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GEs two Decades TransformationJack Welchs LeadershipGroup 112P139 Ishpreet Singh12P141 Karan Jaidka12P142 Kshitij Agrawal12P143 Kshitij Ahuja12P146 Manav Gupta12P178 Vikas Jain

Companys time line

2When joined GE the U.S. economy had lot of problems:-

Welch came out as a transformational leaderTo do so set in motion series of changes to restructure the company over next five years.He had both authoritative and democratic styles of leadership

Neutron JACKEffective Strategic LeadershipVision and Mission

360 Degree feedback process

Weeding out Autocratic LeadersA Players and Four EsFix, Sell or CloseDeveloped Human and Social CapialA decade from now, I would like General Electric to be perceived as a Unique, high-spirited, Entrepreneurial enterprisethe most profitable, highly diversified company on the earth, with world quality leadership in every one of its product lines. -- Jack WelchServicesGECC InformationConstruction & Engineering Nuclear ServicesTechnologyIndustrial ElectronicsMedical SystemsMaterialAerospaceAircraft EnginesCoreLightingMajor Appliance Motor TransportationTurbine ConstructionEquipmentSupportLadd PetroleumSemi ConductorGE Trading Co.Utah Mining

VenturesCalmaOutsideHousewaresCentral Air-ConditioningTV&AudioCableMobilePower DeliveryRadio StationsThree-Circle Vision for GEWelch's VisionSold more than 200 businesses[SPIN OFF] and made over 370 acquisitions.Replaced the strategic planning system with real time planning.Built five-page strategy playbook.Budgeting process was redefined.[rather than internal comparison used external means]Insisted GE become more lean and agile resulting

Restructuring the Hard DriveDelayeringsector level

Downsizingelimination of about 123,450 jobs

Destaffingelimination of an additional 122,700 jobs

1980s most of the restructuring was completeJacks priorities were shifting to Culture

Second Stage of RocketA company can boost productivity by restructuring, removing bureaucracy and downsizing, but it cannot sustain high productivity without cultural changeWork OutBest PracticesWork OutBest PracticesTo get unnecessary bureaucratic work out of the system

Forum in which employees and their bosses could work out new ways of dealing with each other

Groups of 40-100 employees were invited to share views about the business and how it can be improved 3-Day session, there was no documentation of meetingIt was about increasing productivity through Competitive Intelligence[best practices of Ford, HP, Xerox, Toshiba]

Through best practices realization by managers that they were measuring/ managing wrong thingsSoftware InitiativesWorking PhilosophyGoing GlobalAutocrat and need to weed out from GEPeople were GEs key assets and are company's resource.Develop leaders aligned to GEs new vision and culture. Work Out Idea striked.Characterizations of Leaders

Introduced 360 degree feedback process.[rating employees on scale of 1-5]

Developing LeadersTo strengthening GEs Individual Businesses

Bonus and rewards for idea sharing and not just idea creation

Integrated DiversityBoundaryless CompanyThe Boundaryless company we envision will remove the barriers among engineering, manufacturing, marketing, sales, and customer service; it will recognize no distinctions between domestic and foreign operation Boundaryless Behavior (Third Wave)How good can you be?

Dont-punish-failure concept.[No disaster of Stretch target Idea]

By 1995 GE did achieve Operating margin of 14.4% and inventory turns of almost 7 in 1995

ManagerHITBasic Targetsaccountablenot accountableHigher GoalsRewardedStretch: Achieve the IMPOSSIBLESTRETCHService BusinessFuture => offset slow growth in Products, started focus on added value services.Medical Business -> In SiteReal time diagnostic concepts applied in Aircraft and Power systems.Biggest growth opportunities => Providing service to customer.Making existing assets of Customers more productive.

Products

ProductsSelling Products to CustomersHelping our customers winTRANSITIONProducts ServicesClosing out the decadeDidnt go by the trend.[breaking up multibusiness companies].Six Sigma Quality Initiative.[AlliedSignal borrowed form Motorola]Gary Reiner-VP of Business Development lead the Quality Initiative.GE was operating in error[3.4 defects per million operations and costing $8 - $12billion a year]Goal to reach Six Sigma quality levels company wide by 2000.

Tied 40% bonus to Individuals[Six Sigma was not optional].

Medical Systems= tenfold increase,62% reduction in turnaround time.Change the DNA of GE whose central strand is QUALITY.

Six Sigma Quality"A Players" With "Four E's"A PlayersIndividuals with vision, leadership, energy and courage.ExecutionEdgeEnergyEnergize othersImplemented Performance Appraisal System.

Globalizing the intellect of the company.

Continuously upgrading Quality of management was key success of GE.E-BusinessEach unit had full time dyb.com team focused to redefine the business model.Welch thought GE was late entrant to Internet.Through the process of Six Sigma, GE has done the hard work which is needed to support e-business.Early results of digitizing the company was success.

Welchs FORCE Model Work-Out Speed, simplicity & ConfidenceReduced Hierarchy, so as to have maximum Control

Long term Results such as stock option based incentiveProduct to serviceStaff Incentives Increased focus on MDI Constant Evolution of ProcessThank You