Jack Welch of General Electric
Indeed GE’s success can be attributed to the 20-year leadership of CEO Jack Welch from 1981 to 2000. What is most striking here, that visibly shows how Welch’s leadership mattered to GE, was that two years after he retired, GE’s market value had fallen by 45 percent and the S & P index decreased by 32 percent. Many people think that Welch leadership was opportunistic. He gained prominence after doing well in his initial job at the Plastics division of GE where the Vice President recognized his efforts. After he threatened to leave because of receiving a meager reward in recognition of his efforts, he was asked to stay.
He worked within the system and was ranked as one of those candidates for CEO. It was said that he hated GE’s highly politicized and sanitized policies and he exploited the system while doing his hard work (Case Study: Jack Welch’s Creative Revolutionary Transformation of General Electric and the Thermidorean Reaction). Early Talent Development at General Electric Early talent development at General Electric was created to attune to the needs of creating various managerial positions during a vigorous growth stage.
The earliest measures taken by Charles Coffin when he succeeded Edison as CEO in 1892 involved the implementation of a merit-based system of rewards based on performance that was already measurable at that time. Therefore one can assume that the company already had in place employee evaluation systems as early as Coffin’s tenure (Bartlett and McLean, 2003). This initial foray into building talent in the company paved the way for the measures taken by his successors towards the same. During the tenure of Jack Welch, more and more Crotonville courses were designed for promotions.
Also, he had stopped recruiting from Ivy League and other prominent colleges and universities, and had created a special group for internal consulting, and most of these consultants evolved into managers of the firm. Moreover, Welch had initiated a change in culture– managers had to be in-born and bred. They had to work their way up from the bottom, and had to accept relocation moves in their career in order to climb the corporate ladder. Also, Welch moved the EMS consultants to the field offices, so that they could better monitor candidates for promotion.
To further trim down the list of candidates to those who were deemed suitable for higher positions, Welch developed a manager matrix that would classify managers according to their performance, and that would enable the firm to tell the bottom class managers to either improve or leave the company. Managers were then classified according to a ‘vitality curve’, with the same ‘sentence’ for the bottom 10% employees along the curve (Bartlett and McLean, 2003). Not all of his moves, though, were ethical. He managed to assert his power early on by consolidating a coup d’etat.
He wanted to seize the few neural centers of power and then seize the entire constituency (Malaparte 1931 as cited in Case Study). He practically did an overhaul of people, firing 167 out of 200 and adding 67 people whom he considered loyal. He also dissolved the bureaucracy and proved to all that he was indeed the man of the hour (Case Study: Jack Welch’s Creative Revolutionary Transformation of General Electric and the Thermidorean Reaction). The term management is used to refer to the tasks that managers do.
These tasks include planning, organizing, leading and controlling the work of an organization. In the case of General Electric (GE), the managers plan, organize, lead and control activities to ensure that their particular businesses are ranked either first or second against all competitors. CEO Jack Welch has a clear strategy for GE success. Part of the strategy is to improve continuously the quality of GE products and services. Every now and then, people in many different jobs may be expected to do some management tasks even if that is not their main focus.
For, example, quality control programs such as the one at GE involves employees throughout the entire organization in developing plans for improving quality. When GE Capital Services looks for ways to reduce errors in the bills, it sends to credit card customers, managers enlist the help of billing clerks and data processors. They will be empowered to reorganize some of their work and be expected to continue to look for new ways to control quality. In other words, they will be doing some management tasks, but they won’t become managers.
We reserve the term manager for people in jobs that involve primarily management tasks. Welch’s Kind of Leadership A leader connotes power. When we think of the word “leader” we usually think of the people who made a remarkable impact in our history. They are the ones who have the vision to guide people to have a dramatic change through time. Leaders pursue a mission in life to achieve a goal. They are usually idealists and sometimes radical, for their vision of a society (Coaching Leadership Style). A manager connotes organization.
Today when we encounter the word “manager” we usually think of the corporate managers. They are the ones who organize and manage things to run an organization smoothly. We envision them as the commanding officer in a company and the think tank of an organization. Jack Welch defines business leaders as individuals who can create and communicate a vision, bring passion to the vision while at the same time relentlessly pursue the vision to completeness. He also believes that “above all else, though, good leaders are open they go up, down and around their organization to reach people.
They’re informal. They’re straight with people and they never get bored telling their story” (Tichy & Charan, 1989, p. 3). In an article by Welch, he states succinctly, “A leader’s intelligence has to have a strong emotional component. He has to have high levels of self-awareness, maturity and self-control. She must be able to withstand the heat, handle setbacks and, when those lucky moments arise, enjoy success with equal parts of joy and humility. No doubt emotional intelligence is more rare than book smarts, but my experience says it is actually more important in the making of a leader.
You just can’t ignore it. ” (Four E’s -a Jolly Good Fellow). Leaders can motivate, inspire, be led and lead, while making the environment safe for risks and mistakes. Leaders also demonstrate the ability to lead by example, ethically, morally and purposefully. Leaders regularly communicate the vision and empower the culture within the organization. They continue to build trust and lead the challenges of a constantly changing workplace and society. Leaders understand that it is necessary to incorporate balance not only in the lives of others, but their own as well.
This encourages leaders to think about life and work differently (Directing. Money-Zine). As organizations continue to move away from the command and control structure to open, flexible, risk-taking and creative environments, changing the mental models organizations have of themselves should be led by leadership’s commitment from the top down. Today’s leaders encourage corporate entrepreneurship by exploring the organizations destiny. Leaders taking a systems approach at looking and exploring the forces at work and the interrelationships that make things happen in the organization are most often successful.