Jack Welch & GE
Analysis of case study
Zala Pushpendrasinh B, (GMP -25)
1) ....Analyse various aspects of Jack Welch’s leadership style.
Jack Welch worked with team. His success was his ability to make people think. He was ready to accept ideas from anyone/anywhere rather than imposing his thoughts. As a leader he was always interested in communicating up to last employee. He believed in enrolment of people. The systems he had like feedback system, review system, incentive systems, training system, motivating systems were complementing each other to achieve goals. This system made people part of real action.
He led by self example. He made sure that things which are important for organization are taken seriously.
As a leader he had vision, he had ability to see/ imagine/ think what other couldn’t. He was good motivator for team foe E.g. his statement that “No 1 or No 2 in all businesses or get out of business” worked as positive motivation as well as threat motivation.
He was loyal to his organization & this kind of loyalty generates confidence in various stakeholders.
With 2.4 Billion US$, net of total sell & purchase of organizations & investing in existing businesses, he made GE US$ 480 Billion company from US$ 13 Billion firm. He believed in people & empowered people. He made people think big & ahead.
He was consistent & committed in implementing strategy. (Like seasons in a year, rhythms & rituals). He put up many systems in place, systems like Feedback collection, brain storming to collect ideas, enrolment of employees by allowing them to decide goals of organization collaboratively, Periodic Review system, Nurturing Human capital etc.
He created an atmosphere were innovative, achiever got recognized & rewarded. This process created role models within organization. SIX sigma which works by benchmarking of best practices for better results & depends on cross departmental, cross functional, cross industry learning & team work among members , was backed by Jack Welch with various incentive program.
The way he was doing restructuring, M & A and sell off shows that he was a risk taking leader.
2) .....Analyse the strategies used by Jack Welch, which made GE the most valuable company in the world.
· M & A with long term view.
· Sell off of non strategic, non performing units.
· Restructure organization.
· He could overcome biggest constraint of his era - Labour union. This took him ahead of his competitors & he could look prospects of any industry in different way.
· Outsourcing or relocating for cost advantage.
· Change management, reorganization of GE.
· Internal Communication, meetings, trainings of 15000 employees by himself, CD distribution in different languages. So communication strategy including enrolment strategy internally.
· Team motivation - No 1 or No 2 in all businesses or get out of them. (motivation :positive & also threat)
· People management, human capital management.
· PMS- Performance management system for employees.
· Focus towards customer.
· SIX Sigma implementation. Quality improvement.
· Learn ideas/ find solutions from cross industry, cross function, cross department. (E.g. learning from Wal-Mart, Motorola)
· Strategy of having back up plans.
· Time & work management. He knew where he was required & he made sure that he was available there.
Jack Welch used above mentioned strategies to make GE most valuable company. With his risk taking ability & ability to see beyond, he & his team took swift decisions. M & A, sell off’s, restructuring made GE an open organization with minimum layers. They acquired cost advantage, knowledge advantage, location advantage, scale advantage & integration advantage by implementing above mentioned stretegies.
3) ....Any weakness in Jack Welch’s leadership style.
1401 transactions of acquisition & sell off, brand Image of GE & himself went down due to such transaction in society, as it was done purely profit motive. Ruthless retrenchment, sell off, relocation create negative image in society. While doing such things he could have focussed on explaining his motives to society by how these things would benefit society in long term.
He made lot of efforts in enrolling internal people in his organization in explaining his ideas & logic behind that but as per data given in case study similar efforts were missing in communicating with outside world. If he had communicated with society in same way, he could have developed positive brand of GE in society. Had he done that he might had succeeded in taking over Honeywell.
Too much innovation, aggression & result at any cost attitude make people target temporary short term benefits but in long term it can be detrimental. Under pressure to prove them & perform, managers could take short sighted decisions. Controversy like contamination of Hudson River could be result of such short sighted thinking.
Even though if such things happen, he could have used that thing to show his care for society. Rather than going into litigation, he could have told society that GE would do river cleaning for the benefit of society though GE might not be responsible for it. This kind of stand could have avoided negative media publicity & helped develop brand GE as responsible brand. His only profit motive might have stopped him thinking on that line.
He couldn’t project GE as responsible company by enrolling political bodies & social groups.
Only profit orientation made him neglect social issues like promoting minorities & women. He might have employed women & minorities, but he might not have bothered to project these things. This could have been focused & used to create positive brand image of GE in society.
As a leader you should not only think of benefit for yourself, but also you should think of win – win solution for all stakeholders. As per case study of “GE & Jack Welch”, Jack Welch did not follow this kind of thinking, which is weakness of Jack Welch.
