Ge s Two Decade Transformation Jack Welch s Leadership

8/18/2019 Ge s Two Decade Transformation Jack Welch s Leadership

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GE’S TWO-DECADE TRANSFO

JACK WELCH’S LEAD


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CONTENT

GE

OVERVIEW

ALL ABOUT

JACK WELCH

INITIATIVES TAKEN BY

JACK WELCH

GE’S VISION

& BEY

TWOS

ANALYSIS


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OVERVIEW

1

2

3

4

FOUNDED1878, Thomson Houston Electric Company (THEC)

MERGER1892, Between GE and THEC formed General Electric

HEADQUARTERSFairfield, Connecticut, U.S

REVENUE$ 147.300 Billion (as of 2012)

imaginatio


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ACHIEVEMENTS (2012-13)OVERVIEW

3rd Largest Company in the world (Forbes)

5th Best Global Brand (Interbrand)

6th Largest in USA (Gross Revenue)

7th Best company for Leaders (Fortune)

14th Most profitable company in the world (Fortun

15th Most admired company (Fortune)

19th Most Innovative company (Fast Company)


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SINCE 1973GE – CEOs


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REG JONES (1973 - 1980)PREDECESSOR

43 strategicunits: Tosupport

strategicplanning.

GE wasbenchmark for

others companies(Imitated its SBU

based structure &planning process).

Unable to reviewand approve

massive volumes ofInformation

generated by 43SBU’s.

Formed a coveringon GE’s

departments,divisions, groups

and SBU’s with“SECTORS”.

l

YEAR ACHIEVEMENTS

1970 “CEO of the Year” 3 times by h

1979 “CEO of the Decade”

1981 “Management Legend” by


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BRIEF INTRODUCTIONJACK WELCH

John Francis "Jack" Welch, Jr.(born November 19, 1935),

Peabody, MA

ALMA- MATER

•Salem High school

•University of MassachusettScience in Chemical Enginee

•University of Illinois at UrbaChampaign (M.S and PhD, 1

YEAR ACHIEVEMENTS

1997 National business hall of f

1999 Manager of the 20th cent

2001-2004 Forbes 400 richest Ameri


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CHALLENGES AS A CEOJACK WELCH

3

1

2

ECONOMY IN

RECESSION

HIGHEST UNEMPLOYMENT

RATES SINCE DEPRESSION

HIG


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WELCH’S EARLY PRIORITIESINITIATIVES

HARDWARE INITIATIVE

#1 or #2 - Fix, Sell or Closeo Three Circle Concept

o De-Staffing & Real TimePlanning

SOFTWARE INITIATIVE

o Work Out

o Best Practices


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THREE CIRCLE CONCEPTINITIATIVES

SERVICES

GECC Information

Construction & Engineering

Nuclear Services

CORE

LightingMajor Appliance

Motor

Transportation

Turbine

Construction

Equipment

TECHNOLOGY

Industrial Electronics

Medical Systems

Materials

Aerospace

Aircraft Engines

OUTSID

HousewaCentral A

TV & Aud

Cable

Mobile

Power De

Radio Sta

SUPPORT

Ladd Petroleum

Semiconductor

GE Trading Co.

Utah Mining

VENTURES

Calma


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DISCIPLINED DESTAFFINGINITIATIVES

“We don’t need the questioners & checkers, the

nit-pickers who bog down the process.….

Today each staff has to ask, “How do I add

value?” How do I make people on the

line more effective and competitive?.”

LEAN & AGILE:Making people productive and com


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REAL TIME PLANNINGINITIATIVES

FIVE PAGE STRATEGY PLAY BOOK

ONE PAGE ANSWERS TO 5 QUESTIONS:

1. Current Market Dynamics

2. Competitors’ Key Recent Activities

3. The GE Business Response

4. Greatest competitive threat over next 3 years

5. GE’s Business’s Planned Response


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BENEFITS OF “HARDWARE” INITIAINITIATIVES

Number ofEmployees(1981-89)

•404,000 to 292,000

Revenue

(1981-85)•$27.2 Billion to $29.2 Bil

Operating Profits(1981-85) •$1.6 Billion to $2.4 Billio


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THE FIRST “SOFTWARE” INITIATIVWORK OUT

ImplementationTeam (24

consultants)

Group of 40-100employees

3 day sessions

On the spotdecision on 80%

proposals.

IMPLEMENTATION

To design aprocess to get

unnecessarybureaucratic

work out of thesystem.

To create theculture of a

small company,where all feltengaged and

everyone hadvoice.

OBJECTIVE

An opendiscussion

forum

Employee couldgive ideas and

suggestions on

business andget immediate

responses to it.

OVERVIEW


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THE SECOND “SOFTWARE” INITIABEST PRACTICES

FOCUS MORE

ON HOW

THINGS GET

DONE

LEARNING

FROM OTHER

INDUSTRIES

IMPLEMENT

ATION

R E S U L T

M

f


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GO GLOBAL

Appointing PaoloFresco as Head,InternationalOperations

Rampant

Acquisitions

Taking advantage of glob

economic slow down• European Crisis- $17.5Bn

• Mexican Peso collapse

• Asian Economy Crisis (1997-9


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DEVELOPING LEADERS FOR TOMOEMPLOYEES

Keeping close tabs on top 3000 Executives

Succession Planning

Improved Packages/Stock Options

Training institute at Croton Ville

360 Degree Feedback

“A” Players (Characterized by 4Es – Energy, Energize, Edge, E


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PERFORMANCE APPRAISAL SYSTEEMPLOYEES

RANK RATING REWARD

1 Top 10% TOP Stock Options

2 15% STRONG Stock Options

3 50% HIGHLY VALUED Training

4 15% BORDERLINE Improve or Move

5 Bottom 10% LEAST EFFECTIVE Weed Out


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Boundary less

Behavior

Notion of“Stretch”

ServiceBusinesses

THE THIRD WAVEINTO THE 1990s


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Employees were dissatisfied with the qualityproduct.

GE was operating at error rates 10,000 timessigma quality level of 3.4 defects/million cos12 billion/year.

Series of planning, resource allocation, revie

communication meetings were done.

Participation in initiative was compulsory, 40was tied with it.

QUALITY INITIATIVESIX SIGMA


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MASTER

BLACKBELT

BLACKBELTGREENBELT

Training- 6 weeks in

statistics, dataanalysis and other six

sigma tools.

Training – 4 weeks

Implementation- 5Months project

aimed at improving

Quality.

Full time Six Sigmainstructors.

RESULTS10 Fold increase in life of CT scan X-ray tubes.

62% reduction in time at service stations.

30,000 Six Sigma projects were initiated a year.

IMPLEMENTATIONSIX SIGMA


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SUMMARY

P R O D U C

T I V I T Y

Restructuring

Removing Bureaucracy

Downsizing

Changing Attitude

CULTURAL CHANGE“going for the leap”


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COMPARISON

• Promoted internalcommunication

• Focus on performance &strictly quantifiable results

• mostly promoting from within

• Focused on production

• demanding and intimidating

• External communication(Investors & Third Parties)

• Allowed employees to comeup with innovative ideas

• Brought a number ofoutsiders into Organization

• Focused on marketing

•

Made GE moreenvironmentally conscious

• Friendlier and moreapproachable

J A C K W E L C H


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TOWS ANALYSIS

TOWS

ANALYSIS

T O

SW

Competition

Information security

Financial crisis

Media depictions

Evaluation and Analysis

Under-performing energysector

Threat to flexibility

Mergers andacquisitions

Research anddevelopment

Global recognition

Global strength ancompetitiveness

Excellent Manage

Diversified lines ooperation

Environmental ini


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PERFORMANCE2012

180

154 150 147 147

2008 2009 2010 2011 2012

CONSOLIDATED REVENUES

(In $ Billions)

16.9

9.912.4

14.916.1

2008 2009 2010 2011 2012

OPERATING EARNINGS

(In $ Billions)

• Total Industry Segment Revenue +

GE Capital Revenue (45%)

• Change in portfolio

• Sale of 49% stake of NBCU

• Rising profit from selling Air craft

engines and transportation

equipments

• Acquisition of Lufkin Industries

• Rise in orders from aviation and oi

GE’S VISION FOR 2013 & BEYONDSTRATEGIES


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GE’S VISION FOR 2013 & BEYONDSTRATEGIES

Margin Expansion

Growth from Emerging Economies

Product and Service launches

Energy, Healthcare and Aviation to drive growt

01

02

03

04


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THANKFOR YOUR A

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Ge s Two Decade Transformation Jack Welch s Leadership

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