to stay. Reuben Gut off, was a young executive who was two levels higher than Welch. He decided that the man was too valuable a resource for the company to lose. He took Welch and his first wife Carolyn out to dinner at the Yellow Aster in Pittsfield, and spent eight hours trying to convince Welch to stay. Gut off promised to change the bureaucracy to create a small-company environment.
In 1981 Jack Welch was not considered a leading contender for GE's top job. He achieved the position over six other candidates with his performance and earnings record. He did not have a formal master plan to reorganize GE. He had a vision for GE and he worked towards it. The first step in realizing that vision was a dismantling of the bureaucracy.
iii) Eliminate Boundaries
In order to make sure that people are free to reach for the impossible; you must remove anything that gets in their way. “Boundarylessness” describes an open organization free of bureaucracy and anything else that prevents the free flow of ideas, people, decisions, etc.
Welch was successful as a CEO. However, during his first seven years as CEO, Welch laid off more than 100,000 workers, nearly 25 percent of GE's workforce. The mass layoffs earned Welch the nickname "Neutron Jack." Critics equated his name with corporate greed, arrogance, and contempt for workers. GE sold off many of its traditional businesses, such as house wares and televisions, and moved into high-tech manufacturing, broadcasting, and investment banking. Jack quickly began turning the bloated company around. He told the company's various businesses to be first or second in the market and demanded performance.
Jack Welch firmly believed that top performers deserved to be handsomely rewarded, an attitude he had retained since his first job at GE. He created a performance-review program to identify the top 20 percent of employees, who were rewarded with bonuses, as well as the bottom 10 percent, the "lemons," who were typically fired and replaced. Welch supported the distribution of wealth as far as possible throughout the company and understood when considering bonuses that life-changing fortunes were sometimes at stake.
e) Visionary & Innovative
As quoted by Welch in his autobiography “Straight from the Gut”, “I have always felt that chemical engineering was one of the best backgrounds for a business career, because both the class-work and required thesis teaches you one very important lesson: There are no finite answers to many questions. What really counted was your thought process”.
From this we infer that Welch was a very innovative person. He believed that every situation can be handled in a number of ways using our thought process.
f) See Change as an Opportunity
Change is a big part of the reality in business.
Welch was a process engineer in the early years at GE. He was shifted to various departments frequently. To many people such change would be a disaster. It is very difficult to adjust yourself into new environments. Welch adjusted well to these changes. In the early years at GE Welch had learned to see change as an opportunity.
Welch attracted controversy almost immediately. He was much different than his predecessor, Reginald H. Jones. Welch was harsh and told managers that if they did not move quickly they would not have a place at GE. The new leader was obsessed with turning GE into a flexible, lean business that ranked first or second in every industry in which it did business.
Entire lines of business were dismantled or sold off under Welch's tenure maintaining operations that were ranked first or second in their given field. By 1985, billions of dollars had been made or saved through sales and layoffs. Welch sought opportunities for growth by reinvesting those billions and considered possible takeover targets. He eventually settled on RCA, originally a GE startup but at the time of the merger a top competitor in the high-tech and defense industries. The merger made sense as an effort to consolidate American manufacturing in those fields against Japanese competition. The deal was the largest merger of its kind in the history of American business, with RCA selling for nearly $6.3 billion. Within three years half of RCA's premerger workforce was gone, as well as most of its businesses, including the radio network, which had been in operation virtually since radio was born. By the late 1980s only the National Broadcasting Corporation (NBC) television network and RCA's defense businesses remained.
An early spotlight was thrust on Welch when GE purchased RCA, the parent company of NBC, in late 1985 for $6.3 billion in cash. At the time, it was the largest corporate acquisition in history and brought RCA back into the family. GE had founded RCA in 1919, but had to sell the subsidiary in 1933 because of antitrust threats.
Welch set high financial goals for NBC and turned the business around by cutting costs and replacing unhappy network executives. GE transformed NBC into a profitable company that still provided high quality.
g) Get Good Ideas from Everywhere
New ideas are the lifeblood of business. “The operative assumption today is that someone, somewhere, has a better idea; and the operative compulsion is to find out who has that better idea, learn it, and put it into action - fast.”
Besides the raw numbers measuring efficiency and profits, more personal aspects also characterized Welch's leadership. He brought an atmosphere of informality to the company that stemmed from his belief that General Electric was little different in practice from a small local market. Customer satisfaction and positive relationships with both customers and employees were what ultimately made a business successful. Whether the product for sale was turbines or apples, the customer would determine the success of the enterprise. Thus, Welch made efforts to cultivate relationships with suppliers, customers, and employees. Knowing his employees had a direct impact on productivity, Welch communicated with workers often enough for them to feel that at any moment they could receive a note or a visit from the boss. His efforts at communication engendered senses of value and pride in employees, in that if a task was important enough for Welch to care about, it was important enough to perform with the utmost effort. As a result of his person ability, everyone knew Welch simply as "Jack."
Welch was very good at recognising talent. As quoted in his book “Straight from the Gut”, “I was in my VW on the New Jersey Turnpike when the engine blew. I got towed to a local garage where I met a German Mechanic, Horst Oburst. Over the course of the next two days, while he was scrambling to get parts, we struck up a relationship. Impressed with his gutsy determination, I offered him a job. A week later, he was in Pittsfield on the payroll at GE Plastics.”
Welch valued human intelligence. He was always on the lookout for people with creative ideas as he a seen a vision for GE.
h) Less Formal
“You must realize now how important it is to maintain the kind of corporate informality that encourages a training class to comfortably challenge the boss’s pet ideas.”
Informality was also standard in company correspondence. Welch faxed handwritten notes to anyone in the company who he felt deserved personal communication, whether to motivate, correct, or congratulate, from top management to laborers. Welch also personally reviewed everyone who worked directly for him, handwriting extensive performance evaluations that sometimes ran several pages. This exercise not only gave specific and ongoing feedback to employees but was a chance for Welch to reflect on the businesses that each employee was leading. The atmosphere of informality was perhaps most critical among GE's top leadership, where the confidence that came from being in familiar company encouraged executives to openly praise or criticize each other—or even Welch himself.
i)Extrovert
The people who are extroverts are outgoing, social and gregarious. Jack Welch was an extrovert. He had inherited this quality from his mother who had helped him, in building his self confidence. During his early years, Jack Welch used to stammer. To this his mother explained to him that his mind worked faster than his mouth. This explanation did not allow Jack to get de-motivated.
Jack also took part in a lot of sports activities which helped him in building his confidence.
Jack was a very social person. He had a lot of friends during his school and college days.
This can be inferred from an incident in “Straight from the gut”, where he has explained about his parties and his outings with his friends from the Fraternity house.
As quoted by Jack Welch from his book “Winning”, “I don’t know if it’s good or bad but the world generally favours people who are energetic and extroverted. Jack Welch who was an extrovert himself always valued people who were also extroverts.”
Extroversion: This trait expresses one’s comfort level with relationships.
Jack Welch scores high in this dimension as we have explained he was extrovert, gregarious, assertive, and sociable.
Agreeableness: This dimension refers to individual’s propensity to defer to others.
Jack was an assertive person; he scores average in this dimension because until and unless someone give him a strong reason he would not believe them.
Conscientiousness: This is measure of reliability.
Jack Welch was conscientious and highly organised, he score high in this dimension. He had high standards and always strived to achieve his goals.
Emotional Stability: This dimension stands a person’s ability to withstand stress.
Jack Welch was calm and able to deal with stress but he sometimes experience feeling of guilt, anger and sadness and scores average in this dimension.
Openness to experience: This address one’s range of interests and fascination with novelty.
Jack Welch was open to new experience with broad interests and is very imaginative and scores high in this dimension.
Strengths
•Welch inherited the company which already had strong leadership
•Welch turned the company focus to leanness and agility
•Removed numerous hierarchies whether vertically or horizontally
•Restructured the company through phases starting with: #1 or #2, sell or close, to work out and best practices, focus on the global market, Bounderyless behaviour and stretch, focus in the services industry and finally focusing on E-business.
•Focus on building a strong intellectual capital by educating and rewarding performance
•Focus on the services sector
•Focus on value added services and differentiation
•Involvement of everyone in the workforce
•Firing even top management (before they become the rotten potato in the bag)
•Never being content with achieved success
Weakness
•Job insecurity as results of layoffs.
•Management exhaustion from pressure
•Firing competent people who did not adhere to the new culture
•The shift to the services sector creates a reliance on other manufacturers to assure quality and efficiency
•Motivation through fear.
Opportunities
•Quick diagnosis and problem solving mechanism
•Quick response to changes in the market
•Always searching for innovation and remaining above the curve
•Becoming the industry’s trend setter
•Motivated workforce
Threats
•Leadership change
•Diminishing Investor’s confidence
•Overlooking short-term objectives
Jack Welch’s attitude towards management boils down to a few very simple ideas: breaking down hierarchies, ensuring free information flows throughout the organization, and encouraging people to talk, listen and be open to new ideas. When he first became a GE vice president at the age of 36, he “stalked out on the plant floor, or picked up the telephone to deal directly with anyone at any level when a problem came up” and that is the organization Jack Welch has attempted to build in terms of communication.
Welch succeeded in transforming a complacent behemoth into an energized company ready to face world competition. By knocking down the organization and by removing unnecessary layers of bureaucracy, he liberated employees and empowered them to make decisions and affect their jobs, as well as the company as a whole. An additional sense of empowerment was relayed through various communication, training and motivation mediums.
Foremost he underlined his words with accompanying actions and an exemplary attitude, avoiding the well known saying that words by themselves are empty. Welch created and opened communication channels at GE, allowing for unprecedented networking, teamwork, and openness to take place at GE. All of these factors combined to form a motivating force for the employees of GE. This motivation in turn has lead to a decade of outstanding performance by Jack Welch and General Electric Corporation.
