Jack Welch and the GE Way Essay

This case focuses on David Sokol, an executive who has made a “name” for himself in recent years within the energy industries. After becoming recognized as a successful “turnaround” agent for troubled companies, Sokol was hired in 1992 to serve as the chief operating officer of JWP, Inc., a large, New York-based conglomerate. At the time, JWP had an impressive history of sustained profits and revenue growth that was being threatened by the company’s far-flung operations and unwieldy organizational structure. Unknown to Sokol, JWP’s impressive operating results over the prior few years had been embellished by the company’s

Evaluating his approach to bringing about change in his organization. Comparing his approach with that of Jack Welch.

Analyzing GE’s corporate-level strategy from 2001 – present with Jeff Immelt as CEO, GE focuses on the growth and development platforms. Technology is the key driving force for GE’s future and growth. Advancements in industries such as energy, health and aviation fueled demand for cleaner and more efficient energy production. GE identified new markets with potential high-growth that offered attractive returns through strategic mergers and acquisitions. As CEO, Jeff Immelt established a process for identifying projects that offered attractive growth potential which were then nurtured and treated as special projects or initiatives that were not subject to strict budget constraints. Immelt introduced GE’s three strategic imperatives as: (1) sustaining its strong business model, (2) strengthening the business portfolio, and (3) driving its growth initiatives. www.ge.com

According to Farrey’s detailed description of former General Electric CEO Jack Welch and his 20-70-10 model, which he used to improve his efficiency and profitability at GE by eliminating the weakest performers every year, the author seems to agree with Welch’s belief that children can thrive even without the benefit of highly competitive team sports. However,even the views of Jack Welch himself seem to contradict both Farrey’s and Welch’s own arguments at times. For example, although Welch is adamant that he and his teammates at the Pit succeeded without the benefit of coaching, first rate equipment, or picturesque facilities, as an adult Welch seems to change direction as he emerges as the leader of GE. While some critics considered Welch’s approach to be vindictive and censorious, it was highly effective in propelling GE to its highest level of success, nevertheless. Consequently,this weakens the effectiveness of Jack Welch as an example of Farrey’s argument since the improvement in the bottom line at GE clearly shows the favorable outcomes of highly competitive environments.

Katzenbach and Khan believe there are three categories of manager: a good manager, a people person and a pride-builder. A good manager is fair and rational working toward equality and efficiency. They focus on the development of individuals with potential using formal development plans. A people person is typically hands on and explains the reasoning behind their decision. This individual is easy to work with and uses their connections to create development opportunities for their favorites. A pride-builder encourages staff to be actively involved in problem solving and empowers staff to pursue ideas. They strive to get the personal best effort from every team member and are often a role-model for expected behaviors (2010).

Please read Case Study: The Jack Welch Era at General Electric in Chapter 5 and answer questions 1 & 3. Please submit the answers by the end of week #3. At least one page is required.

“Managers should manage in a way that brings good people into the organization and makes good people want to stay. Managers, especially immediate supervisors, largely determine whether employees stay with or leave a company” (Crews).

* Technical Leadership – Immelt identified technology as a key driver of GE’s future growth and emphasized the need to speed up the diffusion of new technologies within GE and turn the corporate R&D into an intellectual house.

Positive or negative, change can be challenging to manage because employees need to be on board and be obliged to make necessary changes as well as adjust his or her work habits. When implementing change, a manager may run into numerous obstacles from resistance from the staff to morale issues. This is primarily caused by a lack of understanding by the employees and a fear of how the change will affect him or her directly. Implementing change within an organization can be extremely difficult without a manager who understands d his or her role and responsibilities. This could be the deciding factor of whether or not the

This report’s objective is to provide analysis of the leadership challenge that General Electric (GE) is currently facing, and to recommend solutions. The primary problem is determining what kind of candidate is required to replace retiring CEO Jack Welch. This has left GE to question how much does the company want to change policy over the previous era, and where does the company want to be in future?

General Electric is a well-known company in many regions of the world, but what people aren’t particularly aware of are the steps that General Electric has taken to get to where it is at today. When I think of General Electric the first thing that comes to mind is the role that the company plays in the production of household appliances, but General Electric is a much bigger contributor to people’s lives than is most people realize. People aren’t familiar with the internal business decisions that General Electric makes to ensure that the company continues to grow and run as smoothly as possible, allowing the company to continue to provide people with the services that they have grown to recognize as being a trademark of General Electric.

Management guru Jack Welch, former CEO of General Electric, has been instrumental in forming today’s top business management leaders by imparting effective knowledge in leadership management; he is widely credited with transforming GE into a multibillion-dollar conglomerate.

In 2001, shortly after Jeff Immelt became the CEO of GE, a series of events changed and impacted the corporate landscape. The immediate challenges that he faced included 9/11, and a subsequent series of high profile corporate scandals (Enron, WorldCom). In 2008, the financial crisis hit and had a severe impact on GE’s primary growth source, GE Capital causing it to accumulate bad debts and asset write-downs. These events caused slow domestic economic growth, crisis of confidence among investors and more global competitors.

Jack Welch’s vision of what GE was possible of gave the company a vision for twenty years while he was the CEO and chairman. He states, “leaders make sure people not only see the vision, they live and breathe it.” (Winning, pg 67) He not only allowed for employees to stretch, but demanded it. In teaching workers to stretch Welch knew that workers “may fail. In fact, they probably will fail. But stretching, and stretching the business, is going to improve performance results.” (Jack Welch on Leadership, pg 105) He also states that “only by setting the performance bar high did it become possible to discover people’s capabilities.” Jack Welch’s emphasis on candor and breaking the bureaucracy of modern business separated him from his contemporaries. He excited others of the possibility of being the biggest and best company in the world and rewarding his best employees that shared the values of GE. According to FORTUNE Editorial Director Geoffrey Colvin In "The Ultimate Manager, Welch leads the annals of management history not for anticipating the new world's changes ahead, but for acting on them: "His great achievement is that having seen it, he faced up to the huge, painful changes it demanded, and made them faster and more emphatically than anyone else in business. He led managers into this new world, which we still inhabit, and just as important, he showed business

1. How difficult was the task facing Immelt assuming the CEO role in 2001? What imperatives where there to change? What incentives to maintain the past?