Jack Welch: CEO of the century

      • General
        • CEO of General Electric (GE) for 20 years from 1981 to 2001. He was influential CEO, both internally and externally
        • During his tenor, GE’s value increased from $13 billion to several hundred billion.
        • He was named by Fortune Magazine in 1999 “Manager of the Century”

 

  • Childhood
    • Born in 1935 in Salem, Massachusetts – only child
    • His parents were second generation Irish immigrants. Father – a train conductor and union leader.
    • His “strong-willed” mother , Grace, had a strongest influence in Welch’s characters and successes.
    • He spoke with stutter.
    • His participation in sport – hockey, basketball, baseball had profound impact on his life and career.
      • “Welch described one instance in particular when his hockey team lost a game, to which he responded by throwing his stick and pouting. Immediately afterward Welch’s mother marched straight into the locker room and took him to task in front of the team: “If you don’t know how to lose, you’ll never know how to win. If you don’t know this, you shouldn’t be playing”
  • Education
    • Received B.S. in Chemical Engineering from the University of Massachusetts in 1957.
    • M.S. and Ph.D. degrees in chemical engineering from  the University of Illinois in 1960.
    • He was the first in the family to go to college.
  • Early days in GE
    • Joined GE 1960 as junior engineer in Plastic division
    • Frustrated by bureaucracy and decided to quit
    • His boss, Reuben Gutoff, recognized Welch’s talent, and talked him into staying. Promised that he would provide Welch a more entrepreneurial work environment.
    • Increasing commitment with GE after the big blowup of chemical factory that Welch was responsible in 1963
    • Welch experimented with a different mixture of chemicals and it caused an explosion
    • He needed to explain to Reed, an executive several levels up
    • Unexpectedly, Reed  asked him why and what he hoped to achieve. The boss focused on what Welch learned from the incident and asked him for advice on how to avoid the explosions.
    • learning from mistakes and not blaming people if an attempt at something new went wrong…unless they repeated the same mistake more than once.
    • leaders are not infallible and need to admit to their own mistakes if they are to create a culture in which others are honest and admit to mistakes, too. Otherwise you get the myth that the leader can’t be wrong and everyone covers up evidence to the contrary, and also never admit that they themselves are wrong.
  • Being a CEO
    • He took 20 years to become the CEO
    • In 1981, he was selected, over six other candidates, the CEO of GE…climbing the corporate ladder of 29 levels of management
    • Dismantling of the bureaucracy
    • “Neutron Jack.” The name was derived from the neutron bomb. During a streamlining process, he laid off 135,000 GE employees—25 percent of the company’s workers.
    • Maintaining operations that were ranked first or second in their given field. In the next five years from becoming CEO, GE closed 73 plants and offices and sold 232 businesses.
  • Welch’s management style and philosophy
    • Customer satisfaction and positive relationships with both customers and employees were what ultimately made a business successful
    • He brought an air of informality to the company but informality could not have been mistaken for laxity, or kindness for weakness.
    • Top 20% performers deserved to be handsomely rewarded while the bottom 10% should be replaced.
    • Borderless organization and generalization
    • 4-Es Leadership Traits
      • Energy: Positive energy & make change.
      • Energizer:  Know how to spark others to perform.
      • Edge: Those with edge are competitive types. They know how to make the really difficult decisions
      • Execute:  Converting energy and edge into action and results
  • Key traits that led Jack Welch success
    • Confidence
    • Competitive
    • Arrogance
    • Vision
    • Passion
    • Open-minded
    • Energetic
    • Action and result-Oriented