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GE's Two Decade Transformation Jack Welch's Leadership Case Solution
The case outlays the tenure of Jack Welch as the CEO of General Electric, the numerous initiatives he undertook and what he expected from his team. Welch introduced numerous ground breaking ideas at GE; for example, “Work-Out” – designed to empower employees - and “Best Practice” – aimed at learning from the other rapidly growing companies. Welch cultivated the culture of idea generation and sharing at GE and is credited as the most important individual behind what GE is today.
Following questions are answered in this case study solution:
What is your evaluation of Jack Welch's leadership of General Electric?
What are his objectives in the series of initiatives he launched in the late 1980s and 1990s? What are the linkages between achieving these objectives and General Electric's performance?
Why did Jack Welch invest so heavily in the Work-Out process? What is he trying to accomplish? How is it related to innovation?
What are the assumptions about people and organizations that seem to underlie his view of leadership?
What does Welch consider to be the appropriate role of the general manager?
How does he define an effective leader within General Electric?
GE s Two Decade Transformation Jack Welch s Leadership Case Analysis
1. What is your evaluation of Jack Welch's leadership of General Electric?
Jack Welch’s preferred style of management was based upon the traits of openness, candor and facing reality. During his tenure as the top executive at General electric, Welch made sure that the above mentioned traits form the core of GE’s organizational structure, something he ensured through leading by example. Welch took over as CEO in early 1980’s and from the very beginning made it sure, through “Fix, Sell or Close”, that all the stakeholders understand his mission to take all the GE businesses to the top 2 positions in their respective industries. Welch was a loud proponent of the idea of change, and his team was expected to embrace it too.
As the top executive at GE, Welch initiated the change process by peeling of different layers of the old bureaucratic system in place at GE, thus making sure that all the major department heads report directly to him. In addition, his team of managers was expected to have the same commitment to management values. Welch made it mandatory for his team members to have the willingness to take charge, to push the envelope, to think out of the box and to be an effective team player. Those who embraced the company values were in return awarded with generous bonuses and incentives.
Welch was a strong advocate of open communication and sowed the seeds for a culture characterized by “speed, simplicity and self confidence”. It was his commitment to these values that pushed him to roll out the organization wide “Work out” which was basically a forum where managers and employees interacted with each other in order to chart out the future path of the company and to tackle the current issues. One important aspect of his personality was that he never stopped at his past successes but always kept looking for new ways to improve growth rate and bring new innovative solutions. It was his pro-active approach to management which led to the creation of programs like “Best practices”, focusing on learning from other successful ventures.
Welch was fully involved in every facet of the business and always had complete faith in his team. He understood the importance of involving employees and making them realize that they are the true owners of the organization. Another thing, which must be mentioned here, is that as a CEO Jack Welch never stopped at any juncture even after huge successes because he knew that if the organization keeps innovating and increasing its productivity the base line would automatically improve.
2. What are his objectives in the series of initiatives he launched in the late 1980s and 1990s? What are the linkages between achieving these objectives and General Electric's performance?
Welch’s mission was to take every business of GE to the top two slots in its respective industry, and he hoped to do so by building an environment which optimized “openness, candor and reality”. He wanted the organization culture at GE to be dominated be “speed, simplicity and self confidence”. Welch used to teach at the Management Development Institute at GE, and the idea for the “work-out” plan dawned on him during one of those sessions. These sessions were geared towards providing every employee with the opportunity to become part of the decision making process; problems were discussed, potential solutions were identified, and final presentations produced to be presented to the top management. The bosses were expected to give their decision on at least 80% of the proposals, a process which led to two fold increase in productivity.
Jack Welch believed in continuous improvement through learning and this belief led to the formation of “Best Practices” program. The objective was to identify those companies which are growing at a faster rate as compared to GE, study them and draw a conclusion about what are they doing differently. Under this program, the Six Sigma process was first identified which led to cost cutting and quality improvement.
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