Jack Welch and His Impact on General Electrics

Jack Welch, being a man of creativity and sincere hardwork changed the history of General Electrics by introducing many strategies in the organisation, which are dicussed in the coming paragraphs. General electrics was all about seeking and building great people. The secret was the system to choose and develop great people. This initiated a systematic structure and logic sequence so that every employees in the organisation knew and understood the rules and regulations of the game. Apart from this, an new addition was made to the formal structure (At the main business locations Human resource reviews, Two hour videoconference follow-ups and sessions to confirm and finalize the actions)that exists there was an informal and unspoken personnel review section. That much deep focus and carefulness was given on recruiting people really defined managing structure at GE. All these efforts were mainly done to distinguish GE’s best employees & managers from the rest of the pack.

Welch also developed a ranking tool named ‘Vitality Curve’ in the company. Each year every businesses was asked to rank all of their top executives: who took place within the top 20 percent, the vital middle 70 percent and the most bottom 10 percent. When employees did not meet the expectations of management they had to quit and leave the organisation. So, year after year, the bar of rankings was raised to a higher value, this vitality curve in tool increased the calibre and skills of the organization in a dynamic process, making each and every one employees in the organisation count and accountable for his or her own performance and misbehaviour. Welch also introduced a new concept named ‘boundaryless’ culture that would totally eliminate the unnecessary barriers among all the various functions in organisation. There was no more difference between ‘domestic and foreign’ and ‘suppliers and customers’ that is everybody becomes a part of a very process. Being Boundaryless also means rewarding those people who recognized and developed a good, fresh and new idea and also encouraged leaders to share their credit for ideas with their team. Every morning the people of General electrics have to wake up with the intention and goals of ‘Finding a Better Way Every Day’. Jack Welch also mainly described 4 types of managers in his organisation:

• Type 1: This type of managers delivers with commitment and shares the organizational values.
• Type 2: This type of managers doesn’t meet commitments and also doesn’t share organizational values.
• Type 3: This type has no commitment but shares organizational values. They will be provided with second or third chance.
• Type 4: They meet commitments but doesn’t share the values. This type of managers has no role in General Electrics.

‘Finding a Better Way Every Day’ wasn’t just a slogan and motive of General Electrics, it was also the essence an d is considered that important so it was put out on laminated cards for all employees. In the beginning of the 1980’s the CEO of General electrics globalization drive were put in charge of their own global activities and Jack didn’t give much importance for the global direction of General Electrics. In his mind, there was not even a single thought of global company – he purely believed the concept of companies are not global, but businesses are. In the early 1990’s General Elecrticals pushed its growth by acquisitions, alliances and by shifting its best people into global assignments. His view on globalization was contrarian as he moved General Electricals in areas of the world that were either in transition or out of favor. In 1995 the subject of quality came into the scenario of General Electricals – In fact Jack has never been a fan of quality movement– which became a concern of many General Electrics employees. At that time they had 35. 000 defects per million operations which was regarded as an acceptable rate but it yielded quite unacceptable results. Jack Welch wanted GE to shift to 6 Sigma quality level (less than 3. 4 defects per million operations).

Six Sigma was much more than a simple quality control and statistics by driving leadership to higher levels by providing tools and skills to think through tough and hectic issues. Six Sigma’s core is an idea that can turn a company totally inside out, focusing the organization outward on the customer. The best people in General Electricals became Six Sigma leaders. They were taken away from their jobs for up to two years to become ‘Black Belts’ in Six Sigma strategies and practices. Thousands of ‘Green Belts’, were able to solve problems in their everyday work environment, were also provided training. Six Sigma was backed up with its reward system. Since 1991 No General electrics employees can be considered for a management job without a tleast passing Green Belt training.

One fine day General Electrics goes digital. Jack Welch admitted that he was indeed super slow to recognize the power and opportunity of the Internet, but when he got into the track, he used the opportunity with full drive. He lately recognized that buying and selling became more faster, quicker, more global, more shorter time to reach the breakeven point. Jack Welch founded a number of things that have helped him lead General electrics effectively over the years:

1. Always maintain your integrity and have only one agenda.
2. Set the tone of your company.
3. Personal intensity of individuals often determines the organization’s intensity.
4. Maximize intellect and potential of your employees and organization.
5. Find and take the best ideas and share them to others.
6. Be open to what everyone in the organisation has to contribute.
7. People always first and strategy comes second.
8. Choose the right people in the right jobs at the right time.
9. Everybody in the organisation counts and everybody knows they count, a proper sound relationship should be maintained.
10. Be self-confident.
11. Have the courage to be open, to welcome new changes and new ideas.
12. Don’t be ever afraid to have your views challenged.
13. Proper Appraisal should be provided to employees all the time.
14. Always let your people stay aware of where they stand in the organisation.
15. Mind your culture always.
16. When merging establish a new culture.
17. Recognize the ultimate benefits of speed, quicker and faster actions.
18. Forget and ignore the Zeros.